SELF-GENERATION INCENTIVE PROGRAM (SGIP)

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					  SELF-GENERATION
 INCENTIVE PROGRAM
        (SGIP)

Website:   www.socalgas.com/business/selfgen
Email:     selfgeneration@socalgas.com

           January 2005
    Summary
   The intention of this presentation is to
    provide viewers a general understanding
    of the program,
   For more specific information, viewers
    should visit the website and download
    the SGIP Handbook.
    Overview
   SGIP is a statewide program, initiated by
    Assembly Bill 970 and modified in 2004 by
    AB1685.
   Provides incentive funding for distributed
    generation technologies, including:
       Micro-turbines
       Photovoltaic (solar power)
       IC engine generators
       Fuel cells
       Wind turbines
    Overview
   SGIP was originally a four year program
    (2001 - 2004), then was extended thru
    2007.
   Incentives reserved up to 12 months
   Reservations granted first come, first
    served
   No Double-Dipping:
       Single projects are not allowed to receive
        incentives from more than one source: SCE,
        SoCalGas, PG&E, SDREO or CEC.
    Overview
   Four administrators:
       SoCalGas
       Southern California Edison (SCE)
       Pacific Gas & Electric (PG&E)
       San Diego Regional Energy Office (SDREO)
    Who is Eligible?
   Customers of SoCalGas, SCE, PG&E,
    SDG&E (IOUs)
   ESCO’s, with clients (at host sites
    above)
   Customers served by both municipal
    utility and IOU:
       LADWP & SoCalGas
       IID and SoCalGas
    Incentives
   Incentives are based technology &
    Incentive Level:
       Level 1, Level 2, Level 3R, Level 3N
       Levels defined on following pages
       Each Level has its own funding limits
   Incentives are based on:
       $/kw basis
       Incentive funding from other sources may
        reduce the SGIP incentive (see Handbook
        for further details)
Incentives – Level 1

                                   Incentive     Minimum                        Maximum
Incentive     Eligible             Offered       System  Maximum                Incented System
Levels        Technologies         ($/Watt)      Size    System Size            Size1

                Renewable fuel
  Level 1                            $4.50/W       30 kW           5 MW               1 MW
                    cells



  Level 1        Photovoltaics       $3.50/W       30 kW           5 MW               1 MW




  Level 1        Wind Turbines       $1.50/W       30 kW           5 MW               1 MW


 Up to 25% of fuel may by be Non-Renewable (fossil fuel). Data measured, collected & reported to
   CPUC every 6 months.
Incentives – Level 2

                                     Incentive    Minimum                     Maximum
Incentive      Eligible              Offered      System  Maximum             Incented System
Levels         Technologies          ($/Watt)     Size    System Size         Size

                 Non-Renewable
  Level 2                             $2.50/W        None            5 MW          1 MW
                   fuel cells

1. These technologies must install waste heat recovery.
2. These technologies must meet a set of reliability criteria requirements.
   Incentives – Level 3-R
   (Renewable Fuel)

                                   Incentive     Minimum                        Maximum
Incentive     Eligible             Offered       System  Maximum                Incented System
Levels        Technologies         ($/Watt)      Size    System Size            Size

                Renewable fuel
 Level 3-R                           $1.30/W       None            5 MW               1 MW
                micro-turbines


               Renewable fuel IC
 Level 3-R     engines and Large     $1.00/W       None            5 MW               1 MW
                  gas turbines

1. Up to 25% of fuel may by be Non-Renewable (fossil fuel). Data measured, collected & reported to
   CPUC every 6 months.
      Incentives – Level 3-N
      (Non-Renewable Fuel)

                                   Incentive    Minimum                          Maximum
Incentive    Eligible              Offered      System  Maximum                  Incented System
Levels       Technologies          ($/Watt)     Size    System Size              Size

              Non-renewable &
 Level 3-N     waste gas fuel       $0.80/W        None            5 MW                1 MW
               micro-turbines

              Non-renewable &
 Level 3-N    waste gas fuel IC     $0.60/W        None            5 MW                1MW
              engines and Large
                 gas turbines
1.   These technologies must install waste heat recovery and meet emission criteria.
2.   These technologies must meet a set of reliability criteria requirements.
    Project Eligibility
   Eligible
       Equipment/site connected to the grid
       Offset a portion, if not all, of site’s electric
        load
       Must serve on-site electric load
   Not Eligible
       Wheeling electricity
       Sites with interruptible electric service
       Over the fence applications
    Equipment Eligibility
   Eligible                     Not Eligible
       Equipment must be            Demonstration units
        new and permanent            Backup generation
                                      equipment
       Projects < 5,000 kW
                                     Equipment intended
       Customer’s side of            to wheel power
        the utility meter
                                     Diesel fired
                                      equipment
                                     Thermal load
                                      equipment
                                          Absorption chillers
                                          Thermal storage
                                          Batteries
    Other Incentive Funding
   Funding from only 1 SGIP Administrator
    per project allowed
   Combined incentive cannot exceed out-of-pocket
    expenses
   Funding is allowed from other programs, however
    the SGIP incentive shall be reduced
   When other incentives are involved, the SGIP
    incentive will be reduced by the following
    percentage:
                      Level 1     50%
                      Level 2     60%
                      Level 3-R   60%
                      Level 3-N 70%
    Incentive Example
   Assumptions:
     Level-1, 80 kW, PV
     Other funding - $80,000 (80 kW/ $80,000 = $1.00/W)


   Incentive by kW:
     Other funding = $1.00/W
     Reduction of SGIP Incentive = 50% of $1. 00 = $0.50

     Incentive - $3.00/W (SGIP - $3.50 less $0.50) +

      $1.00 (other) = $4.00/W
    The Funding Process

   Steps by Applicant / Host

   Steps By SoCalGas (Administrator)
    Step 1 - Applicant
   Submitting an Application
          Complete Reservation Request Form with original
           signatures
          System description
          SoCalGas bill
          Electric utility bill w/ peak kW
          Estimated installed cost
          Sizing calculations
          Spec Sheets
          If applicable –
               Waste heat calculations
               Reliability criteria
               Renewable Fuel Report
               Waste gas Report
    Step 2a - SoCalGas
   SoCalGas reviews application package
    for:
       Completeness
       No Double-dipping
       Customer status
       Sizing
       Overall eligibility
    Step 2b - SoCalGas
   Completed applications receive
    Conditional Reservation Letter to
    Applicant stating:
       Reservation #
       Funding amount
       60-Day Project Advancement Date
       Project Completion Date
       Project size & technology
       Project location
    Step 2c – SoCalGas

   Incomplete applications:
       Request additional / missing documentation


   Applications not meeting eligibility
    requirements receive letter denying
    access to the program
    Step 3 - Applicant
   60-Day Project Advancement                        submittals:
         Proof of:
              Air quality permit application
              Utility interconnect application
              P.O. or contract for major equipment
         Project Cost Breakdown
         Standard SGIP Contract with original signatures
         Certificates of insurance – (Host & Applicant)
         Renewable Fuel Affidavit (if applicable)
         Waste Gas Affidavit (if applicable)
    Step 4 - SoCalGas
   Review of 60-Day Project Advancement
    documents
   Incomplete: documents will be requested
    by Administrator
   Complete: Administrator mails letter
    confirming reservation
    Step 5 - Applicant
   App./Host submits Claim Form with:
         AQ permit to operate (if applicable)
         Letter from utility authorizing host to parallel
         Final building inspection report
         Final Project Cost Breakdown & Affidavit
         Proof of Payment
         Proof of Warranty
         AQ District Determination of net benefit (3-W)
         Substantiation of Load (future load projects)
         Planned Maintenance Letter (L-3 > 200kW)
Step 6 - SoCalGas
   SoCalGas reviews Claim Form package for
    completeness
   Incomplete: documents will be requested by
    Administrator
   Complete: schedule a site inspection for
    verification
   Check is sent to Applicant/Host after site
    verification and Claim Package has been
    certified
    More Information?
   Go to:
    www.socalgas.com/business/selfgen/
       Program Handbook
       Forms
       Instructions
       Spreadsheets
           Project Cost Breakdown
           Waste heat analysis
   E-mail: selfgeneration@socalgas.com
    Questions?
   Questions can be emailed to:
     selfgeneration@socalgas.com