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Comments on California’s Distributed Energy Resources Policy

The California Public Utilities Commission (CPUC) is developing a comprehensive policy for integrating Distributed Energy Resource (DERs), like rooftop solar, into its energy system. A March 2018 administrative law judge ruling heavily cited our earlier comments in laying out a revised plan to require the state’s utilities to conduct a societal cost test to help compare the net benefits of different DER technologies.

We submitted comments to the CPUC commending the agency for its revisions to the proposed analysis and recommending additional improvements. We encourage the CPUC to use the Societal Cost Test to not only gather information, but to use it as the primary tool to guide investment decisions. We also encourage the CPUC to follow its revised plan and our earlier recommendations by using the Social Cost of Carbon, as developed in 2016 by the federal government, to consider the climate benefits that DERs can provide by displacing fossil fuel generation. We also encourage CPUC to use methods developed by the US Environmental Protection Agency to calculate the air quality benefits that DERs can provide, while the state develops a more robust method. These actions will allow the Commission to make investments that provide the greatest net benefits.

In our comments replying to other stakeholders’ feedback on the ruling, we counter claims that oppose the use of high-impact estimates of the Social Cost of Carbon in the CPUC’s Social Cost Test. We encourage the CPUC to further explain its decision to use the high-impact estimates in the final order. The agency should highlight its concerns about the lower-probability, higher-impact outcomes of climate change that are incorporated into the Interagency Working Group’s high-impact estimates of the Social Cost of Carbon, in addition to CPUC’s existing discussion of the damages, like wildfires, that are omitted from the Interagency Working Group’s analysis.

Read about our previous work in the proceeding.