SELF-GENERATION INCENTIVE PROGRAM

(SGIP)

Website: www.socalgas.com/business/selfgenEmail: 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 Levels

Eligible Technologies

Incentive Offered ($/Watt)

Minimum System Size

Maximum System Size

Maximum Incented System Size1

Level 1 Renewable fuel

cells $4.50/W 30 kW 5 MW 1 MW

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 f uel). Data measured, collected & reported to CPUC every 6 months.

1 Maximum system size is 5 MW, however, output capacity above the first 1 MW is not eligible for incentives.

Reference CPUC Decision 04-12-045 dated December 16, 2004.

Incentives – Level 2

Incentive Levels

Eligible Technologies

Incentive Offered ($/Watt)

Minimum System Size

Maximum System Size

Maximum Incented System Size

Level 2 Non-Renewable

fuel cells $2.50/W None 5 MW 1 MW

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 Levels

Eligible Technologies

Incentive Offered ($/Watt)

Minimum System Size

Maximum System Size

Maximum Incented System Size

Level 3-R Renewable fuel micro-turbines

$1.30/W None 5 MW 1 MW

Level 3-R Renewable fuel IC engines and Large

gas turbines $1.00/W None 5 MW 1 MW

1. Up to 25% of fuel may by be Non-Renewable (fossil f uel). Data measured, collected & reported to CPUC every 6 months.

Incentives – Level 3-N (Non-Renewable Fuel)

Incentive Levels

Eligible Technologies

Incentive Offered ($/Watt)

Minimum System Size

Maximum System Size

Maximum Incented System Size

Level 3-N Non-renewable &

waste gas fuel micro-turbines

$0.80/W None 5 MW 1 MW

Level 3-N

Non-renewable & waste gas fuel IC engines and Large

gas turbines

$0.60/W None 5 MW 1MW

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

Equipment must be new and permanent

Projects < 5,000 kW Customer’s side of

the utility meter

Not Eligible Demonstration units Backup generation

equipment Equipment intended

to wheel power 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