Jim:
Here's the DG stuff from the Hertzberg letter
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Key Barriers to the Development of Distributed Generation and Proposals to 
Remove the Barriers

Barrier:  Excessive and Unnecessary Utility Stand-by Charges

Solution
The executive orders issued by the Governor on February 14th took a step in 
the right direction, but don,t go nearly far enough.  Utility stand-by 
charges have always been designed by the utilities to protect their monopoly 
position, extract monopoly prices from customers, or both.  They must be 
eliminated for all distributed generation applications.  There is no reason 
to limit the elimination of these charges to generation facilities that are 
less than 1MW.  These limits will only lengthen unnecessarily the time it 
takes for California to close the significant gap between supply and demand 
and reduce the risk of black outs this summer. 

The provisions of SB27X eliminating stand-by charges were stripped from the 
bill.  This will likely thwart any attempts to encourage the near-term 
development of distributed generation and reduce the severe supply-demand 
imbalance in California.

The language eliminating stand-by charges should be re-inserted into SB27X 
and modified to remove all caps on plant size. 
 
Barrier: Excessive delays and costs related to interconnecting facilities 
with investor-owned and municipal utilities

Solution:   
The Governor,s executive order regarding interconnection is a step in the 
right direction*D-D-26-01 requires utilities to complete interconnection 
studies within 7 days.  California should ensure that this requirement 
applies to all generation facilities, including distributed generation.  In 
addition, the financial conflicts the utilities face when interconnecting 
generation facilities are simply too powerful to overcome through executive 
orders or other regulations.  

To the greatest extent possible, California should shift control over 
interconnection away from the utility and place that control with the 
California ISO.  This could be accomplished through amendments to SB 27X.

Barrier:  Permitting and Air Quality Issues
Developers of distributed (i.e., &on-site8) generation that is 50 MWs or 
greater must receive certification from the California Energy Commission and 
therefore face all of the impediments to development that large-scale 
generation faces.  

Solution: 
California should ensure that the executive orders (D-22-01 thru D-26-01) 
issued by the Governor to expedite plant siting and maximize plant output 
apply equally to smaller scale, &distributed generation8 facilities. In 
addition, distributed generation that is less than 50 MWs continues to face 
local opposition.  The State should ensure that local, parochial interests 
cannot block otherwise beneficial distributed generation projects.  

These objectives could be accomplished through amendments to SB27X.
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