Exhibit No. SDG-4 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION San Diego Gas & Electric Company ) Docket No. ER14-____-000 PREPARED DIRECT TESTIMONY OF HILLARY HEBERT ON BEHALF OF SAN DIEGO GAS & ELECTRIC COMPANY EXHIBIT No. SDG-4 March 7, 2014 #270937 Exhibit No. SDG-4 1 PREPARED DIRECT TESTIMONY OF 2 HILLARY HEBERT 3 ON BEHALF OF SDG&E 4 5 Q1. Please state your name, title and business address for the record. 6 A1. My name is Hillary Hebert and I am the Programs and Partnerships Manager for San 7 Diego Gas & Electric Company’s (“SDG&E”) Origination and Portfolio Design group in 8 its Electric and Fuels Procurement department. My business address is 8315 Century 9 Park Court, CP21D, San Diego, California, 92123. 10 Q2. Briefly describe your responsibilities at SDG&E. 11 A2. I am responsible for designing solicitations for utility scale renewable projects and for 12 managing renewable solicitations such as the Renewable Auction Mechanism and the 13 Feed-in-Tariff (“FiT”). I also monitor regulatory issues impacting procurement and work 14 with the California Public Utilities Commission (“CPUC”) to provide feedback on such 15 issues from the utility’s perspective. I also manage regulatory aspects of SDG&E’s 16 investments in renewable projects. 17 Q3. Please summarize your educational and professional background. 18 A3. I have a B.A. in Urban Studies from the University of Minnesota and a J.D. from the 19 University of Denver. Prior to joining SDG&E, I was an attorney with Holland & Hart, 20 LLP where I represented wind developers in PPA negotiations and project financings. 21 I have extensive experience negotiating power purchase agreements and tax 22 equity investments in renewable projects. Since joining SDG&E in 2006, I have focused 23 more on regulatory aspects of renewable procurement. 1 Exhibit No. SDG-4 1 Q4. 2 Have you previously submitted testimony at the Federal Energy Regulatory Commission (“FERC” or “Commission”)? 3 A4. No. 4 Q5. What is the purpose of your testimony in this proceeding? 5 A5. The purpose of my testimony is to provide a brief overview of the various procurement 6 7 programs at SDG&E that could result in distribution level interconnection applications. Q6. 8 9 Please describe the various procurement programs SDG&E is required to comply with that involve distribution level interconnections. A6. The CPUC has developed multiple programs to encourage the development of small 10 scale, distribution level projects. The first of these types of programs is the FiT for 11 renewable generation. When the CPUC initially established the FiT in 2006, the program 12 required electrical corporations to make a standard contract available to public water and 13 wastewater customers with renewable generators sized at 1.5 MW or less on a first-come, 14 first-served basis. The initial program called for a statewide procurement target of 250 15 MW, of which SDG&E was required to procure its proportionate share based on load. In 16 2008, the CPUC expanded the program to include all customers and increased the 17 statewide program capacity limit to 500 MW. In the most recent expansion of the 18 program which began with a CPUC decision on May 24, 2012, and culminated with a 19 formal launch on October 1, 2013, the CPUC increased the maximum project size limit 20 from 1.5 to 3 MW and increased the statewide cap to 750 MW. SDG&E’s share of this 21 current cap is 48.8 MW. With the passage of California Senate Bill (“SB”) 1122 on 22 September 27, 2012, this program will again expand, to include an additional state-wide 23 goal of 250 MW of bio-energy. The CPUC is currently working with parties to develop 2 Exhibit No. SDG-4 1 this bio-energy FiT expansion. In the May 24, 2012 decision expanding the FiT, the 2 CPUC directed that projects eligible for SDG&E’s FiT may interconnect under the 3 existing Rule 21 or Wholesale Distribution Open Access Tariff (“WDAT”) until a revised 4 Rule 21 process is adopted by the CPUC. The CPUC adopted a revised Rule 21 process 5 in Decision (“D.”) 12-09-018 on September 13, 2012, yet continued to recognize that FiT 6 projects can interconnect either under the respective utility’s WDAT or under Rule 21 7 going forward until the CPUC determines otherwise. This position was confirmed in the 8 second FiT decision, D.13-05-034, on May 23, 2013. Although there are currently no 9 plans to further increase the statewide procurement cap, the CPUC is not precluded from 10 11 considering such an increase in the future. The second CPUC program that encourages the development of small scale, 12 distribution level resources is the Renewable Auction Mechanism (“RAM”). The RAM 13 is a procurement process adopted by the CPUC for the procurement of renewable projects 14 sized between 3 and 20 MW. The CPUC created the RAM program to lower transaction 15 costs by using non-modifiable power purchase agreements, and to encourage the 16 development of small-scale renewable resources that can come online quickly using 17 existing transmission and distribution infrastructure, thus contributing to RPS goals in the 18 near term. The total capacity to be procured statewide under the RAM is 1,299 MW. 19 SDG&E’s share of this current cap is 155 MW. RAM was initially set up as a two year 20 program with auctions held approximately every six months. The CPUC extended the 21 program on May 19, 2013 through Resolution E-4582 by allowing for a fifth RAM 22 solicitation to close by no later than June 27, 2014. 3 Exhibit No. SDG-4 1 Finally, as part of the Combined Heat and Power (“CHP”) Settlement, (approved 2 in D.10-12-035) a new CHP Program was developed for California investor owned 3 utilities (“IOUs”) setting a target of 3,000 MW1 to maintain the Greenhouse Gas 4 (“GHG”) benefits of the existing CHP fleet in California. All or a portion of this 5 generation will be subject to a competitive solicitation process that can result in 6 generation interconnected to SDG&E’s distribution system that is contracted with any of 7 the three IOUs with deliveries throughout the California Independent System Operator 8 (“CAISO”) Controlled Grid. In this circumstance, these generators would utilize 9 SDG&E’s WDAT Generator Interconnection Procedures and Small Generator 10 Interconnection Agreement. 11 Q8. Does this conclude your prepared direct testimony? 12 A8. Yes. 1 D.10-12-035 approved the CHP Program Settlement Agreement and on p. 27 of this Settlement Agreement, the overall MW goal is listed as 3,000MW. 4