The interconnection and locational benefits of [Wholesale Distributed Generation] represent a large part of the ratepayer value for projects 20 MW and under. Because the locational benefits of distribution- connected energy in terms of ratepayer and ancillary impacts have been well- documented, the FIT Coalition strongly recommends that the [Reverse Auction Mechanism] program be limited to distribution-connected projects.
The FIT Coalition’s predecessors previously provided detailed evidence for the conclusion that distribution-connected energy provides up to 35% higher value to the ratepayer than transmission-connected energy. This value difference arises from several factors, including: avoided network construction costs, avoided line losses, and avoided congestion. Furthermore, ratepayers incur an additional cost of approximately 1.5 cents for every kWh that is stepped down from the transmission grid to the distribution grid. This Transmission Access Charge is applied across the board and is a clear and immediate benefit of interconnection renewable generation to the distribution grid.
CPUC Rulemaking 08-08-009 Comments filed September 27, 2010