Appendix C


Tucson Electric Power Company



Section IV.D of the Report notes that Tucson Electric Power Company ("TEP") suggests that, in addition to the incentive credits recommended by the Subcommittee for early installation and content, Competitive Suppliers who invest in solar manufacturing or similar facilities in Arizona should get credit against the Solar Portfolio Standard requirements. TEP also suggests that clarifying language be adopted to remove any uncertainty as to whether credit will be given for customer-sited and customer-owned facility. TEP offers the following language for the Commission's consideration as possible amendments to the Rules designed to address these issues:


A - A Competitive Supplier will be entitled to receive a credit against the Solar Energy Requirement if the Competitive Supplier owns or otherwise makes an investment in any solar energy-related manufacturing, systems integration, or other similar business enterprise for which physical facilities are located in the state of Arizona Any such credit against the Solar Energy Requirement will be equal to the amount of nameplate capacity produced in a calendar year times 2,190 hours (based on an assumption of 25% capacity factor for solar energy generation). Any assumptions and standards related to the determination of the Solar Energy Requirement may be adjusted by the Commission from time to time to reflect changes in the cost and operation of solar technology and related market conditions.


B - Competitive Supplier will be entitled to receive an appropriate credit against the Solar Energy Requirement if and to the extent the Competitive Supplier incurs costs, including any financial incentive programs or measures, associated with the installation and ownership by customer of New Solar Resources at that customer's residence, commercial or industrial location. Prior to implementation, the Competitive Supplier will file an application with the Commission for approval of the program or measure and approval of the credit proposed to applied against the Solar Energy Requirement."

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