New Partnership Reduces Barriers to Microgrid Deployment in California

Energy grid.
Published On
Jan 27, 2021

The California Public Utilities Commission (CPUC), San Francisco, is facilitating the commercialization of microgrids across the Golden State, in part to secure backup power ahead of wildfire season, particularly within vulnerable regions and populations.

The CPUC adopted microgrid rates, tariffs and rules for the state’s three major electric utilities: Pacific Gas and Electric Co., San Francisco; Southern California Edison, Rosemead, Calif.; and San Diego Gas & Electric, San Diego. While the construction and operation of microgrids were already permitted in California, the latest action by the commission is intended to reduce barriers for microgrid deployment statewide.

The CPUC also ordered the three utilities to jointly develop a statewide microgrid incentive program, giving them a $200 million budget to fund grants to local governments for the development of microgrids in vulnerable communities impacted by grid outages. The funding will also be used to test new technologies and regulatory approaches toward the development of more microgrids in these communities.

“This decision builds on our efforts to reduce barriers for the commercialization of microgrids while keeping an eye to ratepayer equity and supporting vulnerable and low-income communities,” Genevieve Shiroma, commissioner, said in a press release announcing the CPUC’s action.

“Additionally, the decision addresses resiliency to keep customers energized for the upcoming 2021 fire season, including a transition plan to clean back-up generation for 2022 and beyond,” Shiroma said. “We will continue to actively engage with stakeholders to make the grid more resilient for all.”

A number of environmental advocate organizations, including Vote Solar, Oakland, Calif.; the Climate Center, Santa Rosa, Calif.; the California Environmental Justice Alliance, Huntington Park, Calif.; and GRID Alternatives, Oakland, believe the microgrid incentive program “can help correct for historical inequities in the electric power industry, and would be an innovative new model that other states could follow,” Ed Smeloff, managing director for Vote Solar, wrote in UtilityDive.

The groups will now work with the CPUC and the utilities over the next several months to iron out the details regarding the definition of critical facilities and the development of a scoring system for prioritizing eligibility for funding, Smeloff wrote.

Next on the CPUC agenda: addressing more complex issues such as what electric rates should be for multicustomer microgrids, and which entities should set such rates—the CPUC, private parties or self-governing community associations, Smeloff said.

“Some parties to the proceeding including Google and Sunrun have suggested that current law already allows private entities to serve selected customers as long as they do not offer universal service,” Smeloff wrote. “As might be expected, the investor-owned utilities are skeptical about allowing privately-owned electric grids that are unregulated. This upcoming microgrid track promises to be interesting as it addresses some of the fundamental principles of electric utility regulation.”

About the Author

Katie Kuehner-Hebert

Katie Kuehner-Hebert has more than three decades of experience writing about the construction industry, and her articles have been featured in the Associated General Contractor’s Constructor magazine, the American Fence Association’s Fencepost, the...

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