25 Stakeholders Press California to Move Ahead with Microgrid Tariffs

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Twenty-five parties today urged California regulators to finalize microgrid tariffs by January, underscoring the need to incentivize the technology in a state now characterized by wildfires, blackouts and safety power shutoffs.

microgrid tariffs

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In a filing submitted by the Microgrid Resources Coalition (MRC), the stakeholders asked the public utilities commission to finalize and implement a microgrid tariff for single-customer microgrids by January and develop a tariff for multi-customer microgrids in the first half of 2021. (Rulemaking 19-09-009)

Microgrid advocates are pushing for tariffs that compensate microgrids for the range of services they provide, including resilience, resource adequacy, generation, storage, and load management.

“…prepare for a decade or more of disruptions of equal or even greater severity.”

The group filing sprang from a meeting September 9 with commission staff that was organized by two consultants working with the stakeholders, Allie Detrio and Lorenzo Kristov. In a letter also filed today with the commission, they described the urgent need “to proliferate microgrids and other local energy resources across California.”

“The dramatic unanticipated events of 2020 — an ongoing global pandemic, followed by dry lightning storms igniting the largest wildfires in California history, all coming on the heels of widespread PSPS [public safety power shutoffs] and the devastating wildfires of 2017-19 — require the commission and other California policy makers to prepare for a decade or more of disruptions of equal or even greater severity,” said the letter.

What to include in microgrid tariffs

The letter describes microgrid tariffs as a way to define the new relationship created between utilities and those that develop and use microgrids. It specifies roles so that each can be a “good citizen” of the utility distribution system and compete on a level playing field under non-discriminatory rules.

Several parties to the MRC filing added quotes with their variations on what should be inclued in the microgrid tariffs. 

  • Grid Alternatives, a non-profit that provides solar for underserved communities, recommended a sub-tariff for disadvantaged and low-income communities.
  • Enel X North America, a technology provider, pushed for a standardized tariff for microgrid interconnection, dispatch and compensation.
  • The Local Government Sustainable Energy Coalition advised that the commission avoid tariff provisions that will discourage local governments from installing clean microgrids.
  • 350 Bay Area, a climate advocacy group, warned that the cooperation between utilities and local communities is needed for a tariff to work.
  • California Alliance for Community Energy said that the tariff structure should create fair value for resilience and clarify participant roles, especially that of the utilities.
  • Green Hydrogen Coalition, a non-profit, described green hydrogen as a game changer to combat climate change and said a tariff would support its scale up in microgrids.

The push for microgrid tariffs comes as the commission works on finding ways to comply with a state law (SB 1339) to support commercialization of microgrids. The proceeding is now in its second phase. The first track finished up in June with the commission enacting a number of short-term modifications required of utilities, including steps to expedite microgrid applications and approvals.

The second track is focusing on more complex topics, including  rates and tariffs to support microgrids. The commission also floated a proposal in July that would have utilities building as many as 15 pilot microgrids.

The bygone era of utility pilots?

The proceeding has drawn input from a range of players, including large businesses in the state, such as Google, which plans to build microgrids.

Google is among stakeholders that has separately urged the commission to move more quickly and focus less on utility pilot projects, which they say are unnecessary because microgrid technology already has proven itself in the marketplace.

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In a letter last month to the commission, California State Sen. Henry Stern, sponsor of SB 1339, also expressed need to pick up the pace on microgrids. He was particularly critical of the state’s current reliance on diesel generators to ward off power outages after utilities abandoned plans to build clean energy microgrids this year because of the cost and tight time frame.

“It appears the commission may be focusing too much energy providing direction to electrical corporations to utilize temporary diesel back-up generators and creating large scale microgrid pilot programs with limitations, instead of prioritizing the wider deployment of microgrids with new rates and tariffs,” he said.

Stern also called for the commission to consider waiving certain nonbypassable charges and standby fees for microgrids. Microgrid advocates say the fees are outdated and create an unnecessary regulatory burden on microgrids. 

Who’s in?

The 25 stakeholders that signed on to today’s filing were: Microgrid Resources Coalition, The Climate Center, Peninsula Clean Energy, Marin Clean Energy, Sonoma Clean Power, East Bay Community Energy, 350 Bay Area, Local Government Sustainable Energy Coalition, GRID Alternatives, California Efficiency & Demand Management Council, Bioenergy Association of California, California Energy Storage Alliance, California Solar & Storage Association, National Fuel Cell Research Center, Solar Energy Industries Association, Clean Coalition, Green Hydrogen Coalition, ENGIE, Enel North America.

Interested organizations that are not parties to the proceeding include: California Alliance for Community Energy, Resilience Plus, Indivisible Green Team California, Reimagine Power, Lorenzo Kristov, Chuck Roselle.

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Elisa Wood About Elisa Wood

Elisa Wood is the chief editor of MicrogridKnowledge.com. She has been writing about energy for more than two decades for top industry publications. Her work also has been picked up by CNN, the New York Times, Reuters, the Wall Street Journal Online and the Washington Post.

Comments

  1. “In a filing submitted by the Microgrid Resources Coalition (MRC), the stakeholders asked the public utilities commission to finalize and implement a microgrid tariff for single-customer microgrids by January and develop a tariff for multi-customer microgrids in the first half of 2021. (Rulemaking 19-09-009)”

    Could this “multi-customer microgrids” concept have residential solar PV and ESS as an aggregate community micro-grid that can also supply on demand energy storage or ‘generation’ with the proper utility signals?

    “Google is among stakeholders that has separately urged the commission to move more quickly and focus less on utility pilot projects, which they say are unnecessary because microgrid technology already has proven itself in the marketplace.”

    Now the “regulated monopoly” electric utilities will have to (deal) with energy hungry Corporate America. These same utilities have had ample opportunity over the last 10 years to form up, analyze their grid for the proper placement of energy storage facilities along the grid. Now Corporate America will move without them, leaving the utilities at a disadvantage of being an unwilling ‘customer’ of someone else’s micro-grid, operated in their best interests and not the utility’s best interest.

    • Dylan Miley says:

      Basically any type of energy production device (known as a distributed energy resource, DER) can be integrated into a microgrid. But what makes a microgrid a microgrid is its ability to process all of the DERs you attach to it and then connect to your desired loads

  2. Don Sleeter says:

    You forgot to define what a “Microgrid tariff” is. The term tariff is confusing to me in the usage you have here. I am guessing that it has to do with “importing” power, but I have no idea what you mean, as you didn’t actually explain it.

  3. What and where is the power for energy on the micro-grid? I hope it is solar, wind or geothermal….. See my work and publications on this topic, especially my first book (done when as an Energy Advisor to Calif Governor Davis) titled Agile Energy Systems that I co-authored when before the “recall”. The book was published in mid-January by Elsevier Press. Then over a decade later, I updated the book (2nd Ed) for Elsevier Press. The idea for “agile energy” is both power grid and on-site power. —- all (100 percent) of which need green systems such as solar, wind, run-of-river and geothermal. There is much more including public policies and financing etc. . Feel free to contact me via email.
    Woody

    • Dylan Miley says:

      It depends upon the individual grid. The most common distributed energy resources (DERs) that supply microgrids with power are PV, micro wind turbines, and diesel generators as a backup. Microgrids are also often equipped with Li ion batteries to add additional stability. Other DERs and storage devices that are used, but are less common, are; flywheels, hydrogen fuel cells, hydrolysis, miscellaneous fuel cells, micro hydro.

  4. Dr. Les Guliasi says:

    As important as it is to finalize microgrid tariffs, the CPUC also needs to focus on curtailing temporary and mobile diesel generation. The CPUC’s Track 1 decision stated emphatically that PG&E’s reservation of 450MW of diesel generation was for 2020 only. Now is the time for the commission to take practical steps, following the August 25th Alternatives to Diesel workshop, to authorize the utilities, and PG&E in particular, to contract for commercially viable, proven technologies to replace the hundreds of diesel units located in communities throughout Northern California, where feasible. Time is of the essence if there is to be any reduction in diesel generation during the 2021 fire season. The commission needs to act now to avoid a repetition of 2020 or communities will suffer the same fate with the same result of diesel generation and its attendant costly and harmful health effects.

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