California Judge Recommends Next Steps for Microgrid Tariffs

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California took a significant step in its quest for microgrid tariffs yesterday with the release of a draft decision by Administrative Law Judge Colin Rizzo.

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The judge’s recommendations represent the latest step in Track 2 of the California Public Utilities Commission’s move to commercialize microgrids, as laid out by state lawmakers in Senate Bill 1339.

With concern running high about electric reliability in the state, the proceeding (19-09-009) has drawn hundreds of comments and filings by microgrid companies, utilities, environmental groups, large energy users, and other interested parties since it was initiated in September 2019. California has struggled with multiple power outages related to utility shut-offs due to wildfire threats, as well as an unrelated grid blackout.

The 122-page draft lays out microgrid rates, tariffs, and rules for large investor owned utilities. The commission’s intent is to consolidate into a single tariff the various payment methods — such as net metering — that microgrids may employ. The microgrid tariff also acts as a “regulatory identity for microgrids” as the state creates policy, according to the draft.

In addition to requiring that utilities formulate microgrid tariffs, the proceeding takes on the ‘over-the-fence’ rule that prohibits microgrids from serving adjacent buildings separated by a street. The issue obstructs development of microgrids that serve multiple buildings that are not within the same property boundary.

The judge recommends doing away with the restriction for microgrids that serve critical facilities controlled by municipalities. The microgrid may be owned by a public or private party under the recommendation. Initially only 10 microgrids within a utility service territory would be able to exercise the right so that the utilities can test the approach.

The draft decision also makes several other recommendations, among them the creation by utilities of microgrid incentive programs. It also calls for pathways to evaluate and approve of low-cost, reliable electrical isolation methods. In addition, the judge recommends formation of a Resiliency and Microgrids Working Group work on microgrid policy issues.

The commission’s next meeting is January 14, which would be the earliest it may vote on the proposed decision.

The document is available on the commission website.

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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. “Initially only 10 microgrids within a utility service territory would be able to exercise the right so that the utilities can test the approach.”

    It sounds like the ruling it behind what is actually happening in the market right now. I have come across articles here and other renewables magazines, that California is moving towards constructing micro-grids in areas that have created their own CCAs. A lot of this is being done in the PG&E sphere of influence where the PSPS is also affecting commerce in a negative way. CCA communities are looking at ways to “island” their area during such events as PSPS and or power outages. Entities like 8 minute Solar has been contacted by and also contracted by CCAs to put a solar PV farm and energy storage at the edge of a community.

    “The 122-page draft lays out microgrid rates, tariffs, and rules for large investor owned utilities. The commission’s intent is to consolidate into a single tariff the various payment methods — such as net metering — that microgrids may employ. The microgrid tariff also acts as a “regulatory identity for microgrids” as the state creates policy, according to the draft.”

    Depends on how this is implemented. IOU utilities will find ways to make any ruling, regulation or tariff work in their favor, instead of work to harden the grid system. This might push more energy storage systems in the 2 to 4 hour use range. Grid constrictions in some areas require more capacity during events to keep the lights on to the ratepayers. California needs to get away from 4 hour energy storage solution and get into the mind set of 8 to 12 hours of energy storage, flexible generation that allows “throttling” generation output allowing longer discharge periods from the energy storage system. Design for a maximum, use smart algorithms to run generation at min/max.