California Offers New Proposal to Break Down Barriers to Microgrids

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Staff at the California Public Utilities Commission released a proposal last week that calls for a new microgrid pilot program, a special tariff for microgrids, and other measures to overcome barriers to microgrid development.

microgrids

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The proposal comes in the second phase of a commission proceeding to help commercialize microgrids. The first phase culminated in June when the commission ordered a number of short-term modifications required of utilities, including steps to expedite applications and approvals.

For the second phase, staff took on more complex issues affecting microgrids, and proposed five changes for the commission to consider:

1) Direct utilities to allow construction of microgrids at special facilities

2) Allow microgrids to serve critical customers at adjacent parcels

3) Require utilities to create a microgrid tariff

4) Direct utilities to develop a community microgrid pilot program

5) Direct utilities to study low cost reliable electrical isolation technologies

$15 million for each microgrid

The pilot program would focus on 15 community microgrids built within the service territories of Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.

Ratepayers from the three utilities would fund the microgrids, which would be designed to serve vulnerable populations, particularly low-income areas likely to face power outages. The proposal caps funding for each community microgrid at $15 million.

Critics of ratepayer funded microgrids say they create disparity because all utility customers pay, but only a limited number benefit. The proposal attempts to avoid this problem by charging only those ratepayers within the county where the community microgrid will be built.

Staff rejected the idea of seeking competitive bids for the pilot projects and instead put the utilities in charge, arguing that the utilities can “rapidly implement the program whereas a competitive solicitation for a third-party administrator will increase the program lead time.”

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Each microgrid would be able to island critical functions for at least 96 hours, and would need to be built by Jan. 31, 2022.

Microgrid development without the hassle

Staff also took on other controversial issues, among them legal restrictions that stop microgrid owners from serving buildings on adjacent property. They proposed that municipalities be exempt from the prohibition, but limited the exemption to 10 microgrids across the three utility service territories. Staff reasoned that the 10 microgrids will create opportunity for the state to study the exemption and make modifications if necessary.

In calling for a microgrid tariff, the proposal noted that microgrids in California face barriers caused by rate complexity. “For example, there are net energy metering options for systems that involve solar generation alone, solar and storage together, fuel cells alone, or in combination with those technologies,” the proposal said.

Staff also said that some microgrids also face financial barriers, such as high upfront capital investment and payment to utilities for departing load and standby charges.

The proposal called for utilities to develop a single rate schedule for microgrids and outlined various options for doing so.

Mark the date: August 14

To be move forward, the staff proposal requires approval from the commission, which seeks stakeholder input by August 14. The full proposal is available on the commission website: Rulemaking 19-09-009.

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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. Christine Bevilacqua says:

    Hello,
    Great summary Elisa! I work on the CPUC Microgrid Proceeding as part of my job as researcher for an energy policy attorney. One little word in your article caught my eye…as I was just looking at this proposal yesterday. Proposal 1 of the Energy Division staff proposal document states “…Allow IOUs to Install Microgrids as a special acility.”
    In your article you state “install microgrids AT a special facility” Which would also make sense if the definition of a Special Facility is health care, police fire, etc. However that is not the case. From page 5 of the Proposal: “In each large investor owned utility’s (IOU) version of electric Rule 2, there is a section that describes added/special facilities. These are defined by the IOUs as equipment that is in addition to or a substitute for standard equipment required to interconnect to the IOU’s system. This definition includes standard equipment such as transformers and poles but can also include assets that reside on the customer side of the point of interconnection (Southern California Edison (SCE) Rule 2, Section H specifies load control devices and meters).”

    Thanks for your great work. I really enjoy your articles!

  2. Scott M says:

    I’m not aware of any hindrance for utility customers to place separate customer owned conductors to adjacent parcels with breaker interlocks. When we’d clear the substation to the local prison, they would align their generator and yard loop to serve outlying loads on their own conductor. So, do you mean using the utility’s conductor “… to serve critical customers at adjacent parcels” ? That is so naive to the safety aspects to line crews, overvoltage flashovers and possible undervoltage customer equipment damage. You would need to spend a minimum of at least 6 months in a utilities electric control center and system operator training program to grasp the consequences. A control center would have to temporarily release operation jurisdiction of the utilities line to that Microgrid operations center that would have to prove the ability to track system alignment and their operator’s training. Do you know why utilities allow temporary generators to parallel to the system before islanding? Because if the third party generator makes a bad parallel they subject their switchgear to damage, but not the utilities equipment. So, when it’s time to put the island back on the grid the utility requires a “drop and pickup” because they don’t want to blow up their utility owned breaker on a bad parallel. If they damage that parallel breaker it’s two days to get a mobile breaker on a flatbed hooked up and released. Then it takes months of planning and $100k+ to replace the blown up breaker or a breaker that did the “Watusi” on it’s foundation.

  3. “Staff rejected the idea of seeking competitive bids for the pilot projects and instead put the utilities in charge, arguing that the utilities can “rapidly implement the program whereas a competitive solicitation for a third-party administrator will increase the program lead time.”

    From past experiences with utility PG&E, would you ,”really” want PG&E to be in charge of designing and installing a micro-grid? PG&E is in trouble (because) of their dilatory O&M practices over decades. IF an entity is having problems maintaining outdoor infrastructure like poles, towers and wiring, can you realistically expect them to get a micro-grid up and running?

    • Scott M says:

      Designing is Engineering. Installing is Construction. So, what does O&M practices have to do with PG&E’s Engineering and Construction (which can be done internally or done by contractors)? I’ve participated in scoring construction projects on whether they will be E, EP or EPC\Engineering Procurement Construction. It is a time consuming process to dissect who will do what and which bids to award. During emergent trouble, PG&E has put multiple small substation on a microgrid in 3 days using Aggreko diesel generators out of Benicia. Let’s see any outside contractor do that with a ground grid study (fault duties and proper relay operation), EPA testing, acceptance testing and restoring customers

  4. Scott M: What does O&M have to DO with (it). Well let’s see ignoring old infrastructure and continually keeping the money to dole out in dividends for decades, allowing this infrastructure to get so bad a wildfire caused by such dilatory practices kills 84 people. MY point is PG&E apparently didn’t do any of your proposed actions.

    Engineering IS engineering. Use the principles of sciences like physics, mechanical engineering, electronics and controls to (design) a system. Assemble, test, remediate problems, review results, correct problems. What PG&E has done for about 40 years is manana, manana, manana, until someone gets killed.

  5. Scott M: “During emergent trouble, PG&E has put multiple small substation on a microgrid in 3 days using Aggreko diesel generators out of Benicia. Let’s see any outside contractor do that with a ground grid study (fault duties and proper relay operation), EPA testing, acceptance testing and restoring customers.”

    PG&E shouldn’t pat themselves on the back for their “choice” of low hanging options to backup. so, how long can these “diesel” powered generation installations run continuously? Do you understand by CalEPA and CARB diesel powered generators are allowed about 100 hours a year operation without filing papers “describing” the need for more than 100 hours of operation? IF there is a 1 week PSPS invoked, is there enough service vehicles available to keep these 3 day installation wonders in fuel? You brag about field installation times, still this is not a long term nor is it a solution to PG&Es past failures at a more robust grid.

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