California Regulators Move into Phase 2 of Proceeding to Commercialize Microgrids

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California regulators are set to dive into microgrid tariffs and other complex approaches to advance the technology, as they enter the second phase of their effort to commercialize microgrids.

The Public Utilities Commission (CPUC) expects to issue a staff proposal July 22 and will seek comment on the proposal from stakeholders by August 14 (Rulemaking 19-09-009).

The proceeding springs from CA SB 1399, a law that requires the CPUC to take action by December to facilitate the commercialization of microgrids.

In completing the first phase last month, the commission ordered a number of short-term modifications required of utilities, including steps to expedite applications and approvals.

Now the CPUC says in a scoping memo that it will embark on a second phase that will focus on “the complex issues and contours of SB 1339.” Some of them include developing: 

  • Microgrid service standards necessary to meet state and local permitting requirements
  • Methods to reduce barriers for microgrid deployment, without shifting costs between ratepayers
  • Guidelines to determine what impact studies are necessary for microgrids to connect to the grid
  • Rates and tariffs that are just and reasonable to support microgrids, and do not compensate customers for use of diesel backup or natural gas generation, except under specific conditions

The California regulators also intend to look at streamlining the interconnection process for direct current microgrids.

Either in this phase or an upcoming third phase, the commission plans to take up additional issues, among them determining if islanding capability should be required of large net metered projects that are paired with energy storage.

California has been a state leader in advancing microgrids. Over the last decade the state invested more than $136 million in microgrid research, and attracted $101 million in matching funds. 

California regulators

The 10th Avenue Marine Terminal of the Port of San Diego is among the winners of the CEC’s microgrid grants. Photo by Sherry V Smith/

The money was applied to 45 microgrids, said Mike Gravely, research program manager at the California Energy Commision, during a July 7 microgrid workshop.

Gravely said another four to five microgrids will be announced over the summer.

“It’s a very popular research topic, addressing a lot of energy challenges,” he said.

He added that the state wants to bring microgrids to a point where they become a “commercial product that people can literally buy and choose as they need and at a price range that’s affordable.”

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About Elisa Wood

Elisa Wood is the chief editor of She has been writing about energy for more than three 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.


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    • There are a growing number of CCAs being introduced across areas of IOU utility PG&E in Northern California in particular, since the wildfires and PSPS. Some have contracted with solar PV (EPC) company 8Mile Solar to create a microgrid for their local needs and resiliency. In the typical small town scenario, one could see a solar PV aggregate solar PV on community building roofs or a solar PV farm at the edge of town with 35% solar PV storage and a back up natural gas generation system for resiliency. Something PG&E has neglected to do for a couple of decades. Being able to “isolate” from PG&E during a PSPS event will make the local grid more robust during emergency situations.