In 9 California Outage-Prone Communities, 9 Clean Microgrids Planned Under PG&E Program

The projects include clean energy resources such as solar, battery energy storage, pumped hydroelectric storage, small hydroelectric and biomass. They range in size from hundreds of kW to 20 MW, said Donnell. Four of the awardees are tribes, three are local government entities and two are community-based organizations, he said.

Clean Coalition, a nonprofit focused on the clean energy transition, submitted five projects to the MIP program in PG&E and Southern California Edison (SCE) territory, and one of the projects –The Tomales West Community Microgrid in Marin County–has been chosen to receive funding from PG&E under this first round of grants, said Craig Lewis, founder and executive director, Clean Coalition.

Lewis expects another microgrid project, the East Los Angeles Community Microgrid, to be funded by SCE under the MIP program.

Clean Coalition’s first project north of San Francisco

The Tomales West Microgrid would be located in a Tier 2 fire zone and would include a fire station, church, a wastewater treatment facility and the Shoreline Unified School District north of San Francisco. At the school district, 297 kW of solar would be deployed, along with 1,306 kWh of battery energy storage generation. Potentially 534 kWh of solar could be deployed across the school district, although only 300 kWh would be needed to meet MIP requirements. The microgrid would include two sheltering stations.

Some projects may attract funding in addition to grants provided by PG&E, Donnell noted.

“Our goal in designing the program was to allow third parties to figure out how best to piece together their business model and have MIP dollars act as a plug for any hole they may have that would stand in the way,” he said.

Second round of MIP funding open to applications

PG&E is now accepting applications for the second round of MIP funding. The state’s two other investor-owned utilities are in the midst of evaluating projects under the first round of the program.

In submitting their proposals, microgrid developers assumed that incentives available under the Inflation Reduction Act would be available, Donnell said. It’s unclear whether the Trump administration will roll back that funding. Changes to the IRA incentives would introduce risk to some of the projects, he added.

PG&E used a scoring system that assigned points for community benefits, clean technologies and other issues. Extra points were given if projects were in low-income communities, Donnell said. The projects have to be able to island for 24 hours.

“We were targeting customers who are most vulnerable to outages,” he said.

Behind-the-meter microgrids were not eligible for funding because other programs such as California’s Self-Generation Incentive Program and net billing are available for those microgrids, he said. “The CPUC said that would create double subsidies,” he added.

However, if the developer wants to include existing or planned behind-the-meter assets, they could be included in a project, but not funded through the MIP.

Assets will be owned by award recipients or third parties

PG&E won’t own the microgrid assets. They will be owned by the awardees or third parties, who would have the option of selling grid services.

Twenty-two of the roughly 50 project application inquiries made it through initial program screening requirements and technical consultations with PG&E. Each of those 22 projects received an application development grant of $25,000 to offset investments to develop project applications.

Lorenzo Kristov, a consultant to the Climate Center who specializes in electric system policy and design, said that he had hoped the MIP would give eligible applicants $25,000 to help write the application, which would open the program to more communities.

“The PGE program bases the awards on the ability of the communities to muster good application writing capability, irrespective of the local needs or potential local benefits,” Kristov said.

Should the state–not ratepayers–pay for the microgrids funded by MIP?

Kristov said that the microgrids should be paid for by the state budget, not ratepayers.

“PG&E's process will fund 18 projects in the two phases, but how many communities in PG&E’s territory still suffer severe risks from power outages? Community energy resilience should be a top state priority,” he said.

Kristow also argued that MIP funding should pay for behind-the-meter resources such as rooftop PV on a grocery store, Kristov said.

The MIP program provides a total of $79.2 million in funding for PG&E, $83.3 million for SCE and $17.5 million for San Diego Gas and Electric. Project developers selected under the MIP each receive up to $15 million in funding for the design and development of a multi-customer, front-of-the-meter community microgrid.

Ultimately the goal of the MIP is to meet the needs of as many PG&E customers as possible, especially the most vulnerable ones.

“These are our customers and we’d like to see them energized whenever possible,” Donnell said.

While the MIP funding aims to deploy community microgrids to prevent the effects of wildfires and outages, another green resilience effort is also embracing microgrids.

The Clean Coalition has launched the Green Rebuild Initiative to rebuild homes in Los Angeles that were destroyed by the recent wildfires with clean microgrids.

Los Angeles wildfire destruction creates opportunity for green rebuilding

“We have a ripe opportunity to rebuild a community, and we can do that with microgrids in place,” Lewis said. For example, one neighborhood in the Malibu area has about 100 homes and  could benefit from a community microgrid.

“We want to rebuild in a super green fashion,” he said. Super green homes are 100% electric and include enough solar to achieve net zero energy and also deploy energy storage for resilience.

Clean Coalition is offering to kick off the rebuilding of five homes by providing renderings, solar and storage microgrid feasibility studies, solar and storage sizing, and by introducing homeowners to potential contractors such as architects and builders. In order to receive this help, homeowners have to commit to going “super green” and making their designs public, Lewis said.

The premium for going “super green” would be about $100,000, and $50,000 of that amount would qualify for tax incentives and rebates, he said.

Whether they are avoiding outages due to PSPS events in Northern California or used to rebuild homes destroyed by fires in southern California, microgrids offer environmental, economic and resilience benefits in the wildfire-prone state.