California PUC Rejects Challenge by Long Beach to Microgrid Decision

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The California Public Utilities Commission (CPUC) has rejected an argument by Long Beach that the commission failed to achieve the state’s goal of overcoming barriers to microgrid development in a January tariff decision.

Long beach

Long Beach marina and shipping port. By Sergey Novikov/

Through its Board of Harbor Commissioners, Long Beach challenged three aspects of the decision, which grew out of a state law, SB 1339, designed to boost commercialization of microgrids.

The city argued the PUC failed to remove a major barrier to microgrid development, which has slowed efforts to develop a microgrid at the Port of Long Beach.

The PUC made a mistake by failing to address a Southern California Edison rule generally barring the resale of the utility’s electricity, according to Long Beach. The rule, called Rule 18, is a “major” barrier to microgrid development, according to the board, which oversees a 3,200-acre port handling about a fifth of the cargo moving through US ports.

In a situation where an energy storage facility partly charges from power supplied by a utility, the utility can prevent the microgrid owner from selling power from the storage device to another entity, according to the board.

PUC rejects Long Beach arguments

In a decision released April 16, the PUC said Long Beach was wrong in its assertion that the commission was required by California’s microgrid law to remove or reduce “all” potential barriers to microgrid commercialization.

The law directs the PUC to “reduce barriers,” not “remove barriers” or “reduce all barriers,” as the city alleged, according to the commission.

“[SB 1339] does not require the commission to reduce or eliminate all barriers to microgrid commercialization, including every potential barrier to each type of possible microgrid configuration,” the PUC said.

In describing how the PUC’s decision lined up with SB 1339’s goals, the commission noted it had ordered the state’s major investor-owned utilities to allow microgrids owned by public agencies, or a third-party that serves a facility operated by a public agency, to supply electricity to a critical facility operated by a municipal corporation on an adjacent premise to conduct emergency and critical operations during a grid outage.

Also, Long Beach argued the PUC used an outdated list of critical facilities in its decision. The list didn’t include maritime transportation, according to the harbor board.

The PUC dismissed the argument, saying the list was subject to future changes.

Finally, the PUC dismissed Long Beach’s concerns that the decision implied nonregulated entities, like cities, could come under PUC jurisdiction through the “over-the-fence” rule. The rule requires entities be deemed utilities if they sell electricity to more than two adjacent parcels or across the street.

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The PUC agreed that municipal corporations, like Long Beach, never come under PUC jurisdiction, saying the issue was “settled law.” It also clarified that there were “limited exceptions” to the over-the-fence rule.

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  1. James Kempf says:

    I published an article in on March 5 with titile “Is Blockchain the Solution to California’s Microgridlock?” It describes how SCE and the Port of Long Beach Microgrid Authority could use blockchain technology to record where the energy going into storage came from and from which source customers were buying, so that the Port Microgrid Authority would no longer be reselling SCE’s electricity. Customers would be billed separately with charges for electricity sourced from the Port Microgrid Authority and from SCE clearly spelled out and would pay each bill separately. If, however, the battery is owned by the Port Microgrid Authority, SCE may need to pay for storage charges to account for wear on the batteries. The system works similar to how joint oil and gas storage facilities work.

    I think this scheme could basically remove the question from a dispute at the regulatory level which seems unlikely to proceed given the ruling reported above, and move it to a business negotiation level, where the two parties need to agree on technology, terms, and conditions. Provided of course both sides really want to reach an agreement.

    The article is here: