Local Governments Want Communities — not Utilities — to Control Microgrids in California

A coalition representing 14 cities and 23 counties in California this week urged state regulators to give communities a chance to control community microgrid pilots and not restrict them to utilities.

The Local Government Sustainable Energy Coalition (LG) said the state’s current “top down” approach — which puts utilities in charge of community microgrid programs — is not working. The group filed the comments before the state California Public Utilities Commission which is looking at how to more quickly commercialize microgrids (Rulemaking 19-09-009).

The coalition noted the failure of several utility microgrid projects to go forward this year, and said that many of those that are being built rely on diesel generation.

“A more effective approach to piloting community-based microgrids would be to develop them in the context of communities, empowering LGs to take the lead on designing, developing and executing community microgrids,” said the coalition.

The coalition said it represents three-quarters of California’s population which accounts for two-thirds of the state’s electric demand. In addition to municipalities, its members are community choice aggregations, regional energy networks, school districts, council of governments, and non-profit organizations.

How it would work

Under the proposal, communities with experience managing large energy project would serve as microgrid program administrators. As such, they would receive money carved out by the state for community microgrid pilot programs. 

In addition, the communities would receive funding for ‘resiliency officers,’ who would bring expertise to microgrid planning that local elected officials and city staff lack. The funding would go to communities where wild-fire related power outages last more than four hours in 2019 and 2020.

The community-led pilot programs also would serve as testing ground for microgrid tariffs being contemplated by the commission.

The coalition said it wants to see tariffs that encourage clean energy microgrids over “dirty diesel generation backup generators.” It also recommended that the tariffs take into account microgrid and utility functions not only during outages, but also during blue sky conditions.

Problems with the status quo

The group raised several concerns about the status quo, citing delays microgrids face when interconnecting with utilities — a frequent concern raised within the industry.

Interconnection difficulties stem from utility “hostility” toward distributed energy resources, a situation that the coalition described as born of skewed financial incentives. 

The interconnection process is “largely stacked toward the for-profit utilities with little hope that any disputes that arise will be resolved in the ratepayer’s favor,” the coalition said.

The group added, “There is no apparent arbiter to intervene when interconnection fees escalate; no way to validate if infrastructure costs borne by customers are fair and just; confusion on equipment approval; and an unlimited array of required and ancillary and prerequisite upgrades to the grid infrastructure, including telemetry.”

The coalition comments were filed as part of 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.

In the second phase, the commission is taking on more complex issues affecting microgrids, among them microgrid tariffs and  community microgrid pilots.

Faltering year for California utilities

The second phase comes in what’s proven to be a faltering year for utility microgrid plans in California.

Pacific Gas & Electric, the state’s largest utility, in March backed out of plans to initiate an estimated $1 billion in permanent microgrid projects after receiving bids and realizing it could not get the projects built before 2020’s wildfire season, as planned. The utility initially said it would postpone the permanent microgrids this year, but take them up next year. Since then, it has canceled the program entirely. Instead, it has focused largely on installing simpler, temporary microgrids that rely on diesel generators. 

Southern California Edison also nixed plans to build microgrids this year. The utility cited a tight schedule to get the microgrids built that drove up costs.

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