California PUC Urged to Give Non-Utilities a Fair Crack at Microgrid Projects

Shell Energy and Enel X are urging the California Public Utilities Commission to make sure non-utilities have a fair crack at providing microgrids in the state’s effort to ease the effects of planned power outages.

The comments are in response to microgrid proposals released on January 21 by Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E). 

The proposals are driven by a new law (S.B. 1339) that seeks to spur microgrid development in the state. The commission in December divided its microgrid proceeding (R.19-09-009) into two tracks and directed utilities to file microgrid plans that could be put in place by September 1, ahead of the upcoming wildfire season. State regulators hope to reduce the effects of utility public safety power shutoffs — planned power outages designed to reduce fire risks.

Proposals by PG&E, the state’s largest utility, total $319 million for this year, which includes operating 300 MW of mobile generators for temporary microgrids. The San Francisco-based utility in December issued a request for information to test the market for mobile generators.

In comments filed with the commission, Shell Energy opposed PG&E’s proposal to allow cost recovery for programs that enable investor-owned utility ownership of distributed generation assets, including temporary generators that Shell Energy said may not be cost-effective and that my increase greenhouse gas emissions during resiliency events.

Utility as facilitator, not owner

“Microgrid deployment is a potentially competitive service that should be facilitated through a competitive market structure,” Shell Energy said.

The commission should order PG&E to hold a solicitation for microgrids to be deployed by third parties, according to Shell Energy.

“PG&E should have a role in facilitating the deployment of microgrids, but PG&E should not compete with third parties to own or develop these microgrids,” Shell Energy said. “Rather than promote development or ownership of microgrids by the investor-owned utilities, the commission should establish rules that encourage third parties to develop and own distributed generation and microgrids.”

Enel X told the commission that is concerned about PG&E receiving preferential treatment for permitting or siting its proposed resources compared with third-party projects.

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Also, regulators should be cautious about SCE’s plan to provide behind-the-meter microgrids, for which there is a robust market, according to Enel X.

The commission should make sure third parties have the same access to system data that utilities have, the company said.

Enel X said it would be concerned if SDG&E required third parties to use microgrid software and hardware controls that were developed by a company affiliated with the utility.

“Many developers have their own operating systems and software, some of which have been developed in-house and are similarly proprietary,” Enel X said.

Lay out the framework

It makes sense to move as quickly as possible to address resiliency issues before the next wildfire season, but the PUC should not let the initial round of utility proposals be precedent setting, according to the California Energy Storage Association.

“A sustainable framework that lays out the principles and standards of review for future resiliency solutions and opportunities is needed to allow for the consideration of third-party proposals and solutions,” the trade group said.

CESA said SCE’s proposal appeared to be the most transparent plan offered by the three investor-owned utilities and could be the basis for a long-term framework for developing microgrids. 

“There appears to be tremendous potential for this transparent and comprehensive process to support the development of microgrid tariffs, which can support the deployment of wider scale, more autonomous deployment of third-party resiliency solutions through the availability of information on broader resiliency needs,” CESA said. 

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