Google Spells Out What California Must do to Unlock the “Tremendous Potential” of Microgrids

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To unlock “the tremendous potential of microgrids,” California regulators need to make two key changes to microgrid rules proposed earlier this month, according to technology giant Google.

microgrid rules

Google headquarters in Mountain View, California. By achinthamb/

One of the provisions would allow microgrids to serve multiple commercial buildings without being categorized as ‘utilities,’ a designation that imposes a level of regulation that is crippling for small entities like microgrids. 

The second would change who devises microgrid tariffs. While the proposed decision calls for utilities to undertake the task, Google says it should instead be done by a stakeholder group led by staff of the California Public Utilities Commission.

Google recommended the changes in written comments to the commission following the release December 7 of a proposed decision by Administrative Law Judge Colin Rizzo in Track 2 of the complex state proceeding (19-09-009) to help commercialize microgrids. 

The company has become involved in the proceeding because it plans to build multiple microgrids in California, a state besieged by wild-fire related power outages.

“Google is poised to make very substantial investments, using its own funds, to design, build and operate large, fully functional microgrids — i.e., microgrids that operate on a 24/7 basis, and not merely in emergency ‘island’ mode during grid outages — in campus-type settings at various locations in California,” the company wrote. “This investment in microgrids is part of Google’s ambitious commitment to sustainability.”

The company noted that it will design, construct and operate its microgrids without requiring any funding by utility ratepayers.

Google plans microgrid in San Jose

Google already has a microgrid project in the works for an 81-acre high density mixed-use development to accommodate its expanding workforce in San Jose. As proposed in plans before the city, the microgrid would include 7.8 MW of solar and 10 MW of batteries and no more than 47 emergency diesel generators. Controls connecting multiple buildings would allow sharing of power across a distribution network. 

It’s commonly believed that project’s like Google’s run afoul of regulations if the buildings sell energy to more than two contiguous parcels or across a street. In what’s known as the over-the-fence rule, the microgrid then becomes subject to utility regulation.

However, Google disputes this interpretation of the rule, arguing that that it fails to recognize a longstanding principle of California law that a private enterprise can supply electricity to nearby third-parties as a contractual matter.

Google cited a California Supreme Court ruling nearly 100 years ago, Story v. Richardson. The court found in favor of a building owner who argued that the building could not be taxed as a utility for supplying electricity to tenants and others that occupied property in the vicinity.

Correct interpretation of this law is crucial, according to Google, because the commission has been tasked by state lawmakers (SB 1339) to find ways to help commercialize microgrids. 

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Microgrid rules too narrow

“Simply stated, to encourage investment in microgrids by third-party enterprises like Google, it is not required, nor even appropriate, to regulate as a ‘public utility’ the third-party owner-operator of a microgrid,” Google wrote.

Google also criticized the proposed decision for narrowly focusing on municipal microgrids and those designed for critical facilities in an attempt to ensure benefits to public, and not private, interests.

“This statement fundamentally misconstrues that private investment in microgrids, particularly at the scale Google proposes, will improve the electrical grid, address microgrid technical challenges, support California’s policies to integrate a high concentration of distributed energy resources, and play a role in implementing other important policy goals,” the company said in its written comments.

The Legislature directed the commission to address tissues which substantially impact all Californians, not just municipal electric customers. Any tariff, therefore, should encompass microgrids built for commercial and industrial purposes, Google said.

At the same time, Google commended Rizzo for approaching the complex issues surrounding microgrids in a “conscientious manner” and “admirably” documenting “the divergent views of an exceptionally large number of parties who have participated in this proceeding.”

The administrative law judge’s proposed decision awaits consideration by the full commission.

Track news about California’s work on new microgrid rules. Subscribe to the free Microgrid Knowledge Newsletter.

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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.


  1. What the hell would Google know about the effect of microgrids on the CA electric system? Google is a for-profit company that is out for itself. Google could care less about VARS and voltage correction for large inductive loads. The loophole has always been that a CoGen doesn’t have to correct for voltage or follow a voltage schedule other than unity if they are under 10 MW per the interconnection standard and agreement.
    Unless you are naïve about microgrids, the electric distribution and transmission systems have entangled and superimposed communication data across lines which are inherent on each system. You really can’t connect to transmission lines without provisions for transfer trip and/or powerline carrier communication for relays.
    So, let’s just talk about distribution level connections. Let’s say you want to island for a day or two on a 12kv or 21kv circuit. What is the smart meter suppose to do when the utility reconnects and the forced interrogations shows a meter usage that doesn’t jive when it separated from the system. You might have gotten away with this ten years ago, but now with smart meters you have a big problem reconciling the meter reads. Then there’s the smartgrid/FLSIR where each distribution circuit radial is program to restore from a backtie if conditions are met. During PSPS the FLISR is disabled, but otherwise an island condition on an associated circuit defeats the benefits of FLISR is the electric control center is not notified immediately and toggling recloser positions in DMS..
    Let’s say the CA legislature forces the big utilities to rent/tariff distribution lines against their will and common sense. A microgrid islands now responsible for any damage or safety incident that occurs while islanded. It’s sort of like you rent a piece of equipment at United Rental and you either purchase insurance or you pony up for any damage you cause.
    This basically boils down to greed and corporate profit where big entities can whine about not being able to use the utilities lines to service a campus complex a few meter away, but they have no clue to the affects on system reliability and safety that’s maintained by the utility and the 24/7 electric control centers. If you chop-up a transmission line to facilitate an island all of the impedance relays have to be evaluated in real-time by protection engineers and elec techs are called-out to make relay settings. If you chop-up a distribution line, then distribution operating engineers have to evaluate the recloser and substation feeder breaker settings and dispatch T-men or substation electricians to make overcurrent and ground relay changes in real time. Then once an entity wants to come off an island and sync to the grid the utility will have inspection criteria before submitting the utilities system to a bad parallel. Google is out for Google and could care less about the rest of the regions stability.
    The reality is that the distribution circuit could be easily loaned, rented or squatted on by a CoGen, but there are administrative issues with billing and more importantly cyber security that are totally neglected. A perfect example is SolarWind. If an island wants to feed “read-only” information to the utility, that cyber link now becomes an access and intrusion outlet. If Google wants to feed a business complex a couple hundred yards away then it should build its own backtie and not intrude on the utilities infrastructure and it’s cyber connections.

  2. “If Google wants to feed a business complex a couple hundred yards away then it should build its own backtie and not intrude on the utilities infrastructure and it’s cyber connections.”

    Well Scott M, your utility bias and rationalizations are duly noted. So, what happens to YOU if Google gets it’s way to operate their own micro-grid and many others follow?

    “The company noted that it will design, construct and operate its microgrids without requiring any funding by utility ratepayers.”

    Just how will the IOU utility insert itself in the revenue stream and how does that affect your wages, benefits and pension? Perhaps instead of grousing about FLISR, DMS, and PSPS, perhaps you should polish up your resume and send it to Google, just in case. By the way Merry Christmas to you.

    • It won’t affect me. I sell puts and calls. Maybe Microgrid Knowledge needs to do an article on how large microgrids interface their computers with the utility and the CAISO? Basically, how “read only” info gets to the utility for billing, meter reconciling during islands and how outage exemptions are tallied in CPUC performance metrics. Conductor, poles, underground and relays are pretty straight forward to deal with the caveat of safety concerns for the touchers. It’s the administrative requirements and cyber security that isn’t addressed on this site. If this site really wanted my utility input they could have emailed me a year ago or looked me up on LinkedIn. I don’t see where this site is interviewing anyone with recent utility operating experience. I only see innuendo that the utilities are not receptive to being forced to tariff their lines to others don’t have the full picture on voltage correction and grid stability. Environmentalism coupled with the generation divestiture has thwarted generation on the CA coast with only Moss Landing and some diesels at Humboldt left on the coast. Maybe if Migrogrid Knowledge were to attend the yearly System Restoration exercise for one of the WECC utilities they’d have a better picture on islands, ferranti effect and black-start scenarios by region.

  3. Scott M. your last sentence: “Maybe if Migrogrid Knowledge were to attend the yearly System Restoration exercise for one of the WECC utilities they’d have a better picture on islands, ferranti effect and black-start scenarios by region.”

    This points out that the electric industry as a whole is nothing more than a political pendulum. The long term effects are old infrastructure that is (still) in service that should have been hardened decades ago. These regional constrictions have not been addressed by CIP over years of use. Folks in California want to flip the light switch on and illumination happens, no ferranti effect, black-start charge up of grid assets or safety switches are within the end user’s queue. What these folks are beginning to understand is that blackouts can become the new normal, a PSPS could last from hours to days and the food and drugs that are kept in their refrigerator/freezer can cost hundreds of dollars to replace with every event. The ratepayers understand with TOU and “demand charge” rate spiking their average electricity rate is around $0.20 to $0.25/kWh. Many solar PV installers are selling combined solar PV and energy storage as a unit. The first tranche of folks will be those with the monetary resources to buy in. The second tranche will be the “social justice” crowd pushing community micro-grids or mini-grids with local resiliency against PSPS and blackout events.

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