With California’s Wildfire Season Coming, San Diego Microgrids Face Two-Year Delay

As California’s wildfire season approaches, San Diego Gas & Electric (SDG&E) faces regulatory delays of up to two years for 100 MW of proposed storage-backed microgrids that aim to provide resiliency, especially to protect essential community services.

“As a utility company, our mandate and charge is to provide safe and reliable services. We think microgrids are a great strategy to do that,” said Wes Jones, communications manager for SDG&E. “Unfortunately, there is a lot of uncertainty,” he added.

That’s due to regulatory delays from the California Public Utilities Commission (CPUC). A proposed ruling from an administrative law judge calls for the utility to open up to third-party bidders the company’s seven microgrid projects, some of them already “shovel ready.”

The commission has put on hold a few times a decision on the proposed ruling. SDG&E expects additional intervenors to file comments in the case in mid-June (Proceeding A1802016).

“We feel strongly these microgrids are needed sooner rather than later” — SDG&E’s Wes Jones

If the commission approves the projects as submitted, a few of them could be operating in 10 to 12 months, Jones said. Opening up the projects to third parties means the projects would be delayed about two years.

Argument for bidding

In a March filing before the commission, LS Power argued in favor of putting the projects out to bid. The independent power producer said that the utility’s estimated price tag for the energy storage projects — $248.6 million for 100 MW or $2,486/kW— is about twice recent estimates by analysts like Wood Mackenzie Power & Resources. LS Power contends that a fair solicitation would ensure cost competitiveness.

Third-party storage providers have integrated equipment into the grid without significant problems; however, a utility can effectively eliminate potential competitors by claiming otherwise, LS Power said.

Middle ground

Alex Morris, vice president of policy and operations for the California Energy Storage Alliance (CESA), explained that the projects aim to meet the requirements of California Assembly Bill (AB) 2868, which authorized up to 500 MW of utility-owned storage.

“CESA was involved at the time, and the bill was looking to allow the utilities to play around and figure out how storage could help,” he said.

See related story: Are California Utilities Heading Down the Wrong Path as Wildfire Season Approaches?

“We have suggested the commission look for more of a middle ground so we can move forward. Obviously there’s a lot of learning going on. The utility is trying to deploy helpful benefits.” He added that it’s important for the state to learn about resiliency, especially for disadvantaged communities vulnerable to fires. CESA doesn’t favor any specific type of microgrid or storage ownership, Morris said.

Bad signal

Ray Hohenstein, market applications director for storage integrator Fluence, said the company has both utility and independent power producer customers, and doesn’t favor one or the other. The company wants to see AB 2868 projects implemented soon.

“Any time there are shovel-ready projects ready to go, it sends a bad signal to have them rejected,” he said. “Zero storage has gotten into the ground related to AB 2868. Energy storage can provide important services to California at a time it’s so important. We need to figure out how to deploy storage at a larger scale.”

While SDG&E hasn’t recently experienced fires as devastating as those in other areas of the state, the potential for destructive fires looms, said SDG&E’s Jones. The utility’s last large fire occurred in 2007.

“We feel strongly these microgrids are needed sooner rather than later,” said Jones.

Microgrids part of utility wildfire planning

SDG&E identified the locations of the projects by working with members of the community to identify critical services that needed protection during California’s wildfire season, said Jones. The proposed microgrids would all power critical services during emergencies.

“We’re charged with providing safe and reliable power. These projects would allow us to do this, and we are well suited to provide microgrids,” said Jones.

The projects, which would be integrated at the utility distribution level, are:

• The Kearny project, 30 MW/40 MWh that would serve the City of San Diego Metropolitan Operations Center and other emergency services in Kearny Mesa
• Melrose project, 20 MW/20 MWh in Vista serving a fire station and other services
• Boulevard project, 10 MW/10MWh in Boulevard serving a fire station and other services
• Clairemont project, Clairemont Mesa, 10 MW/10 MWh for a library and fire station
• Paradise, 10 MW/10 MWh in Skyline San Diego, serving two fire stations and a police department
• Elliot, 10 MW/10 MWh in Tierrasanta, serving a fire station and library
• Santee, 10 MW/10 MWh in Santee for a fire station and dam pump station

“‘The worst-case scenario would be a bad wildfire season. We are preparing for this. We are planning well and collaborating with emergency responders. But microgrids are part of the future of planning for wildfires and providing services to our customers,” said Jones.

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