California to Consider 4 Utility Microgrids to Help Avert Possible Capacity Shortfall

A plan by San Diego Gas & Electric (SDG&E) to build four utility microgrids won an initial nod last week in a proceeding underway before the California Public Utilities Commission (CPUC) to avert a possible capacity shortfall for the next two summers.

The utility microgrids were included in what California calls a “proposed decision,” the pre-vote recommendations of an administrative law judge that carry heavy weight in the commission’s rulings. 

A final decision on the microgrids will come during the commission’s Dec. 2 meeting.

In addition to the microgrids, the commission will look at a range of other energy projects and ideas to address the potential shortfall (R.19-09-009). Gov. Gavin Newsom issued a warning about the shortfall in July, and soon after the commission began soliciting ideas on how to address it.

Details on the SDG&E microgrids

SDG&E intends to build two of the microgrid projects at its Boulevard and Paradise substations. The utility said in a filing to the commission that it is still working out specifics on two others.

The Boulevard and Paradise microgrids would serve low-income communities that have already installed renewable energy. The utility would add long duration storage, and the microgrids would provide power for public safety operations, such as fire and police. 

Planned for a desert region on the Mexican border near the southeastern edge of San Diego County, the Boulevard project already has 600 kW of installed renewables. The microgrid’s energy storage would absorb excess solar and discharge it to the grid when needed. 

The Paradise microgrid would operate in a similar fashion. To be built on utility property at a substation in Skyline, a hilly area in southeastern San Diego, Paradise would tap into 1,500 kW of renewables installed on the distribution circuit that would feed the microgrid.

SD&GE plans to issue competitive solicitations for the microgrids through an ongoing request for proposals where the utility is seeking resources for 2023-2026.

What’s left out

The proposed decision is the commission’s latest move in an ongoing proceeding to spur microgrids, a product of state law SB 1339. The proceeding drew a range of proposals from the microgrid community, most of which the administrative law judge declined to address.  Among those not included were proposals for resilience incentive payments, emergency services tariffs, performance-based incentives, new battery storage incentives, greater integration of renewable fuels into microgrids, and modifications to demand response tariffs.

Cameron Brooks, executive director of Think Microgrid, which is owned by the same parent company as Microgrid Knowledge, said that the proposed decision was an “unimaginative response.”

“Without taking away from the merits of the projects approved in this proposed decision, it’s unfortunate that the commission continues to rely on a very narrow interpretation of their mission with regard to microgrids,” Brooks said. 

“The goals of SB 1339 are ambitious, urgent and broad. It calls on the commission to prioritize public safety and remove barriers to microgrid commercialization in order to address immediate challenges. The commission seems more intent on determining what they can’t do than what they can, dismissing calls for competitive procurement and only taking action on a limited set of utility proposals,” he said.

Future of LA County plan

A plan by Los Angeles County to create a regional microgrid agency also did not make the administrative law judge’s cut. The proposed agency would act as a centralized resource to help local governments and public agencies implement microgrids. The commission did recommend the county seek funding through the state’s $200 million microgrid incentive program for three microgrids that it proposed as part of the plan.

The LA proposal and others may not be dead in the water — the administrative law judge said it might take up some of the proposals elsewhere.

“All proposals submitted by parties were considered, but given the large number of parties and issues, some proposals may receive little to no discussion in this decision. Issues within the scope of this proceeding that are not addressed here, or only partially addressed, may be addressed in subsequent tracks of this proceeding,” the administrative law judge wrote.

In addition to ruling on the SDG&E microgrids during the Dec. 2 meeting, the CPUC will consider several other programs proposed outside of the microgrid proceeding. 

These include raising to $2 per kWh a payment for residential customers who reduce energy use at critical times through demand response. The commission also will consider doubling payment for an existing emergency load reduction program to $2 per KWh.

Other programs on the table for approval include:

• $22.5 million in incentives for customers to install new smart thermostats so that they can reduce their use of air conditioning when the grid is under strain.
• Two dynamic rates pilot programs to test the effectiveness of customer response to electricity rates that change rapidly during grid emergencies. 
• Continuation and extension of the Flex Alert campaign that asks electricity customers to voluntarily reduce their energy use during periods of high demand.
• A program for rapid deployment of energy efficiency measures at peak or net peak periods.
• Increased utility demand- and supply-side procurement.

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