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California Dreamin' of Distributed Energy Resources, as Utilities File Plans

cali distributed energy

In many ways, California is a special case. With an economy about the same size of Canada’s ($2.3 trillion in 2014) and a population of more than 38 million (roughly one in eight Americans is a Californian), California’s energy policies affect huge numbers of people and a large portion of the American economy. And now, under new rules set by regulators, California’s investor-owned utilities are getting set to pull rooftop solar, energy efficiency, energy storage, and other distributed resources into their system planning. In California, the electric power system is not just about power plants and wires any more.

On July 1, Southern California EdisonSan Diego Gas & ElectricPacific Gas & Electric filed their Distribution Resources Plan Proposals, or DRPs, with the California Public Utilities Commission (PowerSuite users can click through for the full plans). The proposals detail how California’s investor-owned utilities plan to comprehensively integrate distributed energy resources (DERs). The plans are intended to begin the process of moving the utilities toward a more open and flexible grid and to include integration of distributed renewable generation, energy efficiency, energy storage, electric vehicles, and demand response into their distribution system planning, operations, and investment decisions. This order is the first step in a process started by AB 327, a law passed by the California legislature last year.

Although California has long been a leader in incorporating advanced energy technologies into the energy mix, comprehensive planning for the use of DER is a brand new exercise for many utilities.

“From a distribution planning perspective, it most definitely allowed for thinking with tools we haven’t normally used,” Mark Esguerra, Pacific Gas and Electric (PG&E) Principal Engineer, said in an interview with Utility Dive. “Instead of looking strictly at wires solutions, we started looking at DERs as non-wires solutions and at what the most cost-effective way of using them is to meet our reliability, safety, and affordability standards.”

One potentially groundbreaking aspect of these DRPs is an agreed-upon set of measurements for DERs: their value as tools to increase grid capacity and reliability and otherwise prevent costly upgrades. Utilities, regulators, and the industry have been grappling with how to measure the value of technologies like rooftop solar for a long time.

The rulemaking was opened last August to establish policies, procedures, and rules to guide California’s investor-owned electric utilities in developing their DRPs. This rulemaking also will evaluate the utilities’ existing and future electric distribution infrastructure and planning procedures with respect to incorporating DERs into the planning and operation of their electric distribution systems.

It is also part of a broader process moving California toward a 21st century electricity systemunder multiple dockets. Following a forum involving utility and advanced energy company executives in February, the Advanced Energy Economy Institute is working to develop a white paper that outlines a shared set of guiding principles and long-term vision, and also lays out steps for moving towards that vision in a more coordinated fashion.

“California has taken a huge step forward with these new plans, focusing on how DERs are integrated into each utility’s overall resource plans,” said Steve Chadima, AEE Senior Vice President and director of California initiatives. “California is recognizing the potential that these resources can provide.”

California’s advanced energy economy is a huge and growing part of our nation’s economy. Join an influential group of advanced energy business leaders and state policy-makers at Pathway to 2050 to discuss opportunities to accelerate California’s economy through the growth of advanced energy. Register here.


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