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California effort to promote microgrid development drawing criticism

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Peter Key's picture
Freelance Writer, Editor, Consultant Self-employed

I've been a business journalist since 1985 when I received an MBA from Penn State. I covered energy, technology, and venture capital for The Philadelphia Business Journal from 1998 through 2013....

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  • Feb 3, 2021
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An effort by the state of California to boost microgrid development is proceeding apace but not without criticism that it doesn't sufficiently address the needs of the state’s underserved communities.

The latest advancement came last month when the California Public Utilities Commission approved a proposed decision that ordered the state’s three big investor-owned utilities to jointly develop a statewide Microgrid Incentive Program with a $200 million budget. The program is meant to fund clean energy microgrids to support the critical needs of vulnerable communities affected by grid outages, as well as to test new technologies or regulatory approaches that could speed microgrid development.

The decision fell under Track 2 of Rulemaking 19-09-009, which the commission initiated in response to a 2018 bill that required it to take actions to facilitate the commercialization of microgrids for distribution customers of the state’s three large IOUs. Senate Bill 1339 also required publicly owned electric utilities to develop and make available processes for the interconnections of customer-supported microgrids. The bill was intended to encourage the development of microgrids as resources that can, among other things, keep the lights on for people, businesses and critical facilities during Public Safety Power Shutoffs, as the shutoffs undertaken by utilities to prevent their equipment from sparking fires during periods of sustained winds are called.

In addition to directing Southern California Edison, Pacific Gas and Electric Company and San Diego Gas & Electric to develop a Microgrid Incentive Program, the decision directed the three utilities to revise their rules to allow local government microgrids to service critical customers on adjacent parcels; to develop paths for evaluating and approving low-cost, reliable electric isolation methods; and to create renewable microgrid tariffs that prevent cost shifting.

The decision also created a Resiliency and Microgrids Working Group within the CPUC to facilitate discussions meant to continue supporting the goal of resiliency and the commercialization of microgrids within Track 3 of Rulemaking 19-09-009.

Additionally, it resolved issues related to temporary generation from Track 1 by adopting an interim approach for minimizing emissions from backup generation during Public Safety Power Shutoffs and transitioning to clean temporary generation during those events next year.

Prior to the decision being approved, a group called Reclaim Our Power! The Utility Justice Campaign had proposed it be expanded.

In a Jan. 11 letter, the organization said the Microgrid Incentive Program was a good start but needed more than $200 million to reverse historic disinvestment in the Black, Indigenous and people of color communities that has made it challenging for them to access financing to develop microgrids and other energy projects.

The group also said the public should be allowed to determine which facilities are considered critical and asked the CPUC to implement a new tariff that would facilitate community development of microgrids independent of the state’s three big IOUs.

CPUC’s efforts to implement Senate Bill 1339 have drawn fire before.

For example, in Track 1 of Rulemaking 19-09-009, PG&E submitted a plan for deploying a microgrid enablement program before the 2020 fire season that was criticized by environmental, social justice and consumer advocates, who wanted it to assure that the microgrids would only use wind and solar generation and battery storage. Community Choice Aggregators, meanwhile, objected to PG&E deciding how to power microgrids within their service areas.

In response, PG&E withdrew its microgrid plan and instead contracted mobile diesel generators as backup power sources for the 2020 fire season. That was a “lose-lose” situation for all parties involved, said Les Guliasi, a researcher in the University of California, Santa Cruz’s Sociology Department, who wrote an article about the proceedings.

“There’s an old saying about how the perfect becomes the enemy of the good, and that’s really what happened here,” Guliasi told Allison Arteaga Soergel for a story on the UC Santa Cruz News Center about his article, which was published in a journal called Energy Research and Social Science.

While social justice organizations want the CPUC to do more to promote microgrid development for the state’s vulnerable communities, a private-sector effort to build microgrids for California’s affluent landed its first two customers last month.

The effort is a joint initiative between microgrid control software developer CleanSpark Energy and energy developers to build microgrids for large homes and estates. Its first customer is a 14,000 square foot estate under construction in Healdsburg, Calif., for which CleanSpark and solar generation installer Bay Area Energy Solutions are jointly developing a pilot microgrid. The second customer is the owner of an existing home in Santa Barbara for which CleanSpark was contracted to deliver energy modeling, analytics, and the implementation of storage and controls.

 

 

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Bob Meinetz's picture
Bob Meinetz on Feb 3, 2021

Peter, CPUC's $200 million handout to our state's gas and renewables interests is a pittance compared to the $2 billion bill being submitted to PG&E ratepayers to cover wildfire liability. When those spanking new microgrids burn up in the next wildfire, no doubt our corrupt CPUC will tack their replacement cost onto electricity customers' bills, too.

The Federal Energy Regulatory Commission (FERC), with a history extending back to the 1920s, is again taking a hard look at profiteering in U.S. electricity. It's long overdue.

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