If persistence can win the day, the Oakmont Village Association, a community of seniors in a fire-prone region of Oakmont, California, may be the role model when it comes to building a community microgrid.
We first reported on the group’s efforts in 2020 when, frustrated with utility outages, the seniors decided to take matters into their own hands and pursue a microgrid.
Two years later, they have won acceptance into a new Pacific Gas & Electric (PG&E) program that aims to move community microgrids forward.
The community, which includes 1,800 acres, 3,204 homes, 24 businesses and a fire station, has experienced nine public safety power shutoffs in the last four years. The association wants to install a microgrid consisting of solar, storage and a fossil fuel generator to provide three days of power during outages.
But it has faced an obstacle common to community microgrids, the so-called “over-the-fence” rule that prohibits microgrids from providing power to adjacent properties. Designed to protect utility franchise territories, the rule has stymied community microgrids throughout the US.
Acceptance into PG&E’s Community Microgrid Enablement Program (CMEP) is an important step in the journey for the senior community. This week they learned that being part of the program allows them to proceed without worrying about the regulation they thought stood in the way.
Paul Doherty, senior communications strategist for PG&E, said that CMEP preserves the grid-connected arrangements between a customer and PG&E when the customer’s community microgrid is in island mode.
This means that not only can those in CMEP or the Community Microgrid Enablement Tariff (CMET) serve customers on adjacent properties but so can certain other microgrids. They include those owned by public agencies–or by a third-party that primarily serves a facility operated by a public agency–that serve a critical facility operated by a municipal corporation during a grid outage, said Doherty.
The customer is buying energy from the same load serving entity – PG&E, in this case – whether the microgrid is islanded and utilizing the project’s generation resources for electric service or if it’s in grid-connected mode, said Doherty.
“As utility distribution owner and operator, PG&E is responsible for providing distribution service for the customers and resources within a community microgrid project under both blue sky and island modes,” said Doherty. “In blue sky mode, the community microgrid is interconnected to and operating in parallel with the distribution system [known as grid-connected mode], and PG&E maintains operational coordination of the delivery of electric service,” he said.
In island mode, a microgrid that normally operates in grid-connected mode is disconnected from the distribution system at the microgrid islanding point. The microgrid generates or produces energy to provide electric service within the microgrid under the operational coordination of the CMEP tariff and according to the microgrid operating agreement with PG&E, said Doherty.
In PG&E’s territory, the over-the-fence restriction takes form in what is known as Rule 18. The restriction was eased earlier this year by the California Public Utilities Commission (CPUC) in Track 2 of the Microgrids and Resiliency proceeding (D.21-01-018). The commission told PG&E to modify Rule 18 to allow microgrids to serve customers on adjacent properties during grid outages, said Doherty. The goal is to overcome barriers created by Rule 18 and advance the commercialization of microgrids. This means that not only can those in CMEP serve customers on adjacent properties but so can microgrid operators who aren’t in the program.
Inside PG&E’s community microgrid program
CMEP aims to help communities overcome the technical, financial, legal and regulatory challenges involved in deploying microgrids both behind and in front of the meter.
“While CMEP provides tools and information for all forms of resilience solutions including behind-the-meter installations, the focus of the program is on facilitating the development of front-of-the-meter, multicustomer microgrids,” said Doherty.
CMEP provides web-based tools and information, enhanced technical support and a Community Microgrid Enablement Tariff, along with cost offsets for certain distribution system upgrades, said Doherty.
For 2021 and 2022, the program provides up to $27 million annually as one-time matching grants for all projects to defray the cost of special facilities or distribution system upgrades, said Doherty. The program also reserves one-third of the total budget, or $9 million per year, to help disadvantaged and vulnerable communities.
CMEP will cover the cost of certain PG&E equipment that’s needed to enable the safe islanding of an eligible community microgrid, up to $3 million per project. These are costs the customers would otherwise have to pay, said Doherty.
The program doesn’t cover generation or storage-related costs, and it doesn’t cover the costs to upgrade the hosting capacity of the distribution or transmission system if needed to accommodate the community microgrid.
CMEP funding is available through the duration of the program, which now is approved through Dec. 31, 2022.
The $27 million in annual capital expenditures allocated for the CMEP is funded through customer rates, said Doherty. The money is subject to a reasonableness review during a general rate case or through a separate application with the CPUC.
The CPUC recently expanded where community microgrids connected to the utility’s electric distribution system can be built.
Before that change, community microgrids could be built only in areas designated by the CPUC as high fire-threat districts, areas that have been impacted by a prior PSPS event, or areas otherwise prone to outages. With the change, implemented in November, communities anywhere in PG&E’s service area can plan microgrids under the CMET but may not receive program cost-offsets under the CMEP, according to the utility.
Because the Oakmont senior community is located in a fire-prone region, it met the earlier requirement. But the task of completing the application wasn’t easy. With the help of a consultant, Kenwood Energy, Oakmont Village demonstrated that it met certain requirements and was able to skip to step four of a nine-step process, said Ken Smith, chair of the microgrid effort, called the Oakmont Energy Resiliency Project.
To date, PG&E has worked with more than three dozen communities and customers to explore potential financial and infrastructure support options for developing microgrids and resilience solutions through the CMEP, said Doherty. “About a dozen of those, including the Oakmont Village Association, have progressed to stage two [the solution assessment stage],” Doherty said. After a project is accepted into the program, it progresses through a number of stages.
One part of the application process was identifying where the microgrid will connect to PG&E, said Smith.
Oakmont Village is served by two substation feeders, one to the north and one to the west. The community is located at the end of the lines in both cases.
One of the substations is served by transmission lines that cross over a large portion of Tier 3 fire zones – the highest risk zones. Three of the last four fires have traveled over the Mayacamas Mountain range, where the transmission lines are often shut down during fire season, he said.
The other substation is fed by aboveground transmission lines that run through wooded areas that are in Tier 2 and Tier 3 fire zones. Sometimes, both circuits that supply power to the community are shut down because of fire danger, said Smith.
One possible burdensome requirement for the Oakmont senior community is burying about 1.5 miles of overhead transmission lines that were built during the 1960s. That would cost between $1 million and $4 million a mile, said Smith. It’s possible the CMEP funding could help pay for that, he added.
To fund the rest of the microgrid project, the Oakmont senior community is looking at signing an energy-as-a-service contract with a private developer under which the community would pay no upfront costs and pay only for the electricity produced by the microgrid.
The proposed microgrid would include about 11,000 solar panels that could be located on about 350 acres that are either undeveloped or are golf courses. The plan is to use flow batteries, which do not involve lithium ion, said Smith.
The microgrid would serve residences and commercial buildings in the center of the town of Oakmont that house an ambulance service, grocery store, banks, post office, a church and some medical offices.
Cutting energy costs
Solar would significantly lower the cost of electricity for the residents, said Smith.
“I get $55 of electricity but have to pay another $150 for transmission fees and other items added to the bill. With solar, all you pay for is the interconnection fee, which is in the $12 to $20 range per month,” said Smith.
When the Oakmont seniors began looking into a microgrid, they had no idea what size microgrid they needed or what PG&E would allow. When they learned about CMEP, they realized acceptance into the program would help them achieve their goal more quickly, said Smith.
The community members, Smith said, have been talking to PG&E for years about creating a community microgrid and are thrilled they can move on to the next phases of the project, beginning with deciding how to pay for the microgrid.
“We thought if we could get into that program, it would give us some gravitas to identify some grant money or identify a company that could help us create the microgrid and do energy as a service,” said Smith.
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