California Lawmakers Approve Bill to Bolster Microgrid Development, End Lengthy Wait

Sept. 5, 2018
California lawmakers gave a final okay late last week to a microgrid bill (SB 1339) to bolster microgrid developoment and streamline what at times is a lengthy wait to interconnect projects.

California lawmakers gave a final okay late last week to a microgrid bill (SB 1339), designed to boost microgrid development and streamline what at times is a lengthy wait to interconnect projects.

The Assembly approved the legislation in a 54-19 vote during the waning hours of the legislative session August 31. The Senate had passed the bill in a 29-8 vote in late May.

Sponsored by Sen. Henry Stern, a Democrat, the bill was born out of concern that California needs microgrids, but their development is stymied.

“Some customers have been successful in navigating the challenges, but many are just lined up at the door waiting for the energy regulators to clear the path.”

The Senate analysis of the bill says that customers show “great interest in the development of microgrids but also great frustration.” While the technology is ready, “the protocols and standards for interconnection are not. Some customers have been successful in navigating the challenges, but many are just lined up and the door waiting for the energy regulators to clear the path.”

SB 1339 now awaits the signature of Gov. Jerry Brown who has been a vocal supporter of microgrids and has installed one at his ranch.

California welcoming microgrids

“We believe that moving this legislative action forward will bring more predictability to the distributed generation and microgrid markets in California.”  Clark Wiedetz, Siemens

For microgrid developers and vendors, the legislation is another sign of a welcoming microgrid market in California.

“We believe that moving this legislative action forward will bring more predictability to the distributed generation and microgrid markets in California,” said Clark Wiedetz, microgrid director for Siemens Energy Management, which developed the Blue Lake Rancheria microgrid in Humboldt County, California. “The result will accelerate growth in the adoption of these technologies, which are important tools in achieving the state’s commitment to 100 percent carbon-free resources by 2045 as adopted by the Legislature in SB 100.”

SB 100, also passed last week by California lawmakers, requires that the state secure 100 percent of its electricity from clean sources by 2045.

The microgrid bill is the latest in a series of recent efforts by California to not only accelerate microgrid development in the state but also become an international leader in fostering the technology.

Join Microgrid Knowledge May 14-16 at Microgrid 2019: Shaping the New Grid in San Diego, California.

The California Energy Commission (CEC) this year began allotting about $50 million in grants to boost commercialization of microgrids, a followup to a $26.5 million grant offering in 2014 for microgrid demonstration projects. The CEC also this week issued a report featuring 26 case studies of microgrids from California, North America, and other countries that make innovative business cases and rely on government support for less than 50 percent of project costs.  In addition, the state is creating a microgrid roadmap to guide policy and regulation.

California’s support for microgrids is also a key reason Microgrid Knowledge chose the state as the site of Microgrid 2019.

Microgrid bill requirements

If signed into law, the microgrid bill will require that publicly owned electric utilities take action to support microgrids, such as creating separate electric rates and tariffs for those installed by utility customers.

The bill also requires a streamlining of interconnection standards and permitting to reduce cost barriers to microgrid development.

Other elements of the bill, as described in an August 31 Senate Analysis, include;

  • The formation of a working group to codify standards and protocols to meet utility and grid operator microgrid requirements
  • A rule that within 180 days of the first request from a customer or developer to establish a microgrid, utilities make available a process for interconnection
  • A prohibition on compensation for backup generation, if separate rates and tariffs are necessary, unless the generation is used as back-up generation for a healthcare facility
  • Language that makes clear nothing in the bill will discourage or prohibit the development or ownership of a microgrid by an investor-owned utility.
Supporters and opponents

Those named as supporters of the bill in the Senate analysis include: Advanced Energy Economy; Advanced Microgrid Solutions; Advanced Power and Energy Program; American Lung Association; California Solar & Storage Association; Capstone Turbine; Center for Sustainable Energy; Coalition for Clean Air; Enel; EnerNOC; Engie; EtaGen; Recurrent Energy; Rhombus; Solar Energy Industries Association; Sun Power; Sunrun; TechNet.

Supporters cited the value of microgrids in supplying power during natural disasters, such as California wildfires. They also pointed out that microgrids can help manage integration of renewable energy on the grid and help reduce greenhouse gas emissions, and increase the use of energy storage, electric vehicles and other distributed energy resources.

“With all these benefits, the state needs policies to make it easier to establish microgrids.”

“With all these benefits, the state needs policies to make it easier to establish microgrids. This bill does just that by simply streamlining the process for integrating microgrids into our electrical grid,” says the analysis quoting supporters.

Opposing SB 1339 were the state’s three investor-owned utilities: Pacific Gas and Electric, San Diego Gas and Electric (SDG&E) and Southern California Gas. SDG&E said that the bill was duplicative and could cause low and middle-income customers to subsidize costs for other customers who will benefit from the microgrid. The final bill said that any tariffs may not shift costs to non-microgrid customers.

The legislation calls for the California Public Utilities Commission to act on the requirements by Dec. 1, 2020 in consultation with the CEC and the California Independent System Operator.

Track news about the California microgrid bill. Subscribe to the free Microgrid Knowledge newsletter.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

Twitter: @ElisaWood

LinkedIn: Elisa Wood

Facebook:  Microgrids

Exploring the Potential of Community Microgrids Through Three Innovative Case Studies

April 8, 2024
Community microgrids represent a burgeoning solution to meet the energy needs of localized areas and regions. These microgrids are clusters of interconnected energy resources,...

MGK_MGControllersWPCover_2022-01-27_13-40-49

Microgrid Controllers: Rapid Relief for Today’s Dynamic Grid

This white paper explores six ways in which microgrid controllers can solve common challenges that the modern grid faces, including improving resiliency.