PG&E Gets Nod to Help Locals Build Community Microgrids in California

March 19, 2021
California approved a plan yesterday by PG&E to help local governments and tribes set up community microgrids to protect critical facilities during power outages.

The California Public Utilities Commission (CPUC) approved Pacific Gas and Electric’s (PG&E) plan for helping local governments and tribes set up community microgrids to protect critical facilities when there are widespread power outages.

PG&E’s Community Microgrid Enablement Program, approved March 18, grew out of the commission’s efforts to support the commercialization of microgrids, as required by a state law, SB 1339

Last summer, the commission directed California’s investor-owned utilities to speed up their microgrid plans in an effort to reduce the effects of power outages related to wildfires.

Through the community microgrid program, PG&E will help communities explore their options for microgrids covering multiple critical facilities, help guide applicants through the technical study process for approving microgrids and help them get the microgrids online. The program is set to run through next year.

Proposed projects must be in a high fire-threat zone deemed to be “elevated” or “extreme,” in an area that has been hit by planned power outages called public safety power shutoffs, or in an area highly prone to power outages.

The decision may open the door for more complex multicustomer microgrids in PG&E’s service territory, which are difficult for private developers to build because they cannot legally supply energy to customers if it requires crossing a utility right of way to reach an adjacent property — what’s known as the over-the-fence rule. (Some dispute the common interpretation of the law.) The commission loosened the restriction somewhat in January by allowing local government microgrids to serve critical customers on adjacent parcels.

The Redwood Coast Airport Microgrid is an example of a multicustomer microgrid already underway in PG&E’s territory. It is being built with a partnership that includes PG&E, the Schatz Energy Research Center and the County of Humboldt.

$27 million to prepare for community microgrids

In this week’s decision, the commission authorized PG&E to spend up to $27 million in matching funds this year, and, in 2022, to make distribution system upgrades needed to bring the community microgrids online. The program reserves $9 million a year for disadvantaged and vulnerable communities. Usually, the upgrade costs are paid entirely by the owner of the microgrid.

The commission also approved a pilot Community Microgrid Enablement Tariff, which governs the eligibility, engineering studies, development, and island and transitional operation of community microgrids.

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The tariff is likely to evolve, according to the decision. “The commission does not want the [program] or the [tariff] to cause unintended consequences that may unintentionally impair the compensation streams that may be necessary to foster commercial microgrid development.”

The commission rejected a call by Concentric Power to lift PG&E’s proposed 20-MW cap on a single microgrid. The commission directed PG&E to consider raising the cap when the utility evaluates its program. Concentric is building a 35-MW microgrid project in Gonzales.

Expands definition of critical facility

In a change from PG&E’s proposal, the CPUC agreed with stakeholders that the utility should expand its definition of “critical facility” to include things like food banks, grocery stores and pharmacies.

“I’m glad to see the PG&E Community Microgrid Enablement Program launch as it will provide the technical tools and some financial resources to local and tribal governments to create and invest in microgrids for critical facilities and vulnerable customers such as fire stations, schools and nursing homes,” CPUC Commissioner Genevieve Shiroma said.

PG&E has about 16 million customers across central and northern California.

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About the Author

Ethan Howland

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