25 Stakeholders Press California to Move Ahead with Microgrid Tariffs

Sept. 15, 2020
Besieged by wildfires and power outages, what should California do now? 25 stakeholders pointed the way today calling for regulators to approve microgrid tariffs to get more microgrids built soon.

Twenty-five parties today urged California regulators to finalize microgrid tariffs by January, underscoring the need to incentivize the technology in a state now characterized by wildfires, blackouts and safety power shutoffs.

In a filing submitted by the Microgrid Resources Coalition (MRC), the stakeholders asked the public utilities commission to finalize and implement a microgrid tariff for single-customer microgrids by January and develop a tariff for multi-customer microgrids in the first half of 2021. (Rulemaking 19-09-009)

Microgrid advocates are pushing for tariffs that compensate microgrids for the range of services they provide, including resilience, resource adequacy, generation, storage, and load management.

“…prepare for a decade or more of disruptions of equal or even greater severity.”

The group filing sprang from a meeting September 9 with commission staff that was organized by two consultants working with the stakeholders, Allie Detrio and Lorenzo Kristov. In a letter also filed today with the commission, they described the urgent need “to proliferate microgrids and other local energy resources across California.”

“The dramatic unanticipated events of 2020 — an ongoing global pandemic, followed by dry lightning storms igniting the largest wildfires in California history, all coming on the heels of widespread PSPS [public safety power shutoffs] and the devastating wildfires of 2017-19 — require the commission and other California policy makers to prepare for a decade or more of disruptions of equal or even greater severity,” said the letter.

What to include in microgrid tariffs

The letter describes microgrid tariffs as a way to define the new relationship created between utilities and those that develop and use microgrids. It specifies roles so that each can be a “good citizen” of the utility distribution system and compete on a level playing field under non-discriminatory rules.

Several parties to the MRC filing added quotes with their variations on what should be inclued in the microgrid tariffs. 

  • Grid Alternatives, a non-profit that provides solar for underserved communities, recommended a sub-tariff for disadvantaged and low-income communities.
  • Enel X North America, a technology provider, pushed for a standardized tariff for microgrid interconnection, dispatch and compensation.
  • The Local Government Sustainable Energy Coalition advised that the commission avoid tariff provisions that will discourage local governments from installing clean microgrids.
  • 350 Bay Area, a climate advocacy group, warned that the cooperation between utilities and local communities is needed for a tariff to work.
  • California Alliance for Community Energy said that the tariff structure should create fair value for resilience and clarify participant roles, especially that of the utilities.
  • Green Hydrogen Coalition, a non-profit, described green hydrogen as a game changer to combat climate change and said a tariff would support its scale up in microgrids.

The push for microgrid tariffs comes as the commission works on finding ways to comply with a state law (SB 1339) to support commercialization of microgrids. The proceeding is now in its second phase. The first track finished up in June with the commission enacting a number of short-term modifications required of utilities, including steps to expedite microgrid applications and approvals.

The second track is focusing on more complex topics, including  rates and tariffs to support microgrids. The commission also floated a proposal in July that would have utilities building as many as 15 pilot microgrids.

The bygone era of utility pilots?

The proceeding has drawn input from a range of players, including large businesses in the state, such as Google, which plans to build microgrids.

Google is among stakeholders that has separately urged the commission to move more quickly and focus less on utility pilot projects, which they say are unnecessary because microgrid technology already has proven itself in the marketplace.

In a letter last month to the commission, California State Sen. Henry Stern, sponsor of SB 1339, also expressed need to pick up the pace on microgrids. He was particularly critical of the state’s current reliance on diesel generators to ward off power outages after utilities abandoned plans to build clean energy microgrids this year because of the cost and tight time frame.

“It appears the commission may be focusing too much energy providing direction to electrical corporations to utilize temporary diesel back-up generators and creating large scale microgrid pilot programs with limitations, instead of prioritizing the wider deployment of microgrids with new rates and tariffs,” he said.

Stern also called for the commission to consider waiving certain nonbypassable charges and standby fees for microgrids. Microgrid advocates say the fees are outdated and create an unnecessary regulatory burden on microgrids. 

Who’s in?

The 25 stakeholders that signed on to today’s filing were: Microgrid Resources Coalition, The Climate Center, Peninsula Clean Energy, Marin Clean Energy, Sonoma Clean Power, East Bay Community Energy, 350 Bay Area, Local Government Sustainable Energy Coalition, GRID Alternatives, California Efficiency & Demand Management Council, Bioenergy Association of California, California Energy Storage Alliance, California Solar & Storage Association, National Fuel Cell Research Center, Solar Energy Industries Association, Clean Coalition, Green Hydrogen Coalition, ENGIE, Enel North America.

Interested organizations that are not parties to the proceeding include: California Alliance for Community Energy, Resilience Plus, Indivisible Green Team California, Reimagine Power, Lorenzo Kristov, Chuck Roselle.

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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.

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