Last year the California Legislature passed SB 1339, authorizing the development of new policies and programs aimed at commercializing microgrids. Today, the CPUC took the first step in that process by approving a new Order Instituting Rulemaking to develop standards, protocols, guidelines, methods, rates, and tariffs to support and remove barriers to microgrid deployment while prioritizing system, public and worker safety, and avoiding shifting costs between ratepayers.
Microgrids are interconnected systems of loads and energy resources (such as on-site generation, storage devices, and demand response tools) that are sized to meet customer needs within a defined electrical area. A microgrid can function as a single, controllable entity that runs in parallel with the grid, or as an isolated electrical system during emergencies, such as when a natural disaster disables grid operations. Microgrids can help large customers ensure reliability, manage energy procurement and operations, and enable cost-effective aggregation of clean energy resources.
While the potential benefits of microgrids are widely acknowledged, commercial activity in this area is still nascent because incentive programs focus on individual resources, and because planning, development, construction, and interconnection rules were not designed with microgrids in mind. The new CPUC rulemaking will aim to identify and address these barriers and encourage more widespread investment in and deployment of microgrids in California. Activities will include:
Opening comments on the Order Instituting Rulemaking are due 30 days from issuance. The CPUC anticipates further proceedings in 2019-20, and issuance of a proposed decision in the fourth quarter of 2020.
For more information on this or other regulatory and legislative activities affecting microgrids and distributed energy resources, contact ESHD attorneys Ron Liebert or Lynn Haug.
