The California Public Utilities Commission (CPUC) has issued a new Proposed Decision in Phase 5 of the ongoing microgrid rulemaking proceeding (R.19-09-009). For five years the CPUC has been engaged in rulemaking proceedings to implement Senate Bill 1339’s mandate to reduce barriers for microgrid deployment without shifting costs to non-participating ratepayers. In previous proceedings the CPUC authorized limited deviations to utility tariff rules and a utility Microgrid Incentive Program (MIP) for projects in disadvantaged communities, tribes and low-income populations.
In the latest phase of the proceeding, the CPUC initially ordered the three large investor-owned utilities (IOUs) to file proposals for a multi-property microgrid tariff that is based on Pacific Gas and Electric Company’s existing “Community Microgrid Enablement Tariff,” and that conforms to statutory requirements and a list of “guiding principles” issued by the CPUC. Subsequently the CPUC also allowed industry participants and stakeholders to submit alternative microgrid tariff designs, which resulted in submission of six additional proposals for consideration.
The Proposed Decision rejects all of the third-party proposals in their entirety, finding that they “do not comply with our guiding principles, tariff requirements, and statutory obligations.” More specifically, the Proposed Decision rejects:
- The position of microgrid advocates that utility
tariff rules 18 and 19 already create exceptions to the statutory
prohibition in Public Utilities Code Section 218 against delivery of
energy “over the fence” using non-utility distribution lines, and that
additional targeted exceptions would help facilitate microgrid development
and operation. The Proposed Decision interprets Section 218 as requiring
utility control of electricity deliveries, and as prohibiting
“unregulated” third-party operations and business transactions between
microgrid operators and customers.
- The Proposed Decision disagrees with the position
of some proposing parties that Public Utilities Code Section 2870’s
definition of electric “microutilities” can be interpreted as allowing
microgrid operations without full-scale utility regulation by the CPUC.
- Proposals allowing contracting between third-party
microgrid operators and their customers, finding that they would violate
the CPUC’s obligation to oversee utility rate-setting and create a risk of
cost-shifting. The Proposed Decision also rejects compensation mechanisms
that would enable avoidance of non-bypassable charges and cost
responsibility surcharges.
- The Proposed Decision agrees with Cal Advocates
arguments that none of the stakeholder proposals align with the CPUC’s Environmental
& Social Justice Action Plan Goals, and finds that targeted disadvantaged
communities can “utilize the Joint IOUs’ multi-property microgrid tariff through the
MIP.”
Having rejected other alternatives, the Proposed Decision adopts a modified version of the IOUs’ proposed multi-property microgrid tariffs. Modifications include: requirements for the IOUs’ Microgrid Islanding Study, notice to community choice aggregators affected by an application for microgrid, reporting and monitoring, and clarification of interconnection voltage, export, metering, and other eligibility requirements.
Although acknowledging that no microgrid projects have been enabled to date under Decision 21-01-018, which previously allowed limited deviations to utility Rules 18 and 19, the Proposed Decision notes that this option “remains fully available and fully accessible to microgrid developers across all three service territories of the Joint IOUs.”
Comments on the Proposed Decision may be filed on or before October 7. Reply comments may be filed on or before October 14. The Proposed Decision is expected to be on the agenda for vote at the CPUC’s November 7 business meeting.
Contact: Lynn Haug or Ron Liebert
