Distributed Energy Resources

California PUC launches microgrid rulemaking

The California Public Utilities Commission has started a process to create a policy framework for commercializing microgrids.

The rulemaking, approved last month, grew out a bill that requires the PUC to develop standards, protocols, guidelines, rates and tariffs that support microgrid development while avoiding shifting costs between ratepayers.

A microgrid is a system of loads and energy resources that can act as a single entity and run disconnected from the grid, according to the bill.

The PUC said the bill found that microgrids – as a distributed energy resource – may help electricity customers ensure their own level of reliability, may help electricity customers manage their needs better, act as an aggregated single entity to the distribution system operator, and may support California’s policies to integrate a high concentration of distributed energy resources on the electric grid.

The rulemaking process may involve broader state policy goals such as reducing greenhouse gas emissions and protecting health and safety during catastrophic events like wildfires, according to the PUC.

The PUC may consider launching pilot microgrid programs to benefit communities most likely to be affected by public safety power shutoffs, according to a scoping memo from the commission.

The PUC said it aims to develop microgrid service standards that meet state and local permitting requirements.

The PUC also plans to come up with ways to reduce barriers for microgrid deployment, without shifting costs between ratepayers, the commission said.

The agency intends to draft guidelines outlining what impact studies are needed for microgrids to connect to the grid.

The commission plans to develop microgrid rates and tariffs, the agency said, noting the tariffs won’t cover the use of backup diesel or natural gas-fired generators.

The PUC said it expects to develop a standard for direct current metering to streamline the interconnection process and lower interconnection costs for direct current microgrid applications, including net metering paired with storage systems and microgrids.

None of the new rules will hinder utilities from owning or operating microgrids, according to the PUC.

The PUC expects it will issue a proposed microgrid decision in late 2020.

The PUC will work with the California Energy Commission and the California Independent System Operator to develop the microgrid policy framework.