California Public Utility Commission Issues New Rules to Promote Community Microgrid Deployment and Explicitly Includes Tribes

Background

On June 11, 2020, the California Public Utility Commission (CPUC) issued its "Decision Adopting Short-Term Actions to Accelerate Microgrid Deployment and Related Resiliency Solutions," D20-06-017, an initial decision under Track 1 of Rulemaking No. 19-09-009 to implement SB 1339 (2018). SB 1339 requires the CPUC to develop "standards, protocols, guidelines, methods, rates, and tariffs to support and reduce barriers to microgrid deployment statewide, while prioritizing system, public, and worker safety, and avoiding cost shifts between ratepayers." Id. Although not mentioned in the state legislation, tribal governments are explicitly included in the CPUC rulemaking.

This initial decision is designed to implement Track 1 of the rulemaking to require the regulated utilities—the investor-owned utilities (IOUs) Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison (SCE)—to develop and implement programs for the commercialization and deployment of microgrids and other resiliency projects as part of the state's concerted effort to respond to wildfire, other climate impacts, and natural disasters through community based resilient energy systems. Specifically, the IOUs must:

(a) Develop and implement standardized, pre-approved system designs for interconnection of resiliency projects that deliver energy services during grid outages;

(b) Develop and implement methods to increase simplicity and transparency of the processes by which the utilities inspect and approve a project; and

(c) Prioritize interconnection of resiliency projects for key locations, facilities, and/or customers.

In short, the initial rules cover three aspects of microgrid commercialization:

1. Interconnection of resiliency projects;
2. Modernize tariffs to monetize social resiliency benefits; and
3. Promote collaboration between IOUs and tribal and local governments, including outreach, technical assistance, funding, and implementation assistance for community-based microgrids.

Summary of the Rules

Interconnection of Microgrid and Other Resiliency Projects

The rules identify requirements to create a "pre-approved" standardized design template, to establish an inspection process, and to identify additional resources available for microgrid design and deployment. These requirements establish the overall tactics required to facilitate microgrid deployment.

Net Metering Tariffs

There are two changes for net metering tariffs related to distributed energy storage. One change now allows for importing power into the storage system before a known public safety power shut-off (PSPS) event. The second change removes the size limit—which is now 10 kW—for distributed energy storage.

Tribal and Local Government Collaboration

This requirement under the new rule seems designed to ensure that tribal and local governments are well-informed of the IOUs' efforts to comply with this rule, and implement microgrids and other resiliency projects. IOUs are required to collaborate in the following ways:

• Conduct semi-annual workshops at the county level with tribal and local governments that discuss transmission and distribution systems, investment and operational plans, incorporation of tribal and local government input, and collaborative planning sessions
• Involve tribal and local governments in planning and vetting utility actions that impact communities
• Educate tribal and local government leaders and staff on electrical and distribution system investment plans
• Assist tribal and local governments with crafting their own energy resiliency projects
• Develop and publish a Resiliency Project Engagement Guide for tribal and local governments that includes how to engage with utilities, best practices for successful implementation of microgrids and resiliency projects, and list of data requirements

Approval of IOU Proposals

As part of the rulemaking, PG&E and SDG&E submitted proposals to comply with these initial rules, which were approved in part. The two IOUs were instructed to submit final program design, which were due in 30 days.

PG&E, which has approximately 35 tribes in its service territory, submitted a proposal entitled, "Community Microgrid Enablement Program" (CMEP). PG&E's proposal includes:

• Technical and financial support for community-requested microgrids that are focused on serving multiple critical infrastructure facilities and/or are in high fire risk districts
  • Technical assistance will focus on project scoping and project design guidance
  • Critical infrastructure defined as public safety, health care, schools, water/wastewater systems, community, and senior centers
  • Financial support includes $60.75 million in matching funds
• Collaboration with tribal and local governments to refine plan and efforts
• Prioritize communities: vulnerable, low income, disadvantage, rural, and tribal
• Create dedicated staff for community outreach efforts

On August 17, 2020 PG&E submitted its "Advice Letter" to the CPUC to describe in more detail how it will implement its CMEP. It also describes future outreach to tribes and local governments, although no dates have been set.

Additional Proceedings

Since the June 11 decision was an initial one for Track 1, intended to implemented rules for short-term actions, the CPUC is continuing the rulemaking process. Track 2 is underway and will cover more technical aspects of the rulemaking, including:

• Microgrid service standards necessary to meet state and local permitting requirements
• Methods to reduce barriers for microgrid deployment without shifting costs between ratepayers
• Develop guidelines to determine what impact studies are necessary for microgrids to connect to the electrical corporation grid
• Develop separate rates and tariffs, that are just and reasonable, to support microgrids
• Examine the use of advanced metering infrastructure to enable electrical isolation as a viable resilience strategy and potentially adopt a pilot program.
• Determine if large NEM-paired storage should be required to be capable of islanding.
• Develop supplementary parameters for the local and tribal government’s separate, access-restricted portal
• Address policy questions related to local area distribution controllers, such as but not limited to third-party integration, operation, and control of a microgrid.
• Initiate activity to shape the transition from diesel generation to alternative, clean back-up power generation

An initial staff proposal was filed on July 23, and multiple comments have been submitted. Final comments are due August 28.

California tribal governments are encouraged to monitor the continuing regulatory actions, and, where appropriate, to provide comments for the record.

We are prepared to assist our tribal government and tribal enterprise clients in California with monitoring and participating in this important rulemaking proceeding and the various utility microgrid deployment activities. Please don’t hesitate to reach out to us if you have any further questions about this rulemaking. For more information on how this decision will affect you, contact your Quarles & Brady attorney or:

• Pilar M. Thomas: (520) 770-8744 / pilar.thomas@quarles.com