Can tariffs, instead of utility contracts, bring out enough distributed energy resources to defer grid investment needs? California is now looking over a host of proposed experiments aimed at answering that question.
Over the past six years, California has been on a slow march toward integrating distributed energy resources like rooftop solar, behind-the-meter batteries, or grid-responsive loads into its utility power grids. The effort began in 2014, when the California Public Utilities Commission launched its Distribution Resources Plan and Integration of Distributed Energy Resources proceedings, and guided Southern California Edison’s groundbreaking procurement of more than 100 megawatts of DERs to help replace the loss of the San Onofre nuclear power plant.
Since then, we’ve covered the spread of DERs as alternatives to building new power plants or investing in grid infrastructure, as well as progress in California’s own version of a non-wires alternative process for its three big investor-owned utilities, the Distribution Investment Deferral Framework and Distribution Deferral Opportunity Reports, which culminated in SCE and Pacific Gas & Electric opening first-of-their-kind bids last month seeking DERs as grid replacements.
While these DER-grid integration efforts have come out of different tracks of California energy policy, they’re all being done through the traditional utility approach of defining a big project through requests for offers and requests for proposals, putting the project out for vendors to submit competing bids, and then selecting a winner to sign the contract and carry out the work.
But for the past year, the CPUC and participants in California’s DER-grid integration efforts have been working on an alternative approach to solving this problem — creating tariffs to drive the investment in DERs that can meet grid needs.