by Jeff St. John
February 21, 2020

Back in September 2018, California passed Senate Bill 1339, giving the California Public Utilities Commission until December 2020 to create “standards, protocols, guidelines, methods, rates, and tariffs that serve to support and reduce barriers to microgrid deployment” — or, more specifically, a “customer-supported microgrid.” 

Fast-forward to a year and a half later, and the CPUC is embroiled in a debate over how it’s interpreting that law’s mandate — and whether its decision to focus first on mitigating the wildfire-prevention blackouts that have stricken the state since the law was passed may have taken it off course. 

In December, more than a year after SB 1339 was passed, the CPUC decided that it would prioritize Track 1 of its microgrid proceeding on short-term efforts that could get microgrids or other “resiliency strategies” deployed by the summer of 2020, if not before then. It also decided to postpone fulfilling the rest of the law’s mandates, including new regulations and tariffs for customer-owned microgrids, until Tracks 2 and 3. 

The Track 1 high-priority items include streamlining existing interconnection rules and tariffs to allow resiliency projects to be deployed more quickly as well as helping local governments access utility infrastructure and data to develop projects. But it also includes a request for the state’s three investor-owned utilities to propose plans for “immediate implementation of resiliency strategies” — including their own microgrids. 

While SB 1339 doesn’t prohibit utility-owned microgrids, it isn’t focused on enabling them either, but rather on giving utility customers the tools and tariffs to build and run their own. And while it doesn’t prohibit all fossil-fueled generators as part of a proposed microgrid, it does specify that the microgrid tariffs developed under the law should not pay customers for using them, unless they comply with strict state air quality and safety codes. 

That’s why so many stakeholders in the microgrid proceeding are upset with Pacific Gas & Electric’s microgrid plan, which asks the CPUC to approve $317 million investment in preparing up to 10 of its distribution substations that can be backed up by on-site generators. But it also conceded that to make this summer’s deadline, it would almost certainly have to rely on diesel or natural-gas-fired generators instead of cleaner alternatives, such as batteries charged with solar power.