Filipp Franke Quijada, 2L
[1] The year 2022 was one of the hottest on record in California, creating a historic demand for electricity. California’s electrical grid was pushed to the edge of its capacity. The crisis also illustrated how microgrids could help make the current electrical grid more resilient — supplementing energy production through the use of distributed energy resources. In 2018, the California state Legislature passed Senate Bill 1339 to facilitate the commercial development of microgrids. However, five years later, regulatory barriers to implementation persist. California’s legislature must pivot its approach to address these barriers head-on to facilitate the implementation of microgrids.
[2] Extreme weather events fueled by global climate change, like the 2022 heatwave, put immense stress on the already strained electrical grid. When extreme weather events occur, electricity demand increases in parallel because of the use of air conditioners and other household appliances. However, when demand outstrips supply generated by the grid, blackouts occur.
Since the turn of the last century, we have depended on the traditional electrical grid to supply our electricity demand. Rigid and linear, the traditional electrical grid uses centralized facilities coupled with a defused network of transmission lines and distribution centers to deliver electricity to consumers. However, this modality is not resilient. It cannot quickly recover from emergencies or disasters and thus leaves consumers without electricity when needed most. As the frequency of extreme weather events continues to increase, it is clear that the electrical grid, a relic of 20th-century technology, is under-equipped to deal with 21st-century issues.
[3] Microgrids are a relatively new implementation of distributed energy resource technology that can help bring the electrical grid into the 21st century. As its name implies, a microgrid, at its most basic level, is a smaller electrical grid. Contrary to the traditional grid, a microgrid’s generation, transmission, and distribution infrastructure is highly localized to a single parcel, but can be scaled to service a campus or community. Crucially, a microgrid can “island” or, in other words, independently provide power to its users and run in parallel to the traditional grid. Notably, a microgrid’s ability to self-generate energy while “islanding” allows the entity serviced to continue to operate when the larger grid has been shut down. This ability to keep the lights on during a blackout improves resiliency. Naturally, greater implementation of microgrids helps to mitigate demand and subsequently eases stress on the grid.
[4] In an effort to improve resiliency and modernize California’s electrical grid, the state Legislature passed Senate Bill 1339. The legislation directed the CPUC to pursue policy actions, including the development of rates, tariffs, and rules necessary to remove barriers limiting the deployment of microgrids without shifting costs onto non-benefiting customers. This multi-track proceeding has yet to be completed. Currently on Track 4 of a total of 5 Tracks, stakeholders, including each of the state Utility Companies and the CPUC are developing a microgrid tariff.
[5] As a whole, SB 1339 has improved the deployment of microgrids. However, the “over-the-fence” rule has proven to be an immovable barrier that has hamstrung the greater development of microgrids within the state. Section 218 of the California Utilities Code, known as the “over-the-fence” rule, limits the distribution or sale of self-generated energy to only adjacent parcels and outright bars electricity transmission across public streets. Any entity that violates the over-the-fence rule is then subject to public utility regulation. In most cases, the regulations imposed are an administrative and financial burden prohibitive to the development of commercial microgrids. Additionally, policy measures implemented through SB 1339, must conform to and may not circumvent or modify the “over-the-fence” rule since it’s codified in state law. Thus, the solution to the issue is clear – If microgrids are to be deployed in greater volume in the future, the state legislature must first address the “over-the-fence” rule.