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The Senate Energy , Utilities and Communications Committee has passed legislation advancing clean, local microgrids in areas that are facing worsening outages and wildfires. It also approved a measure that says utilities must continue to pay large businesses, such as manufacturers, miners and agricultural operations, that are able to reduce their use of electricity when demand is high, for what is known as demand response.

Last year, the committee approved nearly identical legislation but the two measures later failed to pass.

The Senate energy committee voted 13-0 to advance SB 833 by Sen. Bill Dodd (D-Napa) ) to enhance local resilience. It provides local governments grants and technical assistance on where best to site non-polluting microgrids to keep the power flowing during blackouts in the face of fire danger. The committee action took place on March 14.

The number of utility public safety shutoffs has soared, imposing “enormous costs,” on communities, Dodd told the committee. These include increased air pollution from the growing number of diesel-fueled backup systems at homes and businesses. Solar and battery microgrids are emissions-free and provide resilience by keeping power flowing to crucial local services, from fire to water supply, and to people who are dependent on powered medical devices. They also can store excess solar power and feed it back to the grid as the sun sets, Dodd noted.

John Kennedy, with the Rural Counties of California, said there were 600 outages in Pacific Gas & Electric territory last year, many lasting eight hours or more. A significant number occurred in the 39 counties his organization represents. . “We believe that SB 833 will help us improve energy reliability by helping local governments better understand how to develop solutions to meet our local needs,” he said.

Kurt Johnson, advanced community energy manager with the non-profit Climate Center, said the climate crisis is driving the need for “intensive collaboration between local governments and utilities for energy resilience,” to avoid installations of diesel backup systems. SB 833 would help bring local officials up to speed on clean microgrids and prime placements.

Johnson said the bill could help lead to “a world where clean energy providers can rapidly proceed with project development rather than having to navigate local politics and bureaucracy for each individual project,” and where disadvantaged communities have clean, reliable local power built first, not last.

This year, there is $25 million available to support local microgrid development from the Strategic Growth Council, a state cabinet-level committee. Next year, $75 million will be available, and the California Energy Commission will provide assistance on optimal locations for microgrids to agency staff at the local level.

Continuing industrial demand response

The Senate committee also approved, on a 12-0 vote, Dodd’s SB 839, which would mandate that Pacific Gas & Electric and Southern California Edison continue paying industrial, commercial and agriculture customers to reduce or change the time they consume energy to protect the local or state grid at times of high stress. The large users are allowed to switch to onsite diesel generators to lower their electricity consumed from the grid.

In August 2020, participants in this Base Interruptible Program provided 800 MW of load shedding and shifting to keep the grid from crashing. But that capacity represented only 80% of what they had committed, according to the bill analysis posted by the committee. This shortfall has been the focus of much debate, including whether it can be justified. The official record is not clear on whether penalties of $6,000 per MWh were imposed.

This Baseload Interruptible Program has declined to 805 MW of capacity from 1,800 large energy users. In 2021, the combined utilities spent nearly $83 million on payments, which comes out of residential and other ratepayer pockets.

SB 839 specifically prevents the California Public Utilities Commission from eliminating this program, particularly in light of the emergency program approved last year seeking to add up to 3,000 MW of combined new power and “negawatts”. The CPUC is now bringing homes into this Emergency Load Reduction Program at PG&E, Southern California Edison and San Diego Gas & Electric for the first time. Participants will be paid $2 per kilowatt-hour saved this summer. Low-income and disadvantaged homes automatically opt-in.

The Utility Reform Network opposes the bill because of its high costs; monthly bill credits of $100/kW a year to large energy users. Outside of the 2020 heatwave, BIP customers generally have been called to reduce load "very infrequently," said Marcel Hawiger, TURN staff attorney. In the preceding 10 years, they were called only twice: once in 2014 and once in 2017, he said.

If this demand response emergency program is used only “as a last resort,” Hawiger said, "it should probably pay customers much less or be replaced by other programs.”

The bill is sponsored by the California Large Energy Consumers Association.

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In other legislative news, a bill was introduced to allow community choice aggregators to access state funding for electric vehicle charging stations. AB 1814 by Assemblymember Tim Grayson (D-Concord) allows community energy to apply to the CPUC for transportation electrification funds, which is now limited to the investor-owned utilities although IOU and CCA customers pay for the program.

“We need all hands on deck to decarbonize transportation in California. CCAs must also be part of the solution,” said Beth Vaughan, executive director of the California Community Choice Association, the bill’s sponsor.