The California Public Utilities Commission launched a rulemaking July 14 to increase the amount of customer-owned distributed energy that will be sent to the grid to help balance supply and demand by making real time electricity prices available to the customer and third-party aggregators. The aim is to have residential rooftop solar, small battery systems, electric vehicles, grid-connected thermostats and smart inverters play a significant role in the state’s evolving power system.
“We hope to see more opportunities for residences to better respond to grid conditions,” unlocking the “huge potential for grid reliability,” said CPUC President Alice Reynolds. That would make utility bills more affordable, reduce the curtailments of renewable resources and decrease greenhouse gas emissions, “taking us further on the path toward meeting our ambitious climate goals,” she added.
The rulemaking offers “a powerful vision and is an important step to harness demand flexibility,” said Commissioner Darcie Houck.
The rulemaking will aim to significantly increase consumers’ role in the operation of the state’s grid by reducing or shifting their electricity use during peak periods in response to a price signal or other incentive.
The approved order instituting the rulemaking notes the “critical role of demand response in ensuring system reliability, especially during severe weather events, as California’s electric system continues to integrate greater amounts of renewable generation and energy storage.” It acknowledges the state’s “piecemeal approach to load management,” which likely hinders the growth of demand flexibility.
The new proceeding will consider revising rate designs and fixed charges, as well as guidance principles for demand flexibility. It will also seek to streamline the patchwork of niche rates and demand-side programs to expand the use of demand flexibility beyond early adopters, according to the CPUC.
The Commission’s proposed approach to demand flexibility via its so-called California Flexible Unified Signal for Energy, or CalFUSE, rolls in facets of load management entailed in numerous CPUC and California Energy Commission proceedings, and Lawrence Berkeley National Laboratory research. CalFUSE includes six key policy elements that will be available on an opt-in basis, according to a June 22 CPUC Energy Division White Paper.
Commissioner Cliff Rechtschaffen, who was less than enamored with the program’s wonky name, CalFUSE, applauded the newly launched rulemaking for being the first one “to integrate the entire demand side of EV charging.” That is a big deal because California expects to have 8 million electric cars on its roads by 2030 and 200,000 medium and heavy-duty electric trucks by 2035, which will create a huge electric load on the grid.
The staff’s related Demand Flexibility White Paper, which delves into the future of distributed energy resources in California’s power system, will be presented at a July 21, 2022, workshop.