The California Public Utilities Commission on July 2 opened a rulemaking to determine how to add vast amounts of distributed energy resources in the coming years to the state's electric grid.
The commission will try to prepare the grid to accommodate an incoming flood of battery storage equipment, customer-sited solar panels, demand-side management tools, and electric-vehicle infrastructure, among other DERs, the order instituting rulemaking says. California plans to add about 1,100 MW of battery storage capacity each year from now until 2030, a startling growth from the less than 100 MW of battery storage capacity that has been added each year over the past 10 years.
The commission will follow three tracks in the proceeding:
- Track 1: Identify long-term DER policy issues and develop a technical report on distribution operator roles and responsibilities. The commission plans to issue a proposed decision on Track 1 in the fourth quarter of 2024.
- Track 2: Develop a staff proposal that considers potential grid locations with enough existing capacity to support EV charging infrastructure and where EV batteries could provide grid resilience. The commission plans to issue a proposed decision on Track 2 in the second quarter of 2024.
- Track 3: Review potential grid-modernization investments, install additional smart inverters, and align general rate case filings with the infrastructure investments. The commission plans to issue a proposed decision on Track 3 in the fourth quarter of 2023.
Investor-owned utilities' roles in the state will evolve under a future with a high penetration of DERs, the rulemaking says. IOUs could see their overall rates of return diminish, prompting the commission to ask if the utilities should be incentivized to prepare for growing DER connections. The commission in the rulemaking also asked whether it should investigate ways to redefine IOUs' roles and responsibilities to accommodate a high-DER future grid, and how to ensure open access for DER providers and aggregators.
Additionally, the commission said that costly IOU wildfire mitigation plans have exacerbated social equity issues, making it harder for lower-income customers to invest in behind-the-meter equipment. The commission said it will try to align a high-DER future with the commission's environmental- and social-justice action plan.
Last year, the California Independent System Operator Board of Governors adopted a proposal to streamline the process for adding new DERs to the grid. The board also approved a rule to allow battery storage scheduling coordinators to submit an "end-of-hour state-of-charge" value with their bids into the real-time market. The value will be submitted as a minimum and maximum megawatt-hour quantity and will allow the ISO's market systems to dispatch storage resources as economically as possible, CAISO said (see CEM No. 1610).
The commission plans to hold a workshop on the new DER rulemaking in September.