Golden Gate by Night

MCE is concerned about PG&E's plan to build "resiliency microgrids" in MCE's service area and procure power for MCE customers during power shut-offs.

Power shut-offs in California have resulted in a new point of contention between Pacific Gas & Electric and community choice aggregators: Who should be allowed to purchase electricity for CCA customers during shut-offs?

MCE, the state's oldest operating CCA, said it has a number of "significant concerns" regarding PG&E's plans to procure generation resources—including new natural gas generation sources—during a public-safety power shut-off or other outage, and also the investor-owned utility's plan to build microgrids in the CCA's service area.

According to MCE, PG&E said it plans to build microgrids at 20 substations that have been subject to PSPS outages. The IOU requested a total of 522 MW of new generation capacity in order to meet each substation's load in "islanded mode" for a minimum of four days. Of the 20 substations, seven would be in MCE's service area, totaling about 254 MW of new generation capacity for its customers during a shut-off or other outage.

The CPUC opened the microgrid rulemaking in September, saying it expects to expedite certain microgrid and resiliency strategies to support reliability in anticipation of potential outage events and wildfires [R19-09-009].

MCE said it strongly supports accelerated efforts to reduce the scope and impact of PG&E's PSPS events, but believes the utility's plan does not adopt a collaborative approach between PG&E and the CCAs in its territory. Instead, PG&E would "unilaterally install over 400 MW of new PG&E-owned or contracted generation facilities in CCA service area . . . providing thousands or tens of thousands of CCA customers with generation service during PSPS and other outage events without CCA involvement or consent," MCE CEO Dawn Weisz wrote in a Jan. 7 letter to PG&E Vice President Fong Wan.

"The CCAs and PG&E must pursue resiliency improvements in a collaborative manner that fully respects both PG&E's role as the distribution and transmission service provider and the CCAs' role as their customers' exclusive generation service provider," Weisz said in the letter.

The Public Utilities Code states that CCAs are the exclusive generation service provider for their customers, according to Weisz. PG&E does not have the right or the authority to provide generation service to CCA customers, regardless of whether the distribution grid is islanded.

"The current PSPS situation is a crisis of PG&E's own making, and the CCAs will not allow PG&E to use this crisis as an excuse to violate the statutory rights of CCAs and their customers," Weisz wrote.

Weisz said that MCE has four primary concerns with PG&E's proposal:

  • Violation of statutes establishing CCAs' sole responsibility for generation services for their customers.
  • Cost implications of new generation resources in highly populated areas, as well as significant cost-recovery and cost-allocation concerns for resources that may become redundant in a few years.
  • Environmental and state policy concerns about expanding natural gas usage.
  • Conflicts of interest, perverse incentives, and opportunity for manipulation inherent in allowing the same company to: initiate PSPS events and determine their duration and extent; own and profit off of the generation resources used to serve CCA customers during PSPS outages; and displace CCA generation with PG&E-owned generation whenever PG&E decides to call a PSPS event, thus disrupting CCA operations and reducing CCA revenues.

MCE asked PG&E to revise its request for offers and remove all requests for generation that would be connected to substations in MCE's service area.

PG&E did not respond to a request for comment in time for publication.

The first administrative law judge ruling on the matter, along with a CPUC staff proposal, is expected on Jan. 21.

Staff Writer

David Krause is an energy reporter covering the California Energy Commission and Air Resources Board. He writes about transportation, climate change, utilities, and wildfires. He has an MFA in Writing, an MA in English, and a BS in Civil Engineering.