Distributed Energy Resources – California Caught In Its Own Regulatory Web

The California Public Utilities Commission (CPUC) has spent a great deal of time and effort to reach the very broad, generic, and long-term goal to:

deploy distributed energy resources that provide optimal customer and grid benefits, while enabling California to reach its climate objectives.

In fact, it took the CPUC nearly a full year to just come up with that very nebulous goal in a decision in September 2015.

Two different, but interconnected proceedings, are clearly focused on this goal.  The first (Rulemaking 14-08-013) is focused on more fully integrating distributed energy resources into the utilities’ distribution system planning, operations, and investment decisions.  The second (Rulemaking 14-10-003) is focused on establishing a framework to enable the offering of a wide portfolio of demand-modifying technologies best tailored to customers.  A host of other proceedings will also impact the ability of California to meet its goals for distributed energy resources.

The CPUC’s theory is that R.14-08-013 will focus on top-down changes (starting with the utilities) and R.14-10-003 will focus on bottom-up changes (starting with the customer/end user).  More specifically, R.14-08-013 will focus on determining what characteristics of distributed energy resources are needed and what value should be assigned to those characteristics.  R.14-10-003 will focus on how to source the resources that will provide those characteristics and create that value.

So what has happened so far?

The CPUC appears to be caught in its own regulatory web.

CPUC staff have held multiple cross-cutting workshops focused on issues like locational pricing analysis that are relevant to multiple proceedings.  These workshops require significant investments of time and resources by stakeholders, Administrative Law Judges, and CPUC Energy Division staff.

Yet, the CPUC has not yet taken concrete steps to implement its goals with respect to distributed energy resources.  Meanwhile, stakeholders are afraid that by failing to participate in this regulatory morass that they will miss out on the opportunity to give meaningful comment in order to help create a workable framework/marketplace for distributed energy resources and ensure that the characteristics of distributed energy resources are appropriately defined and valued.

At this point, it appears that CPUC staff and stakeholders are stretched too thinly to take the kind of incremental steps necessary to ensure that the hugely expensive and critically important infrastructure investments that will be made in the next few years (e.g., distribution grid improvements, electric vehicle charging stations, etc.) are done in such a manner that customers are ensured reliable power at the lowest-possible cost.  CPUC leadership needs to assert itself to steer the ship towards incremental, but meaningful progress, so that the huge efforts that have been underway at the CPUC for some time now are not lost.