| Work Detail |
The California Public Utilities Commission in the United States viewed Sunnovas application as an attempt to create a monopoly, while showing an affinity for microgrids run by investor-owned utilities.
A new proposal came to the California Public Utilities Commission (CPUC) last September when energy-as-a-service provider Sunnova Energy announced that it had applied to install a “micro-utility” in a new housing community.
The company aims to develop self-sufficient micro-enterprises by equipping new home communities with solar power and storage. Under the plan, new home construction communities are selected so that Sunnova can work closely with developers to design and deploy distributed solar microgrids backed by energy storage.
Connecting solar power, energy storage, and smart appliances, microgrids offer a number of benefits, including localized backup power and resiliency, isolation from volatile utility rates, and more efficient use of energy through the connection of what would otherwise be immobilized assets.
Sunnova filed a formal application for a certificate to build and operate microgrids under sections 2780 and 1001, respectively, of the California Public Utilities Code. Microgrids would have a limit of 2,000 connected homes.
In February, the Public Counsels Office (PAO) suggested to the CPUC that it reject the request.
A large coalition of industry advocates and environmentalists, called the Microgrid Resources Coalition (MRC), submitted a response to the PAOs suggested rejection. “We believe that the Proposed Decision, if adopted, would become the latest in a long series of decisions in which the Commission does the citizens of California a disservice by ignoring the contribution that distributed generation, and microgrids in particular, , they can do to solve the current crisis of insufficiency of the state network”.
This April, the CPUC went ahead with the rejection of Sunnovas application.
Unhappy with the result, Sunnova argued that there is not enough time for a standard-making process to approve microgrids.
“The fact is that we are rapidly approaching five years since the enactment of SB 1399 and not only has the widespread deployment of microgrids envisioned by the statute not materialized, but the Commission has not taken the necessary steps that would allow begin to materialize,” the Solar Energy Industries Association said in a filing with the CPUC.
Nutting said that, at this rate, the regulatory process could take as long as 2030. Solar power is required by law on new home construction in California, at a time when the state is in the grip of a housing crisis. This delay represents what Nutting considers a missed opportunity for Californians to have more affordable and reliable energy.
Monopoly
A CPUC representative contacted pv magazine to explain the rejection: “Sunnovas application sought to supply microgrid power as a monopoly utility. He was looking for significant changes in the way the State defines the functions and obligations of a public service. The Ombudsmans Office believes that changes of this magnitude are better addressed in a regulation rather than a single request."
Sunnova disputed the argument that it would be establishing a monopoly.
“It seems like a bit of a strange accusation to me,” said Meghan Nutting, Executive Vice President of Regulatory and Government Affairs, in an interview with pv magazine . “Californians must contract for service with a utility if they are on the territory of an investor-owned utility. This micro-profit app offers customers an alternative to monopoly.”
Whats more, on the same day Sunnovas application was denied, the CPUC approved a $200 million program for major investor-owned utilities to run their own microgrid programs.
“Its interesting because its actually a cost shift. Non-participating taxpayers will have to contribute to that 200 million dollars, which the public service companies will have to allocate to the construction of the microgrids. Then [investor-owned utilities] will receive a rate of return on the money they spend building them, causing another cost shift to non-participants,” Nutting said.
The cost shifting argument was at the heart of the justification for NEM 3.0, a regulation that slashed compensation fees for residential solar owners who export excess production to the grid. NEM 3.0 was supported by major investor-owned utilities Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric, and strongly opposed by the citizens of California, members of the solar industry, and the environmentalists. Despite the apparent cost shifting of the new utility microgrid program, the CPUC sided with the utility in the Sunnova microgrid filing.
Microgrids are a new concept of electrical network that recognizes the strong points of the input (solar energy), building the network in a decentralized and distributed way. This increases resilience in adverse conditions, reduces transmission bottlenecks and congestion costs, decreases land use or “energy sprawl”, reduces monopolistic control of power companies over a territory, and significantly reduces the need for increase transmission, relying solely on the local distribution network.
In its 2021 to 2022 transmission plan, the California Independent System Operator (CAISO) announced 23 transmission projects with an estimated cost of $2.9 billion. A significant portion of these costs could be avoided if California adopted a decentralized energy model.
Delays
Californias new home communities also experience interconnection delays from power companies, a process that can take months to years. According to Nutting, some Humboldt County developers have reported interconnection terms of up to ten years.
The problem is serious enough that California State Senator Scott Wiener has introduced Senate Bill 83, which would impose fines on utilities that fail to approve grid connection requests in a timely manner. . The law would require investor-owned utilities to complete interconnection within eight weeks after a building receives a “green tag,” meaning local officials have inspected the construction site and approved the project. to process the interconnection.
“Its totally unacceptable that completed projects are sitting there collecting dust because PG&E cant come together to turn on the power,” Wiener said. "We are in the middle of a housing crisis."
Undeterred
Despite the applications denial, Nutting said Sunnova remains “undaunted” in its commitment to boost distributed clean energy in California.
Although the rejection was not the outcome the company had hoped for, the CPUCs decision did have some positive aspects. First, it removed a previous regulation on microgrids that prohibited proposals like Sunnovas. It also removed a footnote that Sunnova did not qualify as a microutility. The decision also highlighted the strong support from the entire sector for the construction of microgrids in the state.
“In the face of this disappointing decision, we remain committed to developing innovative energy services and solutions that improve grid stability and provide affordable and reliable energy to California customers,” Nutting said. “As utility rates continue to rise and network instability worsens, the end user bears the brunt of the consequences, and the urgency of this reality is not lost on us. As we move from here, we will continue to work tirelessly on future applications to advocate for consumer choice and push for a more competitive energy market that puts the needs of the people first over the interests of monopolistic utilities.” |
