California’s Distributed Energy Future Part 2: DERs as Non-Wires Alternatives

(Note: this is part 2 of a 3 part blog)

As mentioned in Part 1 of this blog series on the CPUC’s High DER Proceeding, DERs (Distributed Energy Resources) have a variety of roles to play within the electric grid and the CPUC is looking to leverage these opportunities in the agency’s new “High DER Future” proceeding (R.21-06-017). A big role DERs can play that the Commission is looking to improve on, is providing an alternative to traditional infrastructure upgrades by supplying generation closer to where it is used. While distribution upgrades will still be needed in certain areas to prepare the grid for widespread building and vehicle electrification, DERs can provide a cost effective alternative to those upgrades in many instances. When DERs replace traditional grid infrastructure investments, they are called “non-wires alternatives” or NWAs. When DERs including customer-sited solar and storage can provide cost effective non-wires alternatives, they will lower rates for customers and speed up decarbonization.

In addition to ensuring community involvement within the Distribution Planning Process (DPP), ensuring that NWAs have a more prominent role in distribution planning will be an important goal in this proceeding. Currently, the only option for DERs to replace traditional distribution infrastructure investments occurs through the DIDF, the Distribution Investment Deferral Framework. DIDF is an ongoing annual process facilitated by the CPUC that identifies, reviews and selects opportunities for competitively sourced DERs to defer unneeded utility investments in the grid by allowing a more cost effective DER to compete to be in its place. In practice this could look like a third party company applying to install a solar and storage system in a location where new growth in demand is creating pressure on the system, instead of the utility building new distribution lines that create new costs for ratepayers. The DIDF process was established in the D.18-02-004 proceeding in 2017 but has been implemented since then with little success, proving to be a complicated and narrow process with the utilities selecting few NWA projects. The DIDF process needs major improvements not only to put NWAs on a level playing field with traditional utility distribution upgrades, but also to prioritize equity and be a more democratic process that results in actual NWAs on the ground in communities where they are wanted.

For both NWAs and traditional distribution investments, utilities should place a special focus on ESJ communities so that deployment of transportation electrification (TE), building electrification (BE) and distributed clean generation like solar and storage, can increase in these communities. Prioritizing ESJ communities in grid modernization will also prioritize the benefits that come with them, including reduced local air pollution and increased reliability and resiliency that communities need and want. If policymakers miss the mark here, ESJ communities are likely to continue to be left behind in the transition to electrification when in reality, those communities should be prioritized first due to past historical burdens. A recent University of Berkeley report titled Inequitable access to distributed energy resources due to grid infrastructure limits in California pointed this out, stating that “households in increasingly Black-identifying and disadvantaged census block groups have disproportionately less access to new solar photovoltaic capacity based on circuit hosting capacity” and “Grid capacity may also limit the amount of new load that can be added to residential distribution circuits through electrification programmes, EV adoption or increased air-conditioning demands.”

The CPUC has hired consulting firm Kevala to conduct an Electrification Impacts Study, which aims “to enable identification of distribution and transmission grid enhancements and changes necessary to support the [state’s] transportation and building electrification policy goals for 2035.” The study seeks to provide a data driven look at where and how widespread electrification is likely to drive distribution spending, and eventually (in Part 3) assessing how deploying varying levels of customer-sited solar and storage could reduce that spending. According to the draft research plan released on March 29th, the study will use an immense amount of granular data and California’s own policy scenarios for electrification from 2025-2035. While the results of this study have the potential to be very useful for quantifying the potential savings from NWAs as the state electrifies, without the complement of community insight and participation going forward in the DPP process, future distribution investments may repeat past historical harms of leaving behind those communities who have not had the resources to electrify. I’m hopeful that the study provides a clearer picture for the utilities, the CPUC, and advocates of which communities are most in need of grid enhancements in order to achieve electrification goals. We expect to see Part 1 results of the Electrification Study sometime in June, with a workshop following where stakeholders will be able to provide feedback.

Some questions I am hoping to dig into when it comes to grid infrastructure needs and planning and how to include DERs as an alternative are:

How can the CPUC and utilities better integrate community feedback on where distribution upgrades are needed and wanted in communities? How can the DIDF process be improved to allow for communities to plan ahead for electrification without necessarily needing to rely on expensive utility distribution upgrades?
How much can local solar and storage lower distribution costs associated with transportation and building electrification, while also providing local power and flexibility? For example, could electric vehicle fleets charged with solar and storage be deployed as NWAs?
How can we ensure that policymakers’ assumptions about electrification and DER deployment do not solely rely on historical data and experiences to predict where electrification will occur? ?

Providing pathways for rapid electrification and a grid that functions for everyone are not easy tasks, and listening to those on the ground who know where solutions are happening and needed most will be an important part of my work here. I’ll explore Vote Solar’s third set of goals for this proceeding in a future blog post.