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California PUC Issues Resolution on Grid Modernization

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SACRAMENTO, California, Feb. 7 -- The California Public Utilities Commission issued the following resolution (Case No. E-4982):

AGENDA ID: 17212

Resolution E-4982. Approval of Updates to Grid Modernization Classification Tables, pursuant to Decision (D.) 18-03-023.

PROPOSED OUTCOME:

* This Resolution approves Grid Modernization Classification Tables, with modifications, for PG&E, SCE and SDG&E.

* This Resolution requires PG&E and SDG&E to refile its Grid Modernization Classification Tables with references to their TY 2020 GRC and TY 2019 GRC, respectively.

SAFETY CONSIDERATIONS:

* Resolution establishes a framework for reviewing IOUs' General Rate Case Grid Modernization distribution requests for investments to ensure safety and reliability while integrating Distributed Energy Resources.

ESTIMATED COST:

* This Resolution entails no incremental costs.

By Pacific Gas and Electric Company Advice Letter 5300-E-Afiled on December 3, 2018, Southern California Edison Company Advice Letter 3807-Efiled on May 21, 2018 and 3807-E-A on November 20, 2018, and San Diego Gas & Electric Company Advice Letter 3229-E-Afiled on November 27, 2018

SUMMARY

On May 21, 2018, Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E)--collectively, the Investor-Owned Utilities (IOUs)--filed Advice Letters (ALs)5300-E, 3807-E, and 3229-E, respectively, proposing updates to the Grid Modernization (Grid Mod) Classification Tables in compliance with Ordering Paragraph (OP) 3of Decision (D.)18-03-023.In response a timely protest filed by the Public Advocate's Office of the Public Utilities Commission (CalPA) , PG&E filed AL 5300-E-A on December 3, 2018 date replacing AL 5300-E in its entirety, SCE filed AL 3807-E-A on November 20, 2018 replacing AL 3807-E in part, and SDG&E filed AL 3229-E-A on November 27, 2018 replacing AL 3229-E in its entirety.

This Resolution approves the three IOUs' ALs, with modifications, replacing the individual grid modernization classification table with a common table, included as Attachment A. PG&E and SDG&E are required to refile their Grid Mod Tables with references to their TY 2020 GRC and TY 2019 GRC, respectively. The common table includes two new technology categories that are within the scope of Grid Modernization: Microgrid interface and Utility-owned Storage. If PG&E has requested funds for either of these technology categories in their TY 2020 GRC, they shall submit errata testimony to include these requests within their Grid Modernization Plan. The IOUs are required to use the table in Attachment A for future GRCs, but may propose modifications to the table by a Tier 2 advice letter if necessary.

BACKGROUND

In the Distribution Resource Planning Rulemaking (R.)14-08-013, the Commission adopted the Grid Modernization Guidance for future General Rate Cases (GRCs), in order to identify distribution grid technologies and/or functions that are needed to enable greater penetration, integration, and value maximization of Distributed Energy Resources (DERs). We did so in accordance with Public Utilities Code Section (Pub. Util. Code *)769 b(4), which required the IOUs to "identify any additional utility spending necessary to integrate cost effective distributed resources into distribution planning consistent with the goal of yielding net benefits to ratepayers."

The Grid Modernization Guidance was adopted in D.18-03-023, which established a process for the development, review and approval of the IOU's Grid Modernization Plans within the IOUs' General Rate Cases. The decision set the submission requirements for the Grid Modernization Plans (GMP), and determined what types of distribution investments are within scope to be included in the GMPs.

D.18-03-023 adopted a classification framework "to build a common vocabulary around different grid modernization technologies, their use cases, and the types of issues they resolve in order to frame the decision-making questions that GRCs need to evaluate." The framework defined the scope of technologies that Grid Modernization Guidance applies to. The framework also guides how a GRC grid modernization request should be organized, such that the IOUs have a useful format for presenting information.

The Commission determined that "the grid modernization guidance developed herein shall apply to all proposed grid modernization expenditures that have any relationship with distributed energy resources integration as well as those that are primarily driven by safety and reliability." The Commission determined that this guidance shall apply to all types of grid modernization technologies listed in Appendix B.

The decision directed the IOUs to submit updates to the Grid Mod Tables (Appendices B and C of D.18-03-023) via Tier 2 Advice Letter within 60 days of the decision to identify which DER(s) each proposed grid modernization investment supports; whether the investments are system wide versus location-specific; and whether the investments are needed to accommodate non-locationally targeted DER growth versus and/or targeted DER deployment. We directed the IOUs to add grid sensors and remote-controlled switches in the classification tables. We determined in D.18-03-023 that if the IOUs find that changes to the classification system are necessary to more accurately reflect their General Rate Case (GRC) proposals, they may propose modifications via Tier 2 Advice Letter, with sufficient time to make adjustments to the GRC filing. Parties were permitted to recommend alternate modifications to the classification tables in their protests to any Advice Letter.

PG&E Advice Letter 5300-E-A

PG&E submitted AL 5300-Eon May 21, 2018 requesting approval of its updated Grid Mod Tables, which were included in the AL as Attachment A. PG&E filed Supplemental AL 5300-E-A on December 3, 2018 to replace AL 5300-E in its entirety. The supplemental advice letter was filed in response to the protest by the CalPA and subsequent discussions between CPUC's Energy Division staff, the CalPA and the IOUs, in order to better align the Grid Mod Tables across the IOUs. In compliance with OP 3 of D. 18-03-023, PG&E has updated the columns in the classification tables for 1) DERs that apply to each technology category, and 2) Non-locationally targeted DER growth v. Targeted DER Deployment; and added technologies and examples to the table and list of definitions that should be classified as Grid Modernization. Modifications in AL 5300-E-A primarily consist of reorganization of technology categories and edits to the glossary of definitions.

SCE Advice Letter 3807-E and Advice Letter 3807-E-A

SCE submitted AL 3807-Eon May 21, 2018 requesting approval of its updated Grid Mod Tables, which were included in the AL as Attachment A.SCE filed AL 3807-E-A on November 20, 2018 in response to CalPA's protest, which supplements Advice 3807-E in part, replacing Appendices B and C of AL 3807-E. SCE provided modifications to the organization of the original classification table and added references for clarity, and provided some edits to the grid modernization definitions in Appendix B. In AL 3807-E-A, SCE made additional updates to the classification tables to better align across the IOUs.

SDG&E Advice Letter 3229-E

On May 21, 2018, SDG&E submitted the Grid Mod Tables in AL 3229-E, with modifications to the tables that reclassified which technologies should be considered within scope of the Grid Modernization Guidance, as well as modifications to Appendix C, List of Potential System/Integration Challenges. SDG&E filed AL 3229-E-A on November 27, 2018 as a supplemental Advice Letter to replace the original AL 3229-E in its entirety. SDG&E's supplemental Advice Letter revised their proposed updates to the classification tables in collaboration with Energy Division, CalPA and the other IOUs, to reflect a table format that is consistent with those of the other IOUs.

While SDG&E's classification table includes the same technology categories as are included in the PG&E's and SCE's submitted tables, SDG&E states that they do not currently view several of the categories included in these tables as applicable to "Grid Modernization" and, therefore, will not include them in their "Grid Modernization" table filed in the GRC. SDG&E states that they have not yet developed a Grid Modernization Plan for their next GRC, and thus anticipate filing a Tier 2 Advice Letter proposing modifications to Appendices B and C prior to SDG&E's next GRC.

In their proposed update, SDG&E classifies the following technology categories of Grid Modernization Investments, as driven primarily by DERs, and provides the following examples:

* Data Sharing Portals: Data sharing portal (web interface)

* Interconnection Processing Tool: Customer facing application to support streamlining the interconnection process, improve distribution planning

* Grid Management Systems/Distributed Energy Management Systems (DERMS): DERMs, Advanced Distribution Management System (ADMS), integrated with outage management and energy management systems

* Volt/Var Optimization: Automated programmable capacity controls, integration with DMS and EMS and future integration with smart inverters

SDG&E classified the following technology categories as "Other Investments" that are "not Grid Modernization driven primarily by DER," and thus not subject the Grid Modernization Submission Requirements listed in Appendix A of D.18-03-023. The technology categories included the following examples:

* Long Term Planning Tools: Integrated Load and DER forecasting, solution analysis for capacity/reliability, solution analysis comparing DER to traditional upgrades, LoadSEER

* System Modeling Tool: Power Flow, Integration Capacity Analysis (ICA), Synergi

* Grid Connectivity Models: Base data layer for ICA, Load and DER forecasting, state estimation, Real Time Bulk Electric System (BES) management

* Grid Analytics Application: Asset management, sensing and measurement (data), improves quality of asset data to improve distribution planning inputs and operational decisions

* Substation Automation and Common Substation Platform (CSP): SCADA, coordinated distribution device control with DERs, protection, cybersecurity

* Intelligent Automated Switches: Remote Intelligent Switches, Augmented Remote Control Switches, Automated Automatic Reclosers

* Remote Fault Indicators: Wireless bi-directional fault indicators

* Field Area Network: Wireless radios, Routers

* Wide Area Network: Fiber optic and IP connectivity

NOTICE

Notice of PG&E AL 5300-E, AL 5300-E-A, SCE AL 3807-E and AL 3807-E-A, and SDG&E AL 3229-E-Awas made by publication in the Commission's Daily Calendar. The IOUs state that they served copies of the ALs to the interested parties on the GO-96-B and R.14-08-013 service lists.

PROTESTS

The California Public Advocates Office (CalPA) protested the IOUs' Advice Letters and Supplemental Advice Letters. CalPA states that while the IOUs ALs generally meet the explicit requirements of OP 3 of D.18-03-023,with the exception of SDG&E's modifications discussed below, CalPA proposes modifications to the classification tables as well as overall recommendations aimed at developing a common classification framework and definitions across all three IOUs. CalPA submitted a timely protest to PG&E AL 5300-E, SCE AL 3807-E, and SDG&E AL 3229-E on June 11, 2018, which lead to the supplemental advice letter filed by the three IOUs. CalPA filed a protest the IOU's Supplemental ALs on December 10, 2018, to which the IOUs filed replies to the protest on December 17, 2018.

CalPA submitted a timely protest in response to the supplemental advice letters, PG&E AL 5300-E-A, AL 3807-E-A, and SDG&E AL 3229-E-A on December 11, 2018.In their protests of the Supplemental ALs, CalPA made the following recommendations to apply to the three IOUs:

1. The Commission should adopt Attachments 1 and 2 of the Public Advocates Office's Original Protest(Original Protest) as the next iteration of the Tables;

2. Disposition of the ALs should clarify that common Grid Mod Tables and definitions do not force or constrain requests for specific investments in the Grid Modernization Plan (GMP) which are included in each IOU's General Rate Case (GRC) application, and that GMPs need only include Grid Mod Tables for each IOU's current GMP request;

3. Commission staff should facilitate a workshop to discuss potential modifications to the GridMod Tables to be scheduled in the second quarter of 2019; and

CalPA argues that a standardized classification framework would aid the CPUC and parties in their evaluation of the IOU's GRC Grid Mod Plan requests, and help ensure that accommodation for DERs, and enablement of DER benefits, do not vary based on a customer's service territory. The CalPA states that the Grid Mod Tables provided in the Supplemental ALs continue to provide a limited set of technologies based largely on SCE's TY 2018 GRC application, with minor updates to better align across IOUs, but they do not result in a common table or common set of definitions. The CalPA states that the IOUs also fail to include technologies requested in recent GRCs as DER related, and technologies added by the CalPA based on its simultaneous participation in the DRP proceeding and the GRC proceedings.

CalPA provided comments on specific technology categories included in each IOU's table, which were incorporated into CalPA's proposed edits to a consolidated classification table. CalPA provided specific recommendations to reorganize the classification tables, which included providing the following:

* additional columns for each IOU's GRC request with the sources of each technology category;

* a column to identify whether each technology category supportednon-locationally targeted DER growth and/or targeted DER deployment;

* columns to reference the original source of a proposed technology category and the party that proposed the technology category; and

* additional rows for other technologies proposed in GRCS and in other IOUs' ALs, and a row for alternatives to technologies. The rows potentially identify additional investments that should be considered within scope of the Grid Modernization Guidance to include:

o DER Head End: DER Communications/Control Interface

o Adaptive Protection Systems: Capability within Grid Management System (GMS), protection settings change in real time based on grid conditions

o Remote Controlled Voltage Control Devices: Load tap Changers (LTCs), Capacitor banks and voltage regulators with ability for VVO control via upgrade or replacement

o Primary Circuit Reinforcement: Installing new manual switches, upgrading sections of cable/ conductor, extending feeder lines to create new ties

o Secondary Circuit Upgrades: Smart transformers, VVO transformers, secondary conductor and service drop upgrades

o Distribution Circuit Protection Device Upgrade: Replace fuses with breakers; upgrade switch control systems to accommodate backflow

o Utility Owned Storage: Energy storage systems installed on the distribution systems to buffer DER output and load (PEV)

o Microgrid Switchgear: "Trayer" switches and other hardware and software which allow DER powered microgrids to operate in islanded mode

o Alternates to New Technology: Upgrades to existing systems, employee training, improved inventory control, increased O&M expense

In their protest to the Supplemental ALs, CalPA addressed concerns that the IOUs raised during informal discussions held in October 2018 with the CalPA and Energy Division. CalPA clarified that the IOUs would not be held responsible for including data regarding the Grid Mod requests from the other two IOUs in their GMPs. CalPA recommends that disposition of the ALs should explain that common Grid Mod Tables and definitions do not force or constrain an IOU to deploy particular technologies in their GMPs, and that GMPs need only include Grid Mod Tables for their current GMP request.

Finally, CalPA points out that each IOU added a column to indicate whether each technology supports non-locationally targeted versus targeted DER deployment as directed by D.18-03-023. However, each IOU indicated applicability to both types of DER growth for all technology categories, which essentially nullifies any value for this added column of data. CalPA agrees that none of the technology categories appears to apply exclusively to only one of these types of DER. Unless other parties or CPUC staff identify how this category adds value to the table, CalPA states that this column should be removed.

IOUs Replies to Protests of Supplemental Advice Letters

PG&E Response: PGE&E states that the CalPA acknowledges that PG&E's proposed Grid Mod Classification Tables provided in PG&E's original advice letter are already consistent with D.18-03-023.In response to the CalPA's recommendations to the original AL, PG&E has incorporated several updates into the updated Grid Mod Classification Tables submitted in PG&E AL 5300-E-A.PG&E clarified that the technology additions proposed by CalPA, are already included in the updated tables submitted in PG&E AL 5300-E-A, and notes where each of these technologies is included in the tables. PG&E notes one exception, they consider utility-owned storage to be categorized as a DER in and of itself.

SCE Response: SCE states that there are inherent differences among the IOUs' GRC applications and electric distribution systems, and that a single set of documents negates the reality that the IOUs have different service territories, different customers, different demand profiles and different needs at different times looking for the most optimal solutions that provide the best value. Responding to CalPA's assertion that a standardized classification document should not "force or restrain requests for specific investments in the Grid Modernization Plan included in the IOU's GRC,"SCE finds that CalPA's recommended appendices (which the GMP would be guided by) include technology categories that are unique to each IOU.

SDG&E Response: SDG&E posits that each IOU responds to distribution grid needs based on unique regional needs and the state of their distribution infrastructure. According to SDG&E, attempting to classify future investment requests relative to non-applicable past investments reflected in a common classification as proposed by CalPA would be both burdensome and unnecessary.

SDG&E disagrees with CalPA's recommendation to hold a workshop in the second quarter of 2019 to discuss new DER related Grid Modernization technologies, stating that the process for updating the Grid Modernization tables has already been established in D.18-03-023, OP 3. IOUs may propose modifications to the Classification Tables via Tier 2 Advice Letter, and parties may propose alternate modifications to the classification tables in their protests.

CalPA's IOU Specific Recommendations.

The complete text of the document may be found here: (http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M264/K656/264656988.docx).

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