California regulators propose framework to put a value on DERs

Dive Brief:

California Public Utilities Commission (CPUC) Commissioner Mike Florio has issued a proposed decision to reorganize the state’s planning and reimbursement practices for utility and third-party distributed energy resources (DERs).
The proposal, Decision Adopting an Expanded Scope, a Definition and a Goal for the Integration of Demand-Side Resources, is a plan to develop a comprehensive policy on DERs such as commercial and residential solar, energy storage, demand response, energy efficiency, and other distributed load serving assets used by utilities and grid operators. The Florio proposal labels these "integrated demand-side resources" (IDSR).
The Florio proposal advances the accomplishments of the commission’s Distribution Resource Plan (DRP) proceeding by using the information on IDSRs provided by the state’s investor-owned utilities to value DERs based on the grid’s need for them at the location where they are sited and to structure tariffs to reward developers for locating DERs where they are needed.

Dive Insight:

The Florio proposal is considered a significant step toward the creation of a DER marketplace in California. The first and only DER marketplace in the U.S. is currently being developed in New York state under the Reforming the Energy Vision (REV) docket.

The proposal calls for “a regulatory framework that enables customers to effectively and efficiently choose from an array of demand-side and distributed energy resources. The framework is based on the impact and interaction of such resources on the system as a whole, as well as on a customer’s energy usage.”

The goal of integrating the IDSRs is “to deploy distributed energy resources that provide optimal customer and system benefits, while enabling California to reach its climate objectives.” The law defines DERs as “distributed renewable generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies.”

The Florio proposal came out of the integrated demand-side management (IDSM) proceeding that was initiated by the commission in October 2014 to find ways to incorporate existing utility demand-response and energy-efficiency programs into broader policy goals. Its most important advance is that it incorporates non-utility-owned assets.