Dive Brief:

• Pacific Gas & Electric's (PG&E) plan to reserve 168 MW of temporary generation to have on hand for California's upcoming wildfire season has worried some clean energy advocates, who fear that the utility will turn to diesel to fill that need.
• PG&E views the temporary generation as an insurance policy in case it needs to power down sections of its system during high fire risk conditions. However, "the preferred outcome is that the insurance is unneeded," the company said in a letter to the California Public Utilities Commission (CPUC) earlier this month.
• But the California Environmental Justice Alliance (CEJA) and Sierra Club worry that the requested 168 MW will be entirely made up of diesel, a resource that PG&E turned to during the 2020 fire season as well. "This is an opportunity for both utilities and communities to build up their distributed energy resources, including local renewables and energy storage," said Katherine Ramsey, staff attorney with Sierra Club.

Dive Insight:

Utility reliance on diesel generation to power communities during wildfire-related power shut-offs has been an area of concern for regulators for a while now. PG&E deployed six such shut-offs last year and in January, Senior Vice President and Chief Risk Officer Sumeet Singh told regulators at a workshop on Monday.

Those outages affected 800,000 less customers as compared to similar events in 2019; while this was largely because of better and more granular weather forecasting capabilities, temporary generation, including microgrids, helped as well. 

The CPUC in January passed a decision creating a pathway for utilities to move toward cleaner generation during the wildfire season. While regulators allowed utilities to use diesel and other temporary generation during shut-offs in 2021, it required them to also outline their plans for deploying clean substation microgrids that could substantially reduce emissions from substation islanding during the 2022 fire season. 

In the request filed with the CPUC in early March, PG&E said that reserving temporary generation resources for substations in advance would be less risky than procuring generators in real time. Last year, the utility reserved 350 MW of temporary resources, which allowed it to provide power to around 12,600 customer accounts. This year, thanks to a combination of improved weather modeling and islanding abilities, among other developments, it has reduced its request to 168 MW. 

One reason the utility is wary of procuring temporary generation in real time is that catastrophes across the nation could restrict the availability of diesel and natural gas generators. One vendor, for instance, told the utility that the winter emergency conditions in and around Texas have created a tremendous demand outside California for backup generation units, utility spokesperson Paul Doherty said in an email. 

Doherty acknowledged that the utility could potentially end up reserving diesel generation, but "we intend to use renewable diesel to the extent it is available, as we did last year."

PG&E said that the only alternatives to diesel pitched for substations in its recent request for proposals were for natural gas and battery storage. The utility is currently evaluating the bids, and intends to submit a future advice letter with plans for at least one clean substation project. 

But in a protest filed with the CPUC last week, Sierra Club and CEJA said the utility had not adequately outlined its plans to create a clean microgrid project, as per the commission's decision.

"PG&E's advice letter is vague and inconsistent on whether the utility will pursue a temporary clean substation project in 2021," the groups said in their filing.

The CPUC's requirement for utilities to develop a plan for one clean substation project before moving forward with temporary generation was itself a low bar that PG&E has not met in its advice letter, Ramsey said. 

CEJA is concerned about the potential for diesel usage because PG&E relied on diesel last year, said Heather Lewis, a clinical supervising attorney with the Berkeley School of Law's Environmental Law Clinic. Lewis is representing CEJA in the proceeding.

"Diesel is actually very costly to human health and air quality, particularly in the communities that are sited nearest to the diesel generation," she added.

The groups also raised concerns that some bidders may not have been able to participate in PG&E's request for proposals because of the short turnaround. In one instance, according to CEJA, a potential clean energy bidder asked for a deadline extension, but was not allowed more time. 

"Given the truncated timeline and the rejected bid extension, it is not surprising that PG&E only received bids for fossil fuel technologies," their protest filing said. 

Responding to the protest, Doherty pushed back on the idea that PG&E had to provide specific details on possible clean substation projects, saying that this step would have substantially delayed its request to reserve the baseline need for generation. 

PG&E needs to reserve the decision on whether it can feasible implement a clean substation project for 2021 until after its pending request for proposals evaluations and negotiations are complete, Doherty added.