DEMANDSIDE TECHNOLOGIES & NON-GENERATION METHODS

Distributed Energy Resources (DER) are integrated, decentralized energy technologies and systems that can displace the need to use fossil and/or remote energy sources, and potentially increase economic opportunities in communities. Some DERs generate and store clean energy locally, others reduce the demand for energy, or manage demand peaks, Others can make the energy supply more resilient.

In this section we introduce technologies and programs that are considered DERs but do not directly involve the generation of electricity. They are non-generation demand-side technologies or programs that enable GHG reductions, reduce costs, improve efficiency, reduce or shift demand, and/or increase resilience.

Initially we’ve focused on electric vehicles (EVs) and other programs that most CCAs are pursuing first (incentives, rate structures, energy efficiency). But as CCAs become more established and technologies mature, we can expect innovation around building electrification, demand-response, storage, and micro-grids, as well as integrated data platforms.

In each sub-section below, you’ll find information in the following general categories.

  • Overview
  • Relevance for CCAs
  • Opportunities for Action
  • Resources and Partners

In addition, please follow this link to the DER Projects Clearinghouse where you can learn about specific projects or programs that CCAs are implementing using each of these methods. Search and filter by CCA, technology, goals, location, etc., see summary project information, and most importantly, who to contact for more information to accelerate your own efforts.

Electric Vehicles

ELECTRIC VEHICLES AND COMMUNITY CHOICE ENERGY

Overview

Practical and affordable passenger electric vehicles (EVs) are proliferating rapidly and electric versions of heavy duty trucks and buses are also rapidly becoming available. As of early 2019 over 1 million EVs are on U.S. roads, with over half of those in California. EV ownership is projected to increase exponentially as batteries continue to improve and prices fall, bringing ever more options of affordable, long-range EVs into the mainstream.

Electric Vehicle

Volvo and other car makers have already stated their intention to phase out gas power in all new models starting as early as 2019, and sixteen countries have taken varying types of action to phase out internal combustion engine (ICE) vehicles and increase the number of EVs.

Reducing greenhouse gas (GHG) emissions from transportation is a powerful opportunity that must be leveraged in order to respond to climate change at the necessary speed and scale. The potential scale and reach of electric vehicles can be vast, including cars owned or leased for personal mobility, ride sharing services, and also city or company fleets of cars, buses and trucks.

Relevance for CCAs + DER Deployment

If you are an elected leader or local government official considering establishing a Community Choice agency, or are on the governing board or staff of an emerging CCA, consider “baking in” some early programs to support EVs. If you are on the governing board or staff of an operational agency that has not yet initiated any EV programs, keep reading! There are many reasons, some obvious and some subtle, as to why CCAs and EVs are a great match.

1. EVs use electricity, and Community Choice Agencies (CCAs) sell electricity. Therefore, the more EVs are on the road and charging locally, the more power the CCA will sell, strengthening its financial sustainability. EVs also store energy. This can be a critically important tool for CCAs as they seek to manage their load shape (more on this in #4 below).

2. In most communities, transportation emissions are the #1 source of pollution and GHG emissions. If the mission of a CCA includes reducing emissions, then tackling transportation is essential. EVs are the fastest and least disruptive way to get the gasoline and diesel out of our transportation sector.

3. The quickest path to reducing fossil fuel combustion is to electrify everything from home heating to transportation, and use renewable energy for electricity generation. As the grid gets cleaner, which it is doing at a steady pace, all electrical devices,
including cars, get cleaner. By contrast, no matter how fuel-efficient an internal combustion vehicle is, it will continue to emit a consistent amount of GHGs per mile traveled until it is replaced, usually 10 or more years in the future.

4. EVs offer a potential solution to the growing abundance of solar power available in mid-day. This power bulge, referred to as the “duck curve,” which also includes a steep rise in demand as the sun goes down and folks switch on power in the early evening, is a consequence of increased reliance on intermittent sources of energy that cannot be as conveniently timed with demand as a gas-fired power plant. Special EV rates and programs to incentivize daytime and/or workplace charging are on the way. Right now, smart chargers are available that can be programmed to begin charging only after that evening ramp is over and there is once again plenty of power from night-time wind to charge up the EVs. Eventually, electric vehicles, together with stationary battery storage, can serve as massive battery banks that can absorb excess energy when it is available, and release it back to the grid when needed. This technology is referred to as vehicle to grid (V2G) and in California, Vehicle-Grid Integration (VGI).

5. CCAs are well positioned to help broaden EV access to community members of all economic levels. EVs should not be seen as a luxury available only to the wealthy. It is well-established that the lifetime cost of owning an EV is lower than the cost of owning a conventional gas-powered car. However, barriers exist to access or ownership that CCAs can help break through. These barriers include the initial purchase price or lease cost, and the fact that many low-income customers live in multi-family dwellings where installing a home charging station is not feasible. CCAs can offer and earmark additional subsidies for qualified low-income customers. They can also work with multifamily residential property-owners to making EV charging available, and/or develop programs to make workplace charging more common. And lastly, adoption of EVs does not necessarily mean ownership. Car-sharing programs and services are on the rise and EV car sharing may be a way for more folks, including low-income, to be able to switch to EVs. There is nothing stopping CCAs from collaborating on such a program.

Opportunities for Action to boost EV adoption

Please use the DER Projects Clearinghouse to search for and learn about specific EV-related projects and programs implemented by California’s CCAs

Most of California’s CCAs have policies, programs, and projects designed to support the acceleration of EV adoption. Many of these programs and projects benefit from collaboration with other agencies, the private sector, and community-based organizations.Primary mechanisms include the provision of information in various forms, co-sponsorship of infrastructure development (i.e., charging, fleet vehicles), and EV and charging rebates and incentives to help drive an affordable and timely transformation.

Information

CCAs can offer their customers information on EV models, the benefits of ownership, and the rebates available from state and federal sources. This informational outreach can take the form of websites, brochures, or more active educational efforts such as sponsoring and/or participating in EV ride-and-drive events.Please see the Resources and Partners section below for a few examples.

Sponsorship of Infrastructure

Many CCAs sponsor public and private charging infrastructure in order to further incentivize EV ownership in their community. Other CCAs are pursuing partnerships to support clean transit efforts like bus fleet electrification–Lancaster Community Energy was an early mover in Southern California.

•Rebates and incentives

The most innovative CCAs are investing directly in EV adoption. Sonoma Clean Power, for example, has invested over $3 million in programs that offer customers, including qualified low-income customers, additional rebates and discounts, as well as free level 2 smart chargers that offer the capacity for future V2G efforts.

There is tremendous synergy between CCAs and EVs. For economic, social, and environmental reasons CCAs can and should invest time and resources in promoting EV adoption and charging infrastructure. Some CCAs have already begun to make the necessary investments, and the future of EVs is promising, nowhere more so than in communities served by CCAs.

Resources and Partners

CCP’s Beyond Combustion: Trends, Goals and Recommendations for Sonoma County(2017)

CPX Webinar–Discusses Beyond Combustion Case Study (Video)

Sonoma County Survey of Global Activity to Phase Out Internal Combustion Engine Vehicles (2018)

CALSTART–A member-supported organization of more than 175 firms, fleets and agencies worldwide dedicated to supporting a growing high-tech, clean transportation industry that cleans the air, creates jobs, cuts imported oil and reduces global warming emissions.

Clean Cities Coalition-Nearly 100 local coalitions serve as the foundation of Clean Cities by working in communities across the country to implement alternative fuels and advanced vehicle technologies.

Electric Auto Association–Find your local chapter! The Electric Auto Association accelerates the widespread adoption of Electric Vehicles (EV) through education, infrastructure support and demonstration.

National Drive Electric Week (An Electric Auto Association event)

Drive EV Page from Sonoma Clean Power–Includes an EV roadmap for consumers, EV Buyers Guide, and EV 101 responsive resource.

Your local car dealer: Walk in and tell them you want to see and test-drive their electric models. If they don’t have any, ask them… why not?

Building Electrification

Overview

Commercial and residential buildings contribute about 25% of California’s greenhouse emissions (GHGs). Most of the emissions from buildings come from the burning of natural gas in furnaces, water heaters and cooking stoves. Once considered a “bridge fuel” from coal to cleaner electricity generation sources, natural gas is increasingly recognized as a problematic energy source that needs to be replaced as rapidly as possible.

Much of our natural (fossil) gas is now derived from “fracking,” short for hydraulic fracturing of deep rock to extract trapped gas. Studies show that burning natural gas generates exceptionally high carbon emissions when the full lifecycle of the fuel – from extraction, to transport, to flaring and leaks, to end use – is considered. In addition, natural gas poses direct safety hazards due to leaks that can cause explosions and fires. Gas use inside of buildings that are not well ventilated can also lead to chronic health impacts.

In order to overcome the problems caused by natural gas burning, many cities are now attempting to replace gas with electricity generated by renewable sources. Recent technological improvements have increased the efficiency of electric heating and appliances, making this transition even more attractive. However, fully electrifying existing buildings is often quite complex and expensive. For example, installing electric heat pump water and space heaters in some buildings, e.g. condos, can be challenging. Thus, most attention at this time is focused on strategies to electrify new buildings, both commercial and residential.

Relevance for CCAs + DER

Building electrification is an important topic for CCAs to pursue. All of their customers, residential, commercial and industrial have buildings. And, almost all of these buildings generate greenhouse gas emissions. The initial question that CCA staff members need to ask is: how can we help reduce those emissions? One way is to make the existing buildings in your service area more energy efficient. (See the section on Energy Efficiency for more on this topic.) The second, and complementary, way is to fully electrify as many buildings as possible with power from fossil-free sources.

Since buildings are under the jurisdiction of the local governments in which they are located, collaboration with those cities and counties is critical. Fortunately, many cities have already begun exploring policies to avoid natural gas in buildings in response to the climate crisis. A natural role for a CCA would be to develop standardized electrification building codes that cities in its service area could adopt. Ideally, these would be “reach codes” that go beyond the state energy code and incentivize the adoption of highly energy efficient electric space and water heating systems.

Another building electrification challenge that CCAs can help to address is the lack of familiarity with some newer electric systems (such as heat pump water and space heaters and induction ovens) on the part of residents, building contractors, building departments and building owners. Creating educational and training programs for these constituencies can be very helpful in increasing their awareness of and support for newer electric systems, thereby reducing resistance to change and fear of the unknown.

Opportunities for Action

In the Bay Area, CCAs can partner with the Building Decarbonization Coalition to promote all-electric carbon-free buildings in this region. Working closely with cities in their service areas, CCAs can advance the following policies, first focusing on the electrification of new buildings:

1) Adopt “Reach” Energy Codes that Lead New Construction to be All Electric, avoiding new gas connections.

Local governments can choose to enact codes that are more ambitious than California’s building codes. The city of Palo Alto, Berkeley, Marin County and the Sacramento Municipal Utility District have adopted “reach” codes that go beyond the state energy code to incentivize new buildings that used electric space and water heating instead of gas. Now many Bay Area cities are exploring ways advance this policy for the state 2020 energy code update. In November 2018, Peninsula Clean Energy (PCE) and Silicon Valley Clean Energy (SVCE) began collaborating on a new program to help new buildings and vehicles go zero carbon with electric power instead of fossil fuels. The “Building Electrification and Electric Vehicle (EV) Infrastructure reach code program” serves all 32 PCE and SVCE member cities to help them update local building codes for all new residential and commercial construction. The reach codes will save thousands of dollars in lower construction costs and future retrofitting that will be required to comply with more stringent emissions rules.

This project will help cities adopt a stronger version of the new California “Title 24” energy code that begins in January 2020, to align with more ambitious local climate goals. It will help cities cut their fossil fuel use and carbon emissions, avoid risky investment in stranded gas assets, and provide code consistency across the region for building developers. The PCE-SVCE program provides full technical support plus $10,000 (for staff time) to all participating cities.

Actions:

  • Collaborate with city councils, planning commissions, staff and key stakeholders in your service area to promote reach energy codes.
  • Monitor the progress of PCE’s and SVCE’s program’s work cities (e.g. favoring mandatory requirements or the steepest incentives possible for all electric, fossil free construction).
  • Work with San Mateo County and the Bay Area Regional Energy Network (BayRen) to create and support regional agency-led trainings and workshops for city permitting staff, developers, and key stakeholders.

2) Design Zero Carbon Standards through City Planning & Zoning Updates

The City of Vancouver in Canada has a carbon standard for buildings that will effectively require all electric buildings by 2025. Menlo Park adopted new green building standards for its Bayfront area as part of a General Plan Update in 2016. These standards were the first time any city had required 100% Renewable Energy for new buildings. Some cities, such as San Mateo, Mountain View, and San Jose have expressed interest in a similar approach using zoning or building codes to direct developers to avoid connecting to gas for new construction and instead build zero carbon structures. The City of San Jose is already promoting Zero Net Carbon (ZNC) commercial and residential buildings through its recently approved Climate Smart San José.

Actions:

  • Promote and support zero carbon building policies through zoning standards for all interested cities in your service area.
  • Reach out to local groups to broaden a coalition and converge around campaign language.
  • Continue outreach and dialogue with city council members, planning commissioners, and staff to promote natural gas phase out as a top priority on sustainability.

3) Explore Banning New Gas Connections and requiring all-electric new construction

The city of Amsterdam, Holland and the province of Ontario in Canada have banned gas connections for new buildings or homes. A number of cities, such as Sacramento, are actively exploring prohibiting new gas hook ups. The Rocky Mountain Institute (RMI) is also discussing this approach with cities across the U.S. The CA Building Decarbonization Coalition, Redwood Energy, and RMI recently hired a law firm to draft a memo on tools local governments can use to ban or restrict gas connections with existing authority. The same law firm is also supporting a prohibition on gas connections for new buildings in Berkeley, under consideration as of February 2019.

Actions:

  • Explore potential statewide legislation or administrative action with local and state leaders.
  • Explore creative alternatives, such as bonds at the time of any construction including fossil fuels, to cover all potential future costs of retrofitting to eliminate fossil fuel use later.

4) Develop Strategies to Retrofit Existing Buildings & Fund Electrification

Cities have additional tools and strategies that can help support electrification of existing buildings. For instance, Beneficial Electrification (BE) entails replacing fossil-fueled devices with their ultra-efficient electric counterparts. Carbon Free Palo Alto’s BE Smart program, is a proactive approach to implementing beneficial electrification that uses marketing, tariffed on-bill financing, and operational elements to jump start and accelerate adoption of the new electric devices that will be integrated into the future smart grid.

CCAs and cities can also offer electrification incentives such as loans, rebates and tax incentives. For example, the Sacramento Municipal Utility District has offered rebates to install heat pump space heaters ($2,500) and heat pump water heaters ($3,000). Also, new homes in SMUD’s service area can qualify for up to $5,000, and existing homes up to $13,750 for gas to electric conversions.

Most cities have a utility user tax (UUT) that taxes the consumption of utility services. The UUT for natural gas could potentially be increased to incentivize conversions to electric heating and appliances, and also create a funding source for low-income retrofits.

Before California’s AB 32 initiated a Cap and Trade program, Palo Alto recognized the value of considering the future cost of carbon emissions that could be imposed on it by market or carbon tax or fee programs for utilities and city infrastructure. The City adopted a $20/ton assumed cost of carbon in decision making that ensured they would not dramatically under-invest in lower cost opportunities to reduce emissions when chances came up. This led to more cost-effective decision making in efficiency programs, and can be used in municipal construction design, fleet selection, and building code development. Current estimates of an appropriate market price for carbon reductions range from $50 to $100/ton or higher.

Actions:

  • Explore opportunities to implement a BE Smart program.
  • Explore opportunities to increase the utility users’ tax
  • Explore the appropriate future cost of carbon to integrate into decision-making around building costs and retrofits.

Resources and Partners

California Energy Commission – Energy Efficiency in Existing Buildings: https://www.energy.ca.gov/efficiency/existing_buildings/ 

Bay Area Regional Energy Network (Bay-REN):  https://www.bayren.org

California Building Decarbonization Coalition:  http://www.buildingdecarb.org

Carbon Free Palo Alto:  http://carbonfreepaloalto.org

Climate Smart San Jose:  http://www.sanjoseca.gov/ClimateSmartSanJose

Lawrence Berkeley Labs:  https://emp.lbl.gov/publications/electrification-buildings-and

Redwood Energy:  https://www.redwoodenergy.tech

Rocky Mountain Institute:  https://rmi.org/insight/the-economics-of-electrifying-buildings/

TRC – Palo Alto Electrification Final Report:  http://docplayer.net/88477190-Palo-alto-electrification-final-report.html

Energy Storage

Overview

There are many ways to store electrical energy. Dams, pumped storage, flywheels, thermal storage, gravity-based systems, and hydrogen are several examples. For the purposes of the DER Hub, we focus in on the rapidly-evolving chemical battery method. Chemical battery energy storage is following the same revolutionary trajectory that solar photovoltaics experienced over the past twenty years of rapid improvements in technology and rapid declines in cost. It is becoming economically feasible to deploy battery storage at the residential, community-scale, and large utility-scale levels.

Relevance for CCAs + DER Deployment

CCAs are subject to the California storage mandate pursuant to AB 2514 (see resources below). CCAs as load serving entities are tasked with managing their load, including procuring power at times when power costs more than at other times. When an LSE is able to shift load to a less expensive time period, cost savings can be realized.

Storage also offers several non-energy benefits such as reliability, resilience, and emergency response, that may not be easy to quantify or measure, but that undoubtedly have value for communities.

Opportunities for Action

Opportunities that create win/win scenarios for CCAs, storage suppliers, and site hosts may include deployments in commercial & industrial (C&I) settings where savings accrued from demand charges avoided by dispatching stored electricity at load peaks, for example, are used to pay for the deployment and obviate the need for the CCA or site host to make a significant investment.

Resources and Partners

California Energy Storage Alliance

CA Energy Commission Energy Storage Roadmap

AB 2514 CA Energy Storage Legislative Mandate

SB 700 Energy Storage Incentives

Microgrids

Overview – Microgrids

There are several different kinds of microgrids. In the context of the DER⌁Hub we are referring primarily to community-scale microgrids where a multiplicity of customers and customer classes are participants. This may include residential,

Source: Local Clean Energy Alliance

commercial and industrial (C&I), municipal, and institutional customers. In effect, entire communities – cities, towns villages, or even an entire county – may decide to develop a community microgrid.

All microgrids can be defined as versions of the larger grid where the elements of generation, storage, delivery, and load are all present. A key distinction for a microgrid is that it is islanded or islandable apart from any larger grid. The smallest are better called nanogrids where a single residence, for example, is powered by solar with batteries for storage enabling round the clock power most of the year.

In some respects, CCAs are ideally suited to serve as facilitators of microgrid development. They are closely connected to local government, local businesses and institutions, and their residential customers. Challenges for CCAs as developers of microgrids include the fact that CCAs do not own or operate the distribution grid, which comes into play when designing a community microgrid.

Relevance for CCAs + DER Deployment

Community microgrids offer multiple potential benefits for CCAs and the communities they serve. For CCAs microgrids introduce an opportunity to have a collaborator in managing demand and shaping load to avoid steep peaks and/or lessen the evening ramp. Benefits for communities can include cost savings, reliability, resilience, and emergency response services.

Opportunities for Action

Some opportunities are born out of tragedy. See the article below in the Resources section that describes some of the possibilities that could emerge from the devastation that occurred with the 2018 wildfire in Butte County.

Some CCAs are already moving forward on microgrid development. For an example see the Redwood Coast Energy Authority’s Airport Microgrid in the DER⌁Hub Projects Clearinghouse.

Resources and Partners

Microgrid Knowledge  Microgrid Knowledge delivers breaking news and analysis on microgrid products, programs, policies and players, including community microgrids and all aspects of DER deployment.

Clean Coalition The Clean Coalition is a nonprofit organization whose mission is to accelerate the transition to renewable energy and a modern grid through technical, policy, and project development expertise.

Microgrid Analysis and Case Studies Report – California, North America, and Global Case Studies, CA Energy Commission, August 2018

Paradise Lost: Reimagining the California Dream with Community Microgrids, John Sarter, in Greentech Media, May 6, 2019

Energy Efficiency

Overview – Energy Efficiency

CCAs enjoy statutory authority in the Public Utilities Code to elect to or apply to administer energy efficiency programs funded by fees we all pay on our energy bills. They can also initiate their own programs funded by their own net revenues.

Optimizing efficiency is a fundamental necessity of a well-designed DER deployment. It doesn’t make sense to apply expensive technologies such as photovoltaics or precious stored energy to inefficient load. It is far more cost-effective to first reduce the load via efficiency measures and then determine how much generation is required, solar or otherwise, to meet that load. For CCAs considering deploying iDERs, it will be important to be able to measure – and actually meter – efficiency gains. Given that, we have included in the Resources section below, two emerging tools that aim to provide a reliable means of metering efficiency.

Image Credit: NW Energy Coalition

Relevance for CCAs + DER Deployment

In a February 2019 news release, CalCCA, the state trade association of CCAs, called on the state to “put financial stewardship, responsibility, and control over programs such as demand response, energy efficiency, and transportation electrification under local control.” In areas where a CCA is operational, the most likely candidate for administering such programs would be the CCA.

CCAs, like any load serving entity, will want to apply best practices to DER deployments. This would include consideration of the loading order for each deployment. That simply means: efficiency first.

To exemplify this tenet, MCE, the first California CCA, received CA Energy Commission funding in 2017 to explore Building Efficiency Optimization by deploying a set of DERs at three project host locations in their service territory. This project aims to demonstrate a viable, replicable program model for future efficiency optimization deployments. Learn more about that project in the DER Projects Clearinghouse.

Opportunities for Action

CCAs can collaborate right from the beginning with existing energy efficiency related agencies relevant to their service territory. It is important to establish relationships with sister agencies for co-promotion and potential collaboration. As CCAs mature, opportunities for collaboration on DER projects may emerge, and having already established a relationship with energy efficiency practitioners will make it easier to design optimal DER deployments.

Resources and Partners

Open Energy Efficiency Platform and Meter (OpenEE and OpenEEMeter) – The OpenEE platform provides a turnkey enterprise Software as a Service (SaaS) platform that enables robust and scalable EE metering and analytics for utilities, aggregators, and regulators. The OpenEEmeter engine democratizes normalized metered savings. Its open source code can be run by anyone, either locally or through integrated application program interfaces.

Metered Energy Efficiency Transaction Structure (MEETS) – MEETS is a fundamentally different approach to energy efficiency aimed providing the tools and resources required to bring deep energy retrofits to scale. It aligns the interests of all stakeholders as it harvests energy from the commercial building sector.

California Energy Commission Energy Efficiency Page

CPUC Energy Efficiency Page

MCE Energy Efficiency Programs – MCE’s energy efficiency programs increase the efficiency of energy and water systems within existing and new buildings to reduce environmental impacts and energy related costs, and improve health, comfort, and safety.

Property Assessed Clean Energy (PACE) – PACE financing is a means of financing energy efficiency upgrades, disaster resiliency improvements, water conservation measures, or renewable energy installations of residential, commercial, and industrial property owners via an assessment on property taxes. PACE financing is not a loan so does not require scrutiny of customer credit history.

Energy Upgrade California – Energy Upgrade California is a statewide initiative committed to uniting Californians to strive toward reaching our state’s energy goals.

Southern California Regional Energy Network – SoCalREN, administered by Los Angeles County, brings together a wide variety of services with one common goal: achieving unprecedented levels of energy savings throughout Southern California. Authorized in 2012 by the CPUC, SoCalREN provides services to residents, businesses, and public agencies throughout the areas served by Southern California Edison (SCE) and SoCalGas.

Bay Area Regional Energy Network – The Bay Area Regional Energy Network (BayREN) is a collaboration of the nine counties that make up the San Francisco Bay Area. Led by the Association of Bay Area Governments (ABAG), BayREN provides regional-scale energy efficiency programs, services, and resources.

Demand Response

Overview – Demand Response

In general, Demand Response, particularly automated DR (ADR), provides the ability for CCAs and other LSEs to signal the need for power reductions from residential, commercial,

Image Credit: Smart Energy International

industrial, and/or agricultural customers to perform well-timed load reductions that keep the grid operating smoothly.

For DR to really work it needs to be automated. In the old days, which in some instances are still with us, manual signals are sent from the LSE to the customer in hopes that the customer will rapidly respond. With improvements in communications technology over the past two decades, it is now possible to fully automate the process of alerting a customer (or a customer’s system) to a need for response, and for that customer’s load to be ramped down to alleviate the problem.

Relevance for CCAs + DER Deployment

In a February 2019 news release, CalCCA, the state trade association of CCAs, called on the state to “put financial stewardship, responsibility, and control over programs such as demand response, energy efficiency, and transportation electrification under local control.” Meaning in the control of the most obvious agency for such a purpose, Community Choice agencies.

CCAs are not regulatorily obligated to support Demand Response (DR) advancement, however, there can be many reasons why a  CCA might want to support DR, including relieving distribution grid congestion, serving customer needs, supporting local economic development, exercising energy arbitrage, and more.

DR is a key element of a well-designed iDER deployment in that it is one of the keys to making a deployment pencil. With DR, valuable grid services can be deployed, namely, responding to peak events by reducing load, thereby saving significantly on expensive procurements on the wholesale electricity spot market.

Opportunities for Action

One of the early opportunities for DR revolves around electric vehicle charging. For example, Sonoma Clean Power provided smart chargers free of cost to customers with EVs. The purpose in this “GridSavvy” program, is to enable SCP to delay the timing of the charging of an EV from the steep ramp time of 6pm to some time later in the night, when demands has waned.

This is just one example. DR should be considered for any given DER deployment.

Resources and Partners

OpenADR Alliance – The OpenADR Alliance was created to standardize, automate, and simplify Demand Response (DR) and Distributed Energy Resources (DER) to enable utilities and aggregators to cost-effectively manage growing energy demand & decentralized energy production, and customers to control their energy future.

Peak Load Management Alliance – PLMA provides a forum for practitioners from energy utilities, solution providers, and trade allies to share dynamic load management expertise, including demand response and distributed energy resources.

California Energy Commission Grant-funded ADR Projects Showcase

CPUC Demand Response Page

US DoE Demand Response Page

Demand Response Resources, Berkeley Lab

American Public Power Association DR Content Page

Rate Design

Overview – Rate Design

CCAs enjoy the statutory authority in the California Public Utilities Code to not only set their own rates per kWh, but also to design and promulgate their own rate designs. As the electricity industry transitions to a decentralized system, CCAs need new tools to recognize and assign value to DER projects that employ multiple energy technologies, deliver grid

Image Credit: Christian Chan | Getty Images

services, capture cost-cutting opportunities for customers, and expedite local DER investment in renewable generation, energy storage, energy efficiency, electric vehicles, and demand response.

An advanced rate structure designed by CCAs can incentivize deployment of DER with grid service features such as load shifting and storing “surplus” solar energy, in partnership with the CCA’s incumbent utility.

Relevance for CCAs + DER Deployment

Taking the lead on incentivizing DERs via advanced rate structures opens a competitive edge for CCAs, especially given the fact that they are closer to the customers they serve and have a stronger relationship with the local governments that play a tandem role in facilitating deployments via permitting and code enforcement.

Locational value. An advanced rate structure for DERs can enable CCAs to adopt and customize rate tariffs that target high-value grid locations, using distribution grid mapping tools such as those in development by the CPUC’s Distribution Resources Plan (R.14 08-013) rulemaking, and locations that provide functions essential to public safety and emergency preparedness (e.g., fire stations, community shelters, emergency operation centers) during grid outages and natural disasters.

Given that CCAs do not control billing or the distribution system, it is imperative that a good faith collaborative relationship exist between the CCA and the incumbent utility. Some of the values that can be obtained from a DER rate design are realized in the distribution system. Conveying information about the rate offerings requires special information about the CCA rate in the customer bills.

Be sure to check out the Advanced Rate design project in the DER Projects Clearinghouse where two CCAs, Lancaster Choice Energy and Peninsula Clean Energy participated in an NREL-funded project to explore rate designs that incentivize DERs.

Opportunities for Action

To date (May 2019) no CCA has stricken out on their own with their own rate design. Doing so is one of the ways CCAs can differentiate themselves from their incumbent utility. It is also a means of developing a competitive advantage vis a vis their incumbent utility and Direct Access service providers.

Resources and Partners

Rate Design for a DER Future, Designing rates to better integrate and value distributed energy resources, Advanced Energy Economy, January 2018

A Review of Alternative Rate Designs, Rocky Mountain Institute, 2016

Fundamentals of Electricity Rate Design (Webinar), Regulatory Assistance Project, 2014

Regulatory Assistance Project – Pricing and Rate Design: Electricity pricing can be a key driver of the transformation of the power sector. (Webpage)

Rate Design Options for DERs, American Public Power Inst., November 2016

Solving the rate puzzle: The future of electricity rate design, McKinsey & Company, March 2019

NREL Solar Energy Innovation Network – Scroll down to “Exploring Advanced Rate Structures to Expedite Solar + DER Deployment”