Chapter Five: Working Groups and Analytical Tools

When the California Public Utilities Commission established the scope and schedule for the DRP proceeding, President Picker made two strategic procedural determinations.  The first was that the Rulemaking would not follow traditional processes led by the Commission. Instead, the plan would be to employ collaborative working groups to hash out what were expected to be highly technical issues.  

The working group process was increasingly being used to good effect in California, in such diverse proceedings as the energy storage mandate, Rule 21 interconnection reform, the development of advanced inverter technology requirements, and the Rulemaking to document and eliminate methane leaks from the natural gas system.  Picker saw a collaborative process building on the “More Than Smart” initiative as a more promising regulatory approach to a complex matter. 

“The stakeholder process in California, and the Legislature and the Constitution require a lot of demonstrated input, making sure people are heard and understood,” Picker observed. “The working group process is better than doing it as a quasi-judicial, evidence-based process.”

The second strategic choice was the focus on developing analytical tools, rather than taking the New York State REV approach of engaging in a market reform vision quest and then jumping into competitive procurements. 

Track 1 of the DRP rulemaking, therefore, prioritized two analyses that would help identify optimal locations for DER deployment: 

Integrated Capacity Analysis (ICA) would determine available “hosting capacity” on every utility distribution circuit.  ICA was intended to help developers site projects in locations that would be less likely to require grid upgrades, and expedite interconnection requests.  The “work product” of the ICA would take the form of maps of the utility system showing circuits that were either constrained or available for incremental DER deployment.

Locational Net Benefit Analysis (LBNA) was expected to be a valuable tool for optimizing the location of DER based on cost-effective opportunities to defer or avoid traditional distribution system investments.  

Damon Franz (Senior Policy Advisor, Tesla), who worked as a policy advisor to former President Michael Peevey and then as supervisor in the Commission’s Energy Division, explained the expected value of these tools for DER developers. “The ICA helps identify locations where we won’t have high interconnection costs,” he said.  “LNBA anticipated there would be a value for distributed solar for adding distribution capacity or prolonging [utility] equipment life.  We thought the output would be a value heat map, indicating locations where siting DERs would be especially valuable.”

Scott Murtishaw, now at the California Solar & Storage Association, has similar observations about the role of working groups.  “The ICA is a fairly objective process, once the working group hashed out some basics like what the business community wanted to see and what data should be in the maps.  The ICA can help avoid directing [resources] where it does the most harm. To base planning on the ICA is good, in actual practice it was a mixed bag,” he said.

The working group process proved to be time consuming and often contentious.  Status reports provided to the Commission indicated that, for example, the ICA group met 18 times between May 2016 and March 2017.  Similarly, the LNBA working group met 17 times in a 10-month period. As many as 60 individuals participated at one time or another in the ICA group, with about 15 steady participants. 

Their goal, as directed in a May 2, 2016, Assigned Commissioner’s Ruling (ACR), was to develop demonstration pilots for each of the analytical tools.  The ACR empowered the working groups – though open to the public and informal as to process – to “monitor and provide consultation to the IOUs” as they developed their demonstrations.

The groups were largely self-directed by utilities and stakeholders, although CPUC staff from the Energy Division was charged with group oversight, and outside facilitators from “More Than Smart” (later, Gridworks) were contracted to provide support. 

“At the tactical level, in the working groups there was a lot of friction with the utilities,” recalled Ted Ko of storage developer STEM.  “We spent a lot of time talking past each other.” Ko said he felt there was a lack of a shared vision in the California process that hampered reaching agreements.

Even after “final” status reports from the ICA and LNBA working groups were filed with the CPUC in March 2017, there remained a great deal of refinement to work on and many complex issues left unresolved.  After directions from the Commission to address potential refinements, the working groups issued their “final final” reports in early 2018 with a revised schedule for IOUs to “publish” ICA maps online and furnish the LNBA demonstrations by the end of the year. 

In retrospect, participants appear to agree that the ICA mapping had found workable solutions, but the LNBA did not.

“We didn’t get to a great place on LNBA,” said Ko. “It didn’t feel like it fully accounted for the ability to displace utility investments.  One major missed topic that’s top of mind now was resilience value. That would have been a natural place to talk about that.  Everybody wants to talk about resilience these days, but nobody was ready to put a real value to it.”

Sky Stanfield (Attorney representing the Interstate Renewable Energy Council (IREC)), expressed high hopes for ICA maps in particular, calling the agreements reached in the working group an “important milestone” for revealing utility circuit hosting capacity. “Providing that transparency is unprecedented,” she said. “It enables  third parties and utilities to be more aware upfront.  The collaborative stakeholder process will result in very good maps.”

Still, she acknowledged that despite efforts to reach consistency among the IOUs, there remains a disparity in outcomes.  “The SCE map in particular is useful in that you can look at their system, go to a particular site and get information that is significant and accessible. SCE’s maps are good; San Diego’s are functional but difficult to use; PG&E has software issues that are symptomatic of internal PG&E problems.”  

In fact, PG&E’s first maps showed very little circuit capacity available for future DER, a finding that has raised many questions from stakeholders.  The utility has indicated it will take another crack at its ICA maps, using a different software vendor. 

“We view ICA as an interconnection tool that could provide real value, a guide to where capacity exists. It’s an engineering tool that can be used to screen certain types of interconnections,” noted Bill Peter with PG&E.

Erik Takayesu, SCE’s representative in the early working group effort, feels the result was worth the ICA effort. “We were pleased with where that landed. The tool development using the iterative method that followed was an innovative way to look at where DER could be located. The LNBA framework also has potential but continues has proven to be more complex.”

Former CPUC President Picker’s high-level assessment is generally positive but recognizes that the maps are about pointing out system limitations. “They are helping us to think through where to speed up interconnections.  There are some places where the capacity analysis is pointing to that are not where customers have the money” [to invest in DER].

Although she remains optimistic about the long-run value of the hosting capacity mapping exercise, IREC’s Stanfield sees a need to integrate the ICA with both interconnection processes and distribution planning. “Now the challenge is to integrate the ICA into the Rule 21 process, this may happen by the end of this year,” she said.  “It’s important that the ICA has happened but it has not been integrated into the Rule 21 interconnection process yet.  The ICA helps identify where there is the capacity for projects to interconnect, but Rule 21 needs to be modified to ensure those results are actually used to make interconnection decisions. IREC is also concerned that we have not actually integrated the ICA into the distribution system planning process, we will continue to work on that in the coming months.”