Please note that the transcript provided below is AI-generated and intended for reference. It may contain missing words, misspellings, or other small errors. To request a correction or clarification, please contact info@theclimatecenter.org.
Alexandra McGee, MCE (00:06:25):
Welcome. We’re about to get started on California’s energy future, talking about microgrids and virtual power plants. As we settle in, I just wanted to kind of level set and ground truth us all. Of course, many of us in this room are staunch advocates for clean energy and sustainability. This is wonderful. But what we’re learning in California, oh, this is my temporary note. There’s our timekeeper. Please note, she’ll keep me on time as well. So in California it’s important to be aware of what we consume. Obviously, we want more renewable energy, more clean energy.
(00:07:59):
We’re also becoming more aware of when we consume it. It’s not just important what we consume, but when we consume it with increasing demand and deepening duck curves. It’s the virtual power plants and microgrids that you hear about today are some of those solutions to create flexibility within the demand of our consumers across California. Many of you already are familiar with what virtual power plants are, but for those of you who are not, I like thinking of it as a symphony. A bunch of different instruments tucked into basements or garages throughout a community, perhaps in a residential neighborhood, could be renters, could be owners. They have devices distributed energy resource devices tucked into various corners, and a symphony pulls them all together in these harmonies.
(00:08:50):
It does seem harmonious. I will say when we look at it from 10,000 feet. However, the devil’s in the details and these guys know a lot of details. So we’re going to learn a lot about how when the rubber hits the road, how to make these symphonies sound more harmonious and less caco, and that’s the goal for California. The goal. I also, just before we get started, I wanted to say that to get to that harmony, it’s really important to have a variety of partnerships and the Climate Center is an amazing partner in this work. Also, just wanted to thank any members that are here from the California Energy Commission recently been giving awarded grants of to support virtual power plant development. I represent MCE. We just received one of these grants called VPP Flex. Thank you. There’s another community choice aggregator who won one of these grants.
(00:09:40):
Sonoma Clean Power also got a VPP Flex grant to support the development of VPPs for community choice aggregation. So I wanted to thank the CEC and also the Climate Center for all your work, because CCAs are able to advance these. Yeah, thank you. Climate Center CCAs are able to advance some of these innovative ideas, but we wouldn’t even be here if it weren’t for the advocacy of great people like the Climate Center. They’re now 25 CCAs across the state of California. Collectively, we’re serving over 14 million customers and 200 different jurisdiction cities and counties alike. We’ve contracted for more than 18 gigawatts of new clean generation capacity through long-term power contracts, and that’s currently representing about a third of the state of California. And we wouldn’t be here if it weren’t for environmental advocates and great partners like the Climate Center. So my thanks to you all for hosting this wonderful event.
(00:10:37):
Okay, so without further ado, that’s me and CCAs. I’m going to present our panel and then we have short presentations from each before we launch into some question and answers. So quick intro to the panel. Alex IFF is a program manager at CPA, another CCA Community Choice Segregation program. He works on community solar and battery storage programs like power share community, solar and sun storage, all of which provide money to low-income customers to get clean energy rebates, bill discounts, and of course access to virtual power plants in the future. Next time we have Greg Fishman. He’s president of the board of directors at SUD on the board for over 10 years. He’s advocated for clean energy and ambitious greenhouse gas reductions. So we are kind of going to be wonky today. We’re going to be talking about technical hardware installations, but I also just wanted to give Greg a shout out because it’s not just high tech fancy gadgets that we talk about.
(00:11:35):
It’s also natural solutions. And through his work with a local foundation, is it they have planted over 2000 trees in his neighborhood. So let’s not forget the trees, as the Lorax said. And these are also pivotal solutions for our climate change efforts. Next, Greg is an electrical engineer at LADWP over 10 years in utility and renewable experience. He leads a team of engineers that supports LADWP sustainability goals and oversees the development of new programs under the distributed Energy resources umbrella. Thanks for being here, Sam. And finally, Tim Frank will be closing us out today. He’s a policy advisor at CTWI. He’s also a co convener of the Workforce and Environmental Justice Alliance representing the Bay Area Building Trade Councils on a variety of related policy issues. And his advocacy helps bridge the distance between labor and job seekers. A critical piece in this puzzle for a just transition connecting people to life-changing career opportunities. So thank you all for being here and talking about these important issues. That’s about enough that you want to hear from me and the intro. So we’re going to launch into their presentations, and again, we have Lois here in the front to keep us on track. So with that, I believe we will move to CPA. You’re up first.
Alex Ricklefs, Clean Power Alliance (00:12:59):
Thank you very much. Very happy to be here today. Today I’m going to speak on one of our newer programs that’s going to officially launch at the end of this week. The timing is quite great, but it’s called our Solar and Battery Access Program, and it’s going to be Clean Power Alliance’s First Venture into Virtual Power Plants. So just quick background on Clean Power Alliance. We are the community choice aggregator that serves 35 member agencies in LA and Ventura County. We serve about 1 million customer accounts, that’s about 3 million customers and businesses. We are the largest community choice aggregator in California, and we serve more customers on a hundred percent renewable energy rate than any other utility in the nation. One interesting thing about us and about all CCAs is that we take our revenues and we reinvest them back into customer programs to really help support what we see as barriers in the clean energy sector. So we have 14 customer facing programs that address kind of three main pillars of our commitment, which is local procurement, grid reliability and electrification.
(00:14:20):
So the solar and battery access program, this program is going to provide income qualified single family homeowners access to solar and battery storage at no upfront cost and no monthly cost for a 10 year period. Eligible homeowners do not have to pay anything upfront. There’s no property lien, there’s no credit checks. This is truly an opportunity to connect those who may not be able to afford some of the capital for solar and battery storage, and utilize a combination of federal tax credits, state incentives and private funding from both Clean Power Alliance and our Partner Haven Energy to get these homeowners clean energy systems.
(00:15:12):
One thing that’s really unique about this is the state incentive, SGP or the Self Generation Incentive Program. They are later in May, they’re launching the residential solar and storage equity funds, which provide a significant amount of funding for solar and battery storage systems. And that kind of really makes a lot of this program possible. And what we’re going to do with these batteries is we’re going to leverage them for load flexibility opportunities, and that’s what’s going to tie into our virtual power plant that we’ll talk about later. But we’ve agreed to, well, as part of this program, customers will agree to allow us to operate their batteries over a three year period, and that’ll help the customers maximize their bill savings while also reducing CPAs resource adequacy costs, which are a huge driver, and why our generation costs are the way.
(00:16:12):
So from the customer value perspective, there will be a significant amount of bill savings. We’re averaging about at least a 70% reduction on customer electricity bills due to the solar and battery storage. 20% of the battery will be set aside for resiliency purposes. And so that means we have about 80% of the battery’s capacity to play with in terms of our virtual power plant. The program ownership model is going to be a 10 year ownership. So the company we’re partnering with Haven Energy, they’ll actually own the battery and solar systems for 10 years. And then at the end of that, the customer has the opportunity to kind of take on ownership of these systems. And if they choose not to, the company will take them down. But we’re basically utilizing these incentive funds investment from Haven Energy and the federal tax credit to cover over 90% of the cost of these systems.
(00:17:19):
So it’s very little investment from the participant, and that’s really due to the S chips, RSSE funds, the residential solar and storage equity funds. And for eligibility, the income piece is that we are looking for CPA residential customers that need to be single family homeowners and they need to be at or below 80% of the area median income. So we’re focusing on kind of a median to low income customer segment. And unfortunately, this is for single family homeowners, this is not for the renter population. We are looking to address that in other programs. So if anyone has doing anything with renters or multifamily, would love to talk to you as I’ve already talked to some people today, because that is a huge opportunity across the state to make sure that those customers can also get clean energy and the benefits of local energy systems.
(00:18:24):
So for virtual power plants. So I’m not going to go into too much detail about, well, I actually have some interesting slides to show that’ll kind of talk about different opportunities we can do with batteries. But essentially we are going to have a collection of 300 behind the meter batteries through this program that we want to operate as a virtual power plant to reduce peak electricity demand. We are going to utilize a distributed energy resource management platform or a DERMS to control these devices. And through this program we’ll have about 4.5 megawatt hours of battery capacity to work with. Now, we’ve done some initial modeling on what this can mean to clean power alliances, energy costs and that or operating costs. And by leveraging these devices and discharging these batteries during peak demand times, CPA can reduce their resource adequacy costs by almost a little bit less than $400,000 over a three year period.
(00:19:34):
And that’s pretty significant because resource adequacy costs are really what is a large expense to a lot of the generation side of the electricity bill. So by utilizing these batteries and lowering those costs, we can therefore at a larger scale, reduce costs for consumers. So I’m going to show two slides which are going to show, I know there’s a lot of colors here, but essentially this is a model of a residential customer’s energy consumption throughout a 24 hour period and when they are drawing energy from the grid when they are utilizing their solar energy, when they’re charging their battery, and when they’re discharging their battery. So the virtual power plant really allows us to control how the battery is charging and discharging and utilizing that in a way to benefit the customer and also reduce peak demand grid. So in this image I have here, this is for the month of July, and during these, the earlier summer months, there may not be as much need to export batteries to the grid, and it may be more beneficial for customers just to reduce their peak demand and kind of focus their battery usage on lowering the amount of energy they’re drawing from the grid rather than exporting it to the grid.
(00:21:06):
So as we see here during our peak demand times between four to nine, you see that they’re discharging their battery solely for home consumption rather than exporting it to the grid. Now, if we look at other months such as August, which or September and August, which are typically when we have really high heat events and there’s a lot of potential brown outer blackout opportunities, we may want to discharge that battery to the grid to provide supplemental energy to make sure that we have enough energy to supply our communities. So in this kind of model right here, you can see during the six o’clock time, the battery’s discharging majority of its power, and that’s going out to the grid to kind of provide supplemental power. And what’s great about a virtual power plan is we can do this in real time and on a day-to-day basis and kind of look at when we need power at each hour. So I know I took a lot of time, but happy to answer any questions later and I’ll pass it over to smud.
Gregg Fishman, SMUD (00:22:23):
All right, good afternoon everybody. I’m Greg. I’m president of the SMUD board of directors this year. A couple of my colleagues are at the conference. I dunno if they’re in the room or not. Roanna, Herber and Dave Tema are here, and I’m going to just talk to you a little bit about what SMUD is doing in this space. Little bit about SMUD. First of all, welcome to Sacramento. You’re in SMUD territory. The lights are on courtesy of SMUD.
(00:22:49):
We’re the six largest public utility in the United States. We’ve been around for 75 plus years, 645,000 meters, 2300 employees. I’m one of seven elected members of the board. And last year, I’m sorry, 2023, our power mix was 78% carbon zero. Oh, yeah, by all means, by all means, we have a goal to be zero carbon by 2030 and God willing, and the creek don’t rise, we’ll get there, but there’s some headwinds coming out of the federal government and elsewhere. So there’s some interesting problems there, but it’s still a goal of ours. Our zero carbon plan, it is based on more of the technologies that we know, work, wind, solar, battery storage, and some new technology too, carbon capture and sequestration if the federal grant comes through for that the way that we’re expecting it to, if we’re doing more geothermal and we are also relying on our customers to help us in that regard, partially by creating a virtual power plant.
(00:24:02):
We’re not actually calling it that, but that’s essentially what it is. And it’s just aggregating resources, but it’s not just the batteries and home distributed energy generation. It’s also by aggregating the devices. Now that can be controlled water heaters, heat pumps for your house, electric vehicle charging, and making sure that those can either be demand response or in the case of vehicles can discharge back to the grid, what’s an electric vehicle, but a big mobile battery. And to the degree that we can start using those, especially when we’re talking about fleets, and I’ll get to that a little bit more. So the grid was designed for one way transmission and use of energy we generated, we transmitted to the load center to Sacramento, we distribute it out to the homes and businesses and they use it. And that’s all changed, right? Because now there’s with rooftop solar and other devices that we’ve already talked about, how do we manage that two-way flow of energy that sometimes is back and forth minute by minute.
(00:25:08):
And at the same time, one of SMUD goals isn’t just to keep the lights on and to keep our rates low. And by the way, I forgot to mention this too, our rates are currently about 52% lower than PG&E’s, and there’s lots of good reasons for that that we can sort of get into. Part of it is we don’t have a profit margin, and that’s a big part of it, but our stated goal is to keep our rates low, be environmentally responsive, provide reliable power, and also to be a positive force in the community we serve. We’re here to enhance the lives and enhance the quality of life for our customers beyond keeping the lights on. And so when we start looking at these things like virtual power plants and distributed energy resources, how do we apply that to communities that don’t have the means to put a rooftop solar system on their house or to buy an EV?
(00:26:03):
How do we help people that are typically left behind in this kind of transition? So that’s something that we always look at as well, so that we have my Energy Optimizer thermostat program for battery storage, our peak conservation programs, commercial battery storage and managed EV charging. These are just a few of the programs that we’re implementing now that can help our customers manage their energy demand, reduce their bills, and help us in this journey forward school hosted community resilience centers. Think about a school or a community center, a church, some other community centric building that has solar panels on the roof, battery storage systems EV charging out front with bi-directional. And so in the case of an extended power outage, we don’t get too many, but they do happen. If that happens during wildfire season when the air quality is terrible and people don’t have their own air conditioning at home, even if the electricity is on, where do they go?
(00:27:06):
What can they do? A community resilience center is one option, and we’re working on some of those. And it’s the same way by the way, you put those in an underserved neighborhood and you train the local young adults to maintain those systems and to install those systems. And now you’ve got workforce development as well. So these are things that all kind of come together under suds umbrella with partners. We don’t do anything on our own because we don’t really do workforce development on our own, but we have partnerships that can do it. Community solar plus. So we’re working with Hiram Johnson High School in the Sacramento City Unified School District. Again, grant money is an important part of this. And one of the reasons that SMUD declared a climate emergency was five or six years ago now and embarked on this zero carbon plan is we knew that by getting out in front of this, we detract partners.
(00:27:56):
And that has happened both at the state level, the federal level up until recently and locally as well, grant Union High School and Twin Rivers School District. We’re working with them again on grant funded projects that can help them with their electric vehicles and electric school buses. The school buses, they generally, electric school buses have a great load profile for us. They charge up overnight, they need ’em in the morning, they come back in middle of the morning and through early afternoon they can recharge again if they need it. They run for a couple hours in the afternoon, and then right about five o’clock or so, 4 30, 5 o’clock, they’re back in the yard plugged in, and if they still have some battery power left, as the sun is going down and solar power is dropping off, we tap into that battery supply and we help manage that cross fade right between energy demands, still climbing in a hot summer day here with air conditioning load, but solar power dropping off. But those battery systems back up that solar power and provide us that hour and a half or two window when we really need it. And then by the time the load starts dropping off again, as the sun really goes down and it starts to cool off, hopefully we get a delta breeze that cools things off a little bit, then they can start charging again. And that can be done automatically. It can be done by timing. It can be done manually if they want.
(00:29:26):
Oh, that’s not me. So I’m going to just end there and say, SMUD is actively pursuing these programs. And I’ll be very honest with you, we have a couple of pilot programs for microgrids, and frankly, because our power is relatively reliable, we’re the right size and the right shape geographically to provide pretty good service to our load, pretty reliable service to our load and keep our rates down. The microgrid concept doesn’t work as well here because our rates are already low and we’re already reliable. And so it’s not that we’re not exploring it, we are, but it’s like, okay, where does this really make sense? How does it make the most sense? Where does it make the most sense? And how can we do that and provide benefit to the customers that are within the microgrid and not overcharge those who are not part of that microgrid? So there’s always that balancing act that we’re doing with our customers, but that’s a little bit about what suds doing. I look forward to your questions when we’re done.
Samer Fakhro, Los Angeles Department of Water & Power (00:30:33):
Hey everyone, I’m Samer Fakhro. I’m the full engineer at How’s this a little better? Okay, so Greg’s the highest level. I’m a little lower. I’m the full engineer of a engineering group at the department. I manage a group of about four or five engineers, and we create the programs that Greg talked about. So we have a lot of the similar programs. I heard a lot of people talk about their policies today. Our governing board is mostly the city of LA as well as the state. These are some of our goals. In 2021, we completed a study with the NRL to figure out some pathways to get to a hundred percent renewable energy by 2035 and 2045, the city saw the study, they liked it. They said, okay, 2035 is when we want you guys to transition to a hundred percent renewable energy. So these are some of our goals, 70%, these are draft goals, whether these change sometimes on the way to get there, all I know is the final goals, 2035, but by 2029, 70% renewable energy, GHG emission reduction by 76% by 20 30, 40 5,000 EV chargers in the city installed by the end of this year, which we’re on track to do so that’s commercial EV chargers, residential EV chargers, et cetera.
(00:31:49):
And then the big one, that’s the problem that my group is focusing on is local solar, right? That’s wind basin solar, a thousand megawatts by 2030, and all these numbers are probably meaningless. Our peak load was 65 0 2 megawatts. Our peak capacity is 8,000 megawatts. So just to put things into perspective for everyone, so we’re the biggest POU in the country. As I mentioned, 8,000 megawatts is our capacity, and we have about 11,000 employees or something like that.
(00:32:18):
So this is my group. We create these programs, right? DSGS obviously is a CEC program, and we participate. We don’t have very much capacity yet, but we do participate. Another program that came through my group is a feed and tariff program. I’m not sure if everybody’s familiar with that, but it’s essentially a micro PPA, right? A developer comes in, installs, commercial scale, solar on, I don’t know, a park or something like that. And we pay them for the energy, something like 15 cents per kilowatt hour. And we have a program, an iterative program called Fit Plus, which integrates energy storage. And so these are, by the way, the individual components that we anticipate going into VPPs. And so that’s why I’m talking about them. We have an internal program, which my group and I just took, called the Utility Built Solar Program. That’s a utility built solar.
(00:33:10):
Our crews build solar at a more commercial scale throughout the city on our facilities. And then we have the solar rooftops program, which we created in something like 2017 where we lease a customer’s rooftop to install solar and it’s front of the meter. We pay them an incentive every month to let us lease their rooftops. And of course, there’s demand response, which is put into the VVP mix. And then lastly, as Greg mentioned, a really interesting idea is the school bus problem. They’re paying all this money to electrify their school buses. They’re sitting most of the day not doing anything. So we want to be able to leverage that. So we created this program called the Commercial Energy Storage to Grid Pilot Program, and that’s aimed for school buses, UPS, FedEx, et cetera, et cetera. We had a 20 megawatt goal, and I believe we are currently working on the next iteration to this program. And a couple of years ago, we actually won a grant from the DOE for $48 million for most of these programs here. So we’ll see how that pans out.
(00:34:19):
So I mentioned earlier that we have a thousand megawatts that we need to get to by, what was it, 20 30, 20 35. I forgot what it said, but how are we going to get there? DERs require a lot of space, and I’m just talking in their perspective of non-customer programs. So if this was us installing the DERs, how are we going to get there? So we worked with our fellow city departments to come up with three MOUs to be able to install DERs on their facilities. So these are departments like the LA Zoo General Services division, police stations and so forth, and then recreation parks. And that enabled us to install solar energy storage EV chargers on 1100 facilities total, including ours. So we’ll talk a little bit about some of the example program or the example sites that we’ve installed on and our pending, and that gives us the idea of where we’re looking to move towards next.
(00:35:16):
So this is the Green Meadows Recreation Center. This is in a dac in a disadvantaged community in South LA. We are at the tail end of this development. It’s a 250 kilowatt, two megawatt hour battery. So it’s two battery containers feeding the local distribution grid on a 4.8 KD level and net energy metered solar 50 kilowatts. And then utility owned solar that’s front of the meter solar of 182 kilowatts, and that’s split between carport and canopy solar. So as Greg mentioned, resiliency centers are also really important. What do the local community folks do when there’s a power outage? It’s rare in DEP as well. We rarely have grid outages, but what do they do in this instance? And so this is a microgrid that we’re working on, and this is a resiliency center, right? The battery has plenty of capacity to power the buildings when there is an outage or a natural disaster or something of that nature.
(00:36:16):
And then the last component of this is EV chargers and a DC fast charger, two DC fast chargers and two level two chargers. Not that much, but we’re hoping to expand this in the future. So this is examples of what we want to do to get there to meet our renewable goals. And then the next one is a bigger scale one. This is the LA Zoo DER project that we’re hoping to start this summer or a little later this year. And that’s the four megawatt carport and shade canopies in the, I don’t know if you’ve ever been to the LA Zoo, it’s just a giant parking lot that’s just empty. So we can install solar on top of it, and then we’re installing battery energy storage there, as well as a bunch of V chargers. So 130 make Readys and 40 DC fast chargers. So this is the kind of projects that we have to keep installing in order to meet our goals. And these are the components of the VPP that that’ll get it going. So happy to take questions soon.
Tim Frank, Construction Trades Workforce Initiative (00:37:36):
Does it work? Yeah, it sounds like it works pretty well. I’m tall and this thing is short. I mean, this thing is far from my face. I didn’t know what it would work, but it works great. So thanks. So my name is Tim Frank and I am a board member and an employee interesting relationship with the Construction Trades Workforce Initiative. And I’m a co-director of the workforce in EJ Alliance, which is a coalition of environmental labor and environmental justice leaders that are working together to promote a consistent policy package of environmental justice and labor policies by the CCAs within the territory covered by CC Power, which is a joint powers authority that represents CCAs in a continuous band of area that stretches from Santa Barbara on the south all the way up to the North coast and includes all the CCAs that serve the Bay Area, or it used to until a year and a half ago or something like that, MCE dropped out, but they were a part of it.
(00:38:40):
And it was originally a fully contiguous territory covered by CC Power. So the Construction Trades Workforce Initiative is an entity that works to create access to good, strong middle-class careers for targeted cohorts for women, residents of low-income communities, the justice impacted veterans, et cetera. And this is something that we’ve been doing for a number of years. We’re a partner of the building trades and we sort of institutionalize the support for targeted hire. And then we also do a lot of policy work and in particular are doing a lot of policy work around climate. So the CTWI has been a member of the Workforce Environmental Justice Alliance and the Workforce and Environmental Justice Alliance is now organizing itself with fiscal sponsorship from The Climate Center. So I will acknowledge this very nice new relationship that we have with The Climate Center and we’re really quite proud of, and we’ve had a lot of experience working at trying to see how we can actually create greater equity and more good union jobs and the transition generally.
(00:40:01):
But to speak to the question of the virtual power plants, I think it’s an interesting challenge. So virtual power plants are a way of aggregating loads from what are essentially retail sources. And this can be single family homes, it can be multifamily homes, it could be from an industrial or a municipal setting or a institutional setting. But the idea is that you’re using software and you’re using some gadgets to actually allow you to aggregate demand from these grid sources. And by grid sources, what I’m really talking about is things that are on the other side of the meter in the home in the school setting. So from a labor perspective, there’s two different aspects of this. We’ve got utility employees who are interested in how the meters are actually put in place, and they have some particular views on that. They would like to see, for instance, that the work be done by the people who work for the utilities IBW 1245, which represents the employees from SMUD and also represents all the employees for PG&E.
(00:41:11):
They would like to do any work that’s involved installing meters. But on the other side of the grid where we’re talking in the household, in the building, et cetera, that is typically construction work. And so construction work and the utility work are two different pieces of labor. And this is where the interesting challenge is if you look at the utility in California is an almost entirely unionized industry. Everything is done by union workers. The lineman work is all union work. The call centers are all, it’s all organized, it’s all union work, but on the construction side, there’s much lower union density. And one of the things that we’re trying to do is to find opportunities to use public policy to help drive the development of better performance on that side so that we can have more good union jobs on the other side of the meter.
(00:42:12):
And working with virtual power plants is one of the opportunities to actually do that kind of thing. It’s easier to get union contractors engaged in working on larger contracts than it is on very tiny contracts. And a very tiny contract is when you’re going in and you’re installing one circuit to allow one appliance in one home, and it’s a several thousand dollars project, but if you can actually get an aggregate project, so you’ve got five or 10 in a neighborhood or you’ve got 50 or a hundred, then that’s a very different proposition. It’s much easier for us to get contractors from the union fold to actually bid on that work. So that’s something that we think that virtual power plants offer an opportunity for. And this is particularly true when you’re looking at programs that are aimed at the low-income sector because there you can have a direct install model.
(00:43:05):
And what’s important about the direct install model is that you don’t have an individual homeowner picking who’s going to do the work and getting three bids on that work. That’s a retail model of delivery. And it’s harder for us to engage in that setting with very small contracts. But when you’re dealing with a direct install program, the implementer or the utility can actually establish a contract with a contractor to do a bundle and our folks, and if you’re also applying labor standards as, for instance, prevailing wage requirements or an apprenticeship utilization requirement, which is something you see typically involved in public works work. And that’s a very good sort of strategy for building a strong skilled workforce that can earn a middle income, but we don’t often see it in residential service contracting. And so the virtual power plant offers an opportunity with that direct install model to have an implementer that’s letting these larger contracts on which if you apply those labor standards, we can engage and actually plug in our members to do the work and do high quality work that actually performs well.
(00:44:26):
And that is providing the benefit of not only good quality work for a customer, but also building the middle class and reducing public service costs for things like affordable housing or paid healthcare and things like that, things that otherwise would be subsidized by the government. So there’s a public policy interest and actually supporting high road work in this area. And I think it’s important to recognize that there’s, at this point, the practice of implementing virtual power plants is sort of, it’s new. We haven’t done a lot of them. There are some good examples and there are some bad examples. I look in the Bay Area, there’s MCE has a virtual power plant project that they’ve gotten in Richmond, California, which is looking at a single family market. There was an opportunity for them to actually do that work with a high road model and they kind of missed that opportunity.
(00:45:24):
But there are other places where, and I would cite Ava Community Energy, which is doing a virtual power plant oriented around community resiliency hubs where they’re actually going to be applying prevailing wage requirements and apprenticeship utilization requirements, her policy that they’ve adopted, supported by the CCA board. And we expect that that’s actually going to generate a substantial amount of high road work. So the kind of thing that we’re excited about, and we think about the transition from this model where you have a fossil fuel industry that is overwhelmingly unionized to a model of where you have a lot more distributed, it’s going to be very important for us to take advantage of every opportunity that does arise to actually point in a direction of using high road labor. If we want the transition to be just, and the example that AVA is setting by actually working with us is actually key to actually making that work.
(00:46:29):
And I would note just as a little bit of an opportunity to give a shout out to SMUD, who’s here, AVA Community Energy actually uses SMUD’S call center to do all their call center work. And those workers are represented by A BW 1245. And so they do a fantastic job, and this is an example of a CCA using union labor for this back office operation. And some CCAs don’t, some CCAs using non-union operations to do that work. But SMUD is doing what we consider to be the right thing. And if you look at the actual results in terms of the stats on customer satisfaction, it’s through the roof really good. This is typically what you get from the high road work, whether it’s a call center or the actual construction. When are you using people who have gone through apprenticeship programs or have been supported by the union kind of training model? You end up with a high quality work that actually serves everybody well and creates high quality employment and good middle class jobs. So that’s what we are excited about working on. Thanks.
Alexandra McGee, MCE (00:47:43):
All right. We do have a couple minutes here. I was just doing a quick scan of the room while our speakers were speaking, and I do see that there are, there’s representative from various different sectors here. So I’m going to take moderator’s prerogative to try and pull on some, maybe predict what some of you might be wanting to ask into a single question here. So I do see that we have some data folks in the room. We also have some funders. I’m not making eye contact, so no one swarms you afterward. But I do see some funders in the room, and of course we have a lot of policy folks in the room as well. So is there a gap or is there a challenge that each of your organizations are facing as you try to implement these strategies for decarbonization virtual power plants or microgrids that a data solution would offer a policy solution or a funding solution? Maybe we can start with you, Alex, and move down to Tim.
Alex Ricklefs, Clean Power Alliance (00:48:33):
Yeah,
(00:48:39):
I see it has to be dark green, not light green. I would say the biggest barrier is the renter and multifamily communities. It’s if you own a home, it’s easier for you to get solar and storage because you are the one, you have access to your own property, and we want every customer to have access to clean energy and resiliency, and how do you do that if you’re a renter? So I think policy to make it easier for the multifamily sector and renting communities to build solar and storage is going to really accelerate development of behind the meter resources and also that feeds into virtual power plant opportunities. So I know at Clean Power Alliance, we’re slowly starting our journey into the virtual power plant sector, and as that grows, we’ll want as many resources as we can get to participate. And if we can focus on that multifamily sector, I think that gives us even more fuel per se.
Gregg Fishman, SMUD (00:49:53):
I think for SMUD, there’s a lot of problems. There’s always things you can do better, but it’s really a matter of educating our customers about what’s out there and what the value is and trying to get them interested and excited. There’s so many different possibilities now driven by the data and the technology and coupling that together. And frankly, most of our customers are like, you know what? I just want to turn the lights on and not have to worry about it too much and getting them to think about it. Yeah, this is something I used to say all the time when I used to work for the California ISO as a public information officer and the utility industry spent the first a hundred years telling people, don’t worry about it. Flick the switch, it’ll be there. And it’s only been the last 25 or 30 years we’ve been saying, no, wait, wait. We really want you to think about this. Where’s it coming from? When are you using it? How much is it costing? All those things. Now we want you to think about it and getting people to make that shift. It’s happening, but it’s happening slowly.
Samer Fakhro, Los Angeles Department of Water & Power (00:51:08):
I can comment on the department, so it’s probably similar response to Greg. I think marketing is the biggest issue for us. I want to say that half our residents are probably low income. I want to say it’s something close to that. It’s a huge chunk. And I go out to these local communities and parks and so forth and tell them, Hey, we want to install solar on your park. They don’t care. The question that we get is, why is my bill so high? And so a gentleman earlier mentioned the ESTRO program, which we’re running for our territory for AB 32 funds. So this is free solar and energy storage essentially for low income participants. And so why do we have to, for me, if you tell me free solar energy storage, I do it absolutely, but they just don’t know about these programs. So I think that making sure that the community’s aware and is probably one of our bigger challenges for that problem. And obviously funding issues, I think more money helps with everything. And so renewables are expensive. Batteries, I mean especially which are the most useful for our utility at this point. So that would definitely help as well.
Tim Frank, Construction Trades Workforce Initiative (00:52:26):
Yeah, I think one of the big challenges that we see is, I mean, we look at, there are two big challenges. One is on a policy front and the other is funding. And they’re actually related. So on a policy front, the CPUC for instance, for the last 30 years has emphasized energy efficiency programs that they’re funding with the Ray pair funding, they’ve emphasized rebate programs that are very much a retail delivery model. And the retail delivery model has actually not worked particularly well for our members. It’s also true that the retail delivery model of these rebates has been focused on sort of high-end first adopters, so the wealthier people in the population. And we think as a policy choice, it would be important for them to actually emphasize more of the low-income customers and the direct install model. And the direct install model is interesting, particularly for our perspective because you can apply then as sort of a wholesale delivery model where you’re actually letting these larger contracts.
(00:53:26):
And we actually think that when you actually do that, that you have the ability to deploy labor more efficiently and you can reduce a lot of the transaction costs associated with the work. So you can get a lot of economic efficiencies that are a product of scale. And we think that that is a better way of utilizing resources efficiently rather than the false accounting of the rebate model where you’re saying, well, we’re only paying a little bit for that thing and we’re claiming all of the actual climate benefit. That’s been sort of the justification for the retail rebate programs. But we think that as we try to transition the entire economy and all of the housing stock and all of the businesses in the entire economy, we’re going to have to figure out how to do an awful lot of this work on a much more wholesale basis to actually get the work done at an affordable price.
Alexandra McGee, MCE (00:54:23):
Yes, go ahead. Thank you, Barry.
Gregg Fishman, SMUD (00:54:25):
So this isn’t necessarily popular, but one of the ways Smite addresses both the multifamily dwelling issue and what, I’m sorry,
Tim Frank, Construction Trades Workforce Initiative (00:54:36):
Tim.
Gregg Fishman, SMUD (00:54:36):
Tim was just talking about thank you. It is difficult to put solar panels and battery storage in individual homes. Even when the homeowner is there and present and interested and has some financial resources to put into it, the house might be shaded, the roof might not be the right oriented correctly. In my case, I’d have to empty out my whole garage to put a battery panel in there. So SMUD looks at doing community solar and community battery storage. And when we do that, all of our customers benefit from that. The downside is it takes space and especially the solar panels. And so finding the right place to do that can be difficult. You don’t want it too far away because then you’re talking about transmission and additional costs. So where do you build solar that is environmentally correct and not causing too many other problems, but still provides that benefit.
(00:55:36):
But when you do that, our entire customer base benefits. And I’m going to throw in just one thing real quickly. We used to have a nuclear power plant, Rancho Seco. It was closed down in the late eighties by a vote of the people because it wasn’t running very well. But it is southeast of Sacramento out near a town called Wilton. And if you go out there now, so the cooling towers are still there, the spent nuclear fuel is in dry storage. It’s totally safe and benign, and it’s just there. The guts of the nuclear power plant are long gone, but it is on the same site now is our Consumnes power plant, which is a natural gas fired power plant. Yes, it puts out carbon, but it is modern and efficient, and it’s part of our base load of operations for now until we get enough other resources to replace it. But it’s also surrounded by solar panels. And so you see the past, the present, and the future of energy in that one location, and it takes advantage of the existing transmission infrastructure and water that’s there and some other resources. So it’s been an interesting transition, and it’s one of those places that our entire customer base benefits from that solar array. And there’s battery storage there as well.
Alexandra McGee, MCE (00:56:52):
I mean, symbolically, what a neat visual to see the passage of time, like geologic formations all concentrated on that one spot. Thank you for sharing that, and thank you to the panelists. We are at time, I believe, oh, wait, hold on. Hold on. We’ve got 10 minutes, Kurt, come on. All right. I was told three 30. Okay, we have a bonus. We’ve just been awarded a bonus of 10 minutes, so we do have a bit of time to take some audience questions if there is one right here in the front. Yeah. So you been talking about uses.
Gregg Fishman, SMUD (00:56:52):
Alexandra McGee, MCE (00:57:41):
So for the folks in the back, the question is that a running theme of today’s panel has been kind of the residential sector, and if the panelists have any perspective to share on commercial or industrial scale applications.
Samer Fakhro, Los Angeles Department of Water & Power (00:57:53):
Yeah, I can chime in for the department. I mentioned during my presentation that the feed and tariff program, right, that’s a commercial scale program feed and tariff plus I think is the iteration that touches on the microgrid part. It includes a battery and Sorry, can you hear me now? Yeah, louder. Okay, got it. So the feed and tariff program plus is what integrates the battery and what enables the microgrid. So we’ve thought of the problem. Many of our customers, many of our commercial and industrial customers aren’t very high loads, so many of ’em aren’t interested. But for those that are, we do have a program that’s thought of those things, and that’s the feed and tariff plus program.
Alex Ricklefs, Clean Power Alliance (00:58:43):
I’ll just add one thing to that, which is Clean power lines doesn’t really serve a lot of industrial customers. We serve mostly residentials. That’s why a lot of our programs are residential focused, but there is a lot of very interesting work being done on the industrial side, and it’s extremely important. So thank you for your question. And I want to plug a old colleague of mine who is doing work on thermal energy storage for the industrial sector where they can utilize and store heat to use that as their fuels to avoid using natural gases. So there’s a lot of great work being done there, and a lot of that is or was funded by the DOE.
Tim Frank, Construction Trades Workforce Initiative (00:59:25):
Yeah, and just to build on that, the thermal energy systems networks are actually really interesting from a labor perspective because they employ many of the same people who will be laid off as we decommission our gas system. So from our perspective isn’t just that there’s X number of people who happen to be union employees who will still be union employees, but can we actually find a way to help the specific crafts that have the most at risk to actually make sure that they have a future too? And these thermal energy systems are really interesting way to actually make sure that the UA actually gets some good work out of this.
Gregg Fishman, SMUD (01:00:07):
I mean, SMUD certainly works very closely with our commercial and industrial customers. I’m not aware of a customer or a location where a microgrid currently makes that much sense for somebody to invest in it. If you have a reliability need that isn’t currently met, we’ll work with you to install another feed line to make sure you’ve got reliable power. If you need a backup battery system, I mean, we can help you with that. But in terms of creating its own separate grid, I mean there are some business parks and places that former Air Force bases in the area where that might make sense. But nobody’s actually said, gee, we really want to do a micro grid here just for this installation yet. I mean, we’re sort of dipping our toes in that water, as I said. But right now, just being a regular customer seems to work. And for especially new businesses or expanding businesses, we do have the ability to offer an economic incentive rate, economic development rate. So if you’re bringing in jobs or retaining jobs or adding jobs or something, we can make a special deal that makes it even more attractive.
(01:01:18):
Conceivably,
Alexandra McGee, MCE (01:01:20):
We got one more question a bit further in the blue. Yes. So I’m glad we have three minutes for this. This is a huge question for the people in the back about domestic manufacturing. Given the current tariff and trade war that’s happening, what are we doing internally to build our own supply?
Tim Frank, Construction Trades Workforce Initiative (01:01:59):
There is so much that could be said in response to that question. So yes, I mean, we’re looking at costs that are going up astronomically right now. I mean, a month ago I was talking to developers who were telling me that they were curtailing projects because steel and aluminum are going up 25%. And this was before the tariffs were actually applied. This is just when suppliers were basically saying, we’re preparing for the worst and we don’t know what’s going to happen. And then what we happen. I mean, we had the worst happened. And I mean the signal that sent to the entire, and not just to suppliers, but the banks, everybody. I mean, our economy is at real risk of just dramatic mismanagement right now. And fixing that is actually a really important thing. And it’s one reason why we need both Democrats and Republicans to respond and say, let’s be really careful right now about what we do about managing our economy, what we do with tariffs, and the fact that at the same time that the tariffs are being applied, that we’re seeing chip sack grants that are being withheld, that it’s essentially sending the message that we’re not necessarily supporting our domestic manufacturing.
(01:03:21):
It’s not a coherent message. And if we could find a way to develop enough pressure to get folks at the federal level focused on delivery, competent management of the economy, that would be a really helpful thing.
Alexandra McGee, MCE (01:03:38):
It’s a good note to end on. Thank you for coming to our panel tonight. Have a wonderful rest of your conference. Thank you, panelists. Are we done? Okay.
Samer Fakhro, Los Angeles Department of Water & Power (01:03:48):
Thank you. And we have a 20 minute break and vehicle grid integration starts here at four o’clock.
Gregg Fishman, SMUD (01:03:53):
Thank you.