Sunnova’s bid to become a micro utility in California received preliminary bad news this week. Administrative Law Judge Rizzo issued a proposed dismissal of its microgrid application. This is just a preliminary rejection, but a formal rejection would be a huge blow to Sunnova’s plans.
“Until and unless the Commission hears the item and votes to approve it, the proposed decision has no legal effect. This item may be heard, at the earliest, at the Commission’s April 6, 2023 Business Meeting.”
Based on its filing, Sunnova seemed to at least deserve a hearing to debate its proposal and answer questions. A formal rejection wouldn’t even allow that.
In September, Sunnova Community Microgrids California LLC (SCMC) applied for a Certificate of Public Convenience and Necessity (CPCN) from the CPUC “to construct and operate public utility microgrids” and to “establish rates for service.” Said another way: Sunnova established a new division, SCMC, to function in the role of “micro” electric utility for planned new residential developments under 2,000 homes and has sought approval from the CPUC for its proposal.
“Sunnova strongly believes that we have the support of the people of California and their “advocate” is advocating against them,” the company stated via email, regarding This is something they deserve to know. They want to know why the PAO is advocating so hard to dismiss our application when there is broad public support for the concept and the application shows the rate, reliability, environmental, and other public interest benefits that community microgrids can provide. It’s clear that the ALJ’s proposed decision proposes the path of least resistance with this decision.”
We went into detail on the filing itself as well as the negative and positive comments submitted in this article.
The comment period drew in protests from investor-owned utilities (IOU), that mostly centered on procedural questions and not the feasibility of the concept, although one protestor did claim that the Commission should not permit another utility to serve customers in an area that a large IOU regards as its service territory.
“If that’s the main concern, we’re ready to go very deep on that,” Miller says. “We’ve done the legal research on new providers being allowed into the market for the benefit of consumers, and we believe that new market entrants will help bring about the benefits of microgrids that the California legislature envisioned in passing microgrid legislation back in 2018.”
A “micro utility” is not new, but it has so far been utilized in very limited circumstances, like where a community can’t get power at all. Sunnova also points to other utilities in which existing judicial and CPUC precedent allows for new providers to come into the market.
“The CPCN is the path to establishing a utility, and we think this allows for new entrants,” Miller says. “The micro utility approach proposed by SCMC is more about removing the obstacles for small utilities to pursue microgrids so that it doesn’t cost a 2,000-home community millions of dollars to set up service. . We’re not asking for a new rule; we’re asking for permission to use what exists.”
Read more about the keys to the proposal here.