To encourage the deployment of cost-effective DERs, the Public Utilities Commission has proposed a pilot for the provision of regulatory incentives to California’s three major investor-owned utilities. In the PUC’s ruling, “cost-effective” means that the compensation offered to a DER provider, plus the value of the utility incentive (a 3.5% shareholder return, for discussion purposes), would cost less than what the utility would have recovered if it had not deployed the DERs and instead relied on a traditional grid solution. The ruling defines a process for utilities to access the additional incentive through the pilot, and poses a series of questions for comments, which are due May 2.

The PUC also established a working group devoted to develop a competitive DER solicitation framework for targeting reliability needs in local areas identified in the integration capacity analysis (ICA) and locational net benefits analysis (LNBA) performed in a separate proceeding.