White Paper: The EcoBlock Project and the “Own Use” Exemption under Public Utilities Code Section 218 – A Way Forward for Privately Operated Microgrids

The Oakland EcoBlock project (EcoBlock) seeks to develop a microgrid within an existing city block in Oakland California as a demonstration project on the viability of retrofitting an existing block of residential and commercial buildings into a microgrid capable of islanding from the grid. EcoBlock has considered a variety of different potential regulatory frameworks that might accommodate the objectives of the project. Based on an analysis of current law, the working model has been to rely upon existing provisions within the Public Utilities Code that recognize the right of individuals to install and operate electric equipment outside of Commission regulation if the generation, storage and distribution of power is limited to the owners’ “own use.” This white paper examines the “own use” exemption in section 218 of the Public Utilities Code and explores its potential as well as its limitations in the context of microgrids and recent Commission action. In so doing, it touches upon the recently issued Microgrid Proceeding Proposed Decision (Microgrid PD), the Commission Staff paper upon which the PD is premised and issues that arise out of both. This white paper, however, is not intended to be a critique of either and, rather, is intended to prompt questions and reflections on how the policy decisions made in these documents will foster or retard the development of projects like EcoBlock.