PG&E Advancing $43 Million for Nine New Community Microgrids in Northern California

Rhea-AI Summary

PG&E (PCG) has announced plans to award up to $43 million in Microgrid Incentive Program (MIP) grant funding for nine new community microgrids across Northern and Central California. The initiative, part of a $200 million statewide program, will support disadvantaged communities vulnerable to power outages.

The selected projects span across Humboldt County (4 projects), Lake County (3 projects), and Marin County (2 projects), with four serving tribal communities. These microgrids will provide resilience for nearly 9,000 customers, including 3,600 with Access and Functional Needs. Individual project awards range from $1-6 million.

The program received 50 initial inquiries, with 22 advancing to submit applications after receiving $25,000 development grants. Projects were selected based on customer attributes, resilience benefits, and environmental impact. The microgrids will utilize clean energy solutions including solar, battery storage, pumped hydroelectric storage, and biomass.

Positive

• Secured $43 million investment in infrastructure development
• Project serves 9,000 customers, expanding service reach
• Diversification into clean energy solutions
• Part of larger $200 million statewide program indicating growth potential
• Strong project pipeline with 50 initial inquiries

Negative

• High initial capital investment required
• Complex project implementation with multiple stakeholders
• to specific geographic regions

Insights

Energy Infrastructure Analyst

PG&E's $43 million commitment to nine community microgrids represents a strategic but financially modest infrastructure investment within the company's broader resilience initiatives. At just ~0.1% of PG&E's $37.7 billion market cap, this funding primarily demonstrates execution of regulatory-approved programs rather than presenting material financial impact.

The technical approach is noteworthy—deploying diverse clean energy solutions including solar, battery storage, pumped hydroelectric, small hydroelectric, and biomass across multiple counties. These microgrids will serve 9,000 customers, including 3,600 with special needs, creating resilience hubs that can operate independently during broader grid outages.

This implementation represents one tranche of PG&E's $79.2 million allocation within California's $200 million statewide Microgrid Incentive Program. While the headline numbers aren't moving the needle financially, the strategic value comes from PG&E's continued grid modernization progress in vulnerable regions historically prone to outages.

The structured approach—with rigorous project scoring frameworks evaluating community attributes, resilience benefits, and environmental impacts—demonstrates disciplined capital allocation within regulated parameters. The established track record referenced with existing microgrid projects in Humboldt County provides operational proof points for the expanded initiative.

Regulatory Affairs Specialist

This announcement demonstrates PG&E's continued compliance with CPUC-mandated resilience programs, a critical regulatory priority in California's evolving utility landscape. By implementing the Microgrid Incentive Program with visible progress, PG&E maintains goodwill with regulators following its complicated history of reliability challenges.

The structured, transparent selection process—evaluating 50 initial inquiries and narrowing to nine projects with clear community benefits—shows regulatory savvy in allocating public-purpose funds. The $34 million dedicated to front-of-meter generation resources plus $9 million for interconnection costs represents prudent deployment of available regulatory funding.

Particularly significant is the focus on disadvantaged communities and customers with Access and Functional Needs (AFN), directly addressing equity concerns prominent in current regulatory frameworks. The tribal community focus (four of nine projects) aligns with California's environmental justice priorities.

The second application wave opening April 3 ensures continued momentum in meeting regulatory obligations. While financially immaterial compared to PG&E's broader capital plans, this program demonstrates compliance-oriented infrastructure investment that supports the company's regulatory standing—important considering PG&E's need to maintain positive relationships with California regulators for rate cases and future approvals.

Application Window for Second Wave of PG&E Microgrid Incentive Program Grants Opens April 3

OAKLAND, Calif., March 26, 2025 /PRNewswire/ -- Pacific Gas and Electric Company (PG&E) today announced its intent to award up to $43 million in Microgrid Incentive Program (MIP) grant funding for the development of nine new community-driven microgrids throughout its Northern and Central California service area. PG&E today also announced the opening of the application window for the second wave of MIP grant funding beginning April 3.

To apply for the second application window, interested parties must submit MIP project ideas to PG&E by May 30, 2025, through an email to communitymicrogrids@pge.com.

The Microgrid Incentive Program funds the development of community microgrids to support disadvantaged communities most vulnerable to outages. 

A microgrid consists of a group of interconnected customers and distributed energy resource(s) (DER) that can disconnect from and reconnect to the grid to stay energized during an outage.

Community microgrids are typically designed to serve a variety of vulnerable customers and key community resources such as hospitals, police and fire stations, schools, water treatment and telecommunications facilities, gas stations, markets, and residences, among others.

PG&E received approximately 50 inquiries from tribal governments, local governments and community-based organizations since launching its MIP in late 2023.

22 of the roughly 50 project inquiries advanced through initial program screening requirements and technical consultations with PG&E to submit applications. Each of those 22 projects received an application development grant of $25,000 to offset community investments in developing successful project applications.

PG&E subsequently selected nine projects following a rigorous evaluation and scoring process. PG&E's project scoring framework evaluated customer and community attributes, resilience benefits, and environmental benefits along with the requested incentive amounts to determine the projects with the highest benefit-to-cost ratio.

Prior to formally accepting the awards, the nine selected wave one MIP projects will perform due diligence to: review the terms of their award; reconfirm their project assumptions, including any changes to projected development costs; and reassess risks associated with other funding sources they may have assumed to be available.   

Upwards of $43 million will be awarded to the nine projects, of which approximately $34 million will be dedicated to pay for front of the meter generating resources (such as solar) and batteries, engineering and project management costs, and property purchase or lease costs. Each of the nine projects will also be allocated up to an additional $1 million to cover interconnection costs for the distributed energy resources that will power the microgrids.  

"The North Coast is home to several ground-breaking microgrids that benefit customers in the region, including the Redwood Coast Airport and Blue Lake Rancheria microgrids in Humboldt County. These microgrids have now been active for several years providing resilience and low-carbon energy to some of our most vulnerable communities. PG&E was an early collaborator on these microgrids and we're proud to continue supporting the expansion of community microgrids to additional North Coast communities through this significant award," said Dave Canny, Vice President for PG&E's North Coast Region.

The microgrids selected in the first wave of MIP funding are located throughout PG&E's North Bay and North Coast region and comprise four projects in Humboldt County, three projects in Lake County, and two projects in Marin County. Four of the nine projects will serve tribal communities. The microgrids will serve as new energy resilience solutions in the event of broader electric grid outages for a total of nearly 9,000 customers including approximately 3,600 customers with Access and Functional Needs (including people with disabilities, older adults, children, limited English proficiency, and transportation disadvantaged). The wave one awardees will receive between approximately $1-6 million each, based on requested incentive amounts and following the results of PG&E's project application scoring.

Generation resource types for selected MIP projects include a variety of clean energy solutions such as solar, battery energy storage, pumped hydroelectric storage, small hydroelectric, and biomass.

More About MIP
The Microgrid Incentive program is a statewide $200 million competitive grant program to fund clean-energy community microgrids in disadvantaged and vulnerable communities.

Authorized and approved by the California Public Utilities Commission, the new program allocates a total of $79.2 million in project funding for PG&E, $83.3 million for Southern California Edison, and $17.5 million for San Diego Gas and Electric. Projects selected under the MIP can receive up to $14 million in award funding each for the design and development of a multi-customer, front-of-the-meter community microgrid.

Customers and communities interested in learning more or applying for grants through the second wave of PG&E MIP grant funding should visit www.pge.com/mip.

Project scoring criteria and information about all the incentives and allowances available, including details on eligibility, how to apply for funding and the process for development of a community microgrid is provided in PG&E's MIP Handbook.

About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E Corporation (NYSE: PCG), is a combined natural gas and electric utility serving more than sixteen million people across 70,000 square miles in Northern and Central California. For more information, visit pge.com and pge.com/news  

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SOURCE Pacific Gas and Electric Company

FAQ

How much funding is PG&E (PCG) allocating for the first wave of microgrid projects in 2025?

PG&E is allocating up to $43 million for nine new community microgrids, with approximately $34 million for generating resources and up to $1 million per project for interconnection costs.

How many customers will benefit from PG&E's (PCG) new microgrid projects?

The microgrids will serve nearly 9,000 customers, including approximately 3,600 customers with Access and Functional Needs.

What is the deadline for the second wave of PG&E's (PCG) Microgrid Incentive Program applications?

Interested parties must submit MIP project ideas to PG&E by May 30, 2025, through email to communitymicrogrids@pge.com.

What types of clean energy solutions will PG&E (PCG) implement in the selected MIP projects?

The projects will utilize solar, battery energy storage, pumped hydroelectric storage, small hydroelectric, and biomass technologies.

How many tribal communities are included in PG&E's (PCG) first wave of microgrid projects?

Four out of the nine selected microgrid projects will serve tribal communities in Northern California.