PG&E picks six community microgrids, three using water as the battery
Victoria Shinder2 min readPG&E has selected six new community microgrid projects for a $30 million investment, announced on 17 September 2026 through the second application window of its Microgrid Incentive Programme (MIP). Energy-Storage.news reported it alongside a separate Massachusetts award of $40 million across 36 BESS projects.
The programme traces to Senate Bill 1339 (2018), which directed the California Public Utilities Commission to develop statewide microgrid policy with the California Energy Commission and CAISO. The CPUC authorised the $200 million MIP in April 2023, funded by the state's three investor-owned utilities — PG&E, SDG&E and Southern California Edison — and it prioritises communities most at risk from outages. With an earlier intent to award up to $43 million across nine projects, PG&E says the total now represents more than $73 million in authorised community microgrid investment, spanning rural, coastal, Tribal and high wildfire risk areas of Northern and Central California.
The technically unusual entries are three Lake County projects using an approach called FLASHES — Firemain Linked Auxiliary Supply / Hydraulic Energy Storage. They combine local solar with pumped hydro storage using underground water resources: solar pumps water into covered elevated tanks when generation is abundant, and the stored water runs back through turbines when electricity is needed. The design is presented as delivering long-duration storage and multi-day resilience while also providing water for firefighting.
What it means
The FLASHES design is worth attention because of what it stacks rather than what it stores. Elevated water in a fire-prone county has a use on the day nothing goes wrong with the grid, which changes the economics of an asset that otherwise earns only during outages. Storage projects justified on resilience alone are hard to fund; storage that doubles as firefighting supply is answering two budget lines.
The engineering caution is head and volume. Pumped hydro's energy content is a function of how much water you lift and how far — tank-scale installations produce modest energy however elegant the arrangement, so "long-duration" here should be read against the load being served, which is essential community facilities rather than a town.
The programme structure is the transferable part: ratepayer funding, authorised by the regulator, directed at outage-vulnerable communities, awarded in application windows. That is a repeatable instrument, and the six projects are evidence about what it attracts.