Memorandum
Date: August 4, 2026
To: The Honorable Lake County Board of Supervisors
From: Susan Parker, County Administrative Officer
Benjamin Rickelman, Deputy County Administrative Officer
Subject: Consideration of Direction on the FLASHES Microgrid Boundary: Option B4 or Option B5
Executive Summary:
On June 23, 2026, the Board of Supervisors approved the Microgrid Incentive Program (MIP) Grant Agreements with Pacific Gas and Electric Company (PG&E) and the Development Reimbursement Services Agreements with Trane for predevelopment of the Firemain Linked Auxiliary Supply/Hydraulic Energy Storage (FLASHES) Hartley and Lucerne projects. With those agreements in place, one threshold question remains before predevelopment engineering can advance: the boundary of the area to be served by the microgrid. Staff and Trane are seeking the Board's direction on whether Trane should pursue the Option B4 or Option B5 boundary.
The microgrid boundary defines the area the FLASHES projects are designed to serve in island mode. It drives the infrastructure the project must build, determines which communities receive resilience benefits, and shapes the long-term economics of the project. Both options are technically viable; the choice between them is a policy decision for the Board of Supervisors.
Option B4 is an extended boundary. It runs east through Nice to include the community of Lucerne within the microgrid's resilience footprint, serving a larger population than the alternative. Extending the boundary east also requires additional distribution and interconnection infrastructure. Trane projects that Option B4 would produce a 20 to 25 percent (20-25%) reduction in cash flow, net of operating and capital costs, compared to Option B5.
Option B5 is a compact boundary. It serves the Upper Lake-Nice corridor portion of the Lucerne substation's territory, and stops short of Lucerne, itself. This is the baseline against which Trane's projected 20 to 25 percent (20-25%) r...
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