Differences over what elements to include in measuring the cost-effectiveness of distributed and bulk energy storage projects narrowed during a Dec. 4 workshop by the California Public Utilities Commission staff. The commission\u2019s goal is to remove barriers to energy storage development and lower its costs as it did with photovoltaic technologies, Arthur O\u2019Donnell, CPUC senior regulatory analyst, told representatives from utilities, energy storage companies and environmental groups. Legislation, AB 2514, requires the commission to set an energy storage procurement target for the investor-owned utilities. The ground rule is that any procurement target adopted by the commission next year be cost effective, assuming the target is above zero. Energy storage is considered critical to balancing out uneven flows of increased levels of wind, solar, and other intermittent renewable energy projects. Distributed energy storage technologies include, for example, sets of batteries at a substation. Bulk storage projects can be huge batteries and pumped storage--pushing water uphill into a reservoir during off-peak energy times and releasing it when energy demand peaks. In addition to agreement on cost-effective methodologies, momentum is growing to expressly include energy storage as a \u201cpreferred resource\u201d in the state\u2019s loading order. The order gives top billing to energy efficiency and renewable energy, and puts other green energy resources ahead of fossil-fueled facilities. The commission is looking at two particular models that evaluate whether given technologies--such as compressed air or large batteries at a substation--are worth the cost. The models by DNV KEMA consultants and the Electric Power Research Institute are being fine-tuned to evaluate the pros and cons of energy storage. A number of energy storage advocates insisted the models be transparent. \u201cMaking the tools public and transparent would help developers\u2019 cost effectiveness,\u201d said Janice Lin, California Energy Storage Alliance cofounder. Parts of the models are proprietary because \u201cthey are very costly and the [developers] like to charge money for them,\u201d noted O\u2019Donnell. Cost-effectiveness criteria, all of which have yet to be agreed upon, include whether a given storage technology increases reliability, reduces the need for fossil-fired peaker plants or transmission or distribution line upgrades, and\/or smooths out the flow of wind or solar power into the grid. A key issue still unsettled is what energy storage should be compared to when assessing its value and costs. Commission staff initially considered using natural gas-fired plants as a benchmark. O\u2019Donnell noted that true costs of a storage technology won\u2019t be known until the utilities submit applications for certain projects and seek cost recovery. Southern California Edison did that, in part, by seeking cost recovery for a BrightSource 200 MW solar deal that includes molten salt storage. The commission approved it in late October but the price was kept confidential (Current, Oct. 26, 2012). The commission staff is to issue a Dec. 20 report on storage technologies\u2019 cost effectiveness. In the meantime, the utilities are moving ahead with storage projects. They are expected to reveal real-time pros and cons of given technologies. Southern California Edison has an 8 MW battery project at its Tehachapi wind farm. Pacific Gas & Electric invested in a 30 MW compressed air storage project with federal stimulus funds. San Diego Gas & Electric has small battery storage projects. Regulatory proceedings that affect energy storage include long-term procurement, resource adequacy, and the Rule 21 interconnection process.