Regulators OK Round One Storage Solicitations

By Published On: October 17, 2014

The California Public Utilities Commission Oct. 16 unanimously approved investor-owned utilities’ solicitations for a total 110 MW of energy storage. This is the first of four mandated storage procurements to take place between now and 2020. “This is a major initial milestone to implement storage policy,” said commissioner Carla Peterman. In October 2013, regulators voted to require the utilities to buy a total of 1,325 MW of storage by the end of this decade. “We still have a lot of work to do,” commissioner Mike Florio said after welcoming the decision advancing California’s energy storage market. He pointed to the myriad unresolved issues as reflected in the emerging commission and grid operator energy storage roadmap. That includes an “elusive” definition of storage. Florio also raised concerns about the utility cost recovery mechanism, particularly for long-term utility storage contracts. “Artificial limits” on the length of recovery could cause the utilities to drop long-term deals, he added. Under the solicitations approved this week, by the end of this year Pacific Gas & Electric is to buy 80.5 MW of storage technologies, Southern California Edison 16.3 MW, and San Diego Gas & Electric 16 MW. Both installed storage units, such as Edison’s large battery project in the Tehachapis (see CleanTech), as well as storage contracts, count toward utility targets. The new energy storage procurement will be accompanied by “vigilant commission oversight,” in cooperation with utilities and participants, “to ensure reliability and safety standards are maintained and do not erode over the long-term,” the ruling states. The decision clarifies that eligible technologies include two-way, electric vehicle-to-grid vehicles, solar thermal and hybrid thermal generation. PG&E’s proposal to include a 2.5 MW biogas project as qualifying storage was rejected in this first round of storage solicitations because it is not new technology. The underlying legislation promoting energy storage seeks to advance new and emerging projects. How utilities are to recover above-market storage costs for departing load—customers that leave utility territory—was left for another day. Recovery is to be through the Power Charge Indifference Adjustment mechanism. Utilities are to submit a joint proposal on recovering their “stranded costs” from losing customers because of storage projects, along with their winning storage bids by December 2015. The ruling authorizes PG&E, Edison and SDG&E to together collect $500,000/year for six years from ratepayers for the commission’s storage procurement evaluation program.

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