California PUC to take its next foray along the energy storage ‘roadmap’

The California Public Utilities Commission at its March 26 meeting will look at issuing an order instituting a proceeding under state Assembly Bill 2514 and to continue to refine policies and program details as required or recommended by a decision that established the Energy Storage Procurement Framework and Program and approved the utilities’ applications in implementing the program.

This rulemaking would consider recommendations included in the California Energy Storage Roadmap, an interagency guidance document which was jointly developed by the California Independent System Operator, the California Energy Commission and the CPUC. The commission would utilize this rulemaking as a procedural forum to effectuate policy and program details that would apply to future solicitations beyond the present 2014-2016 procurement period.

A resolution that the commission will review at the March 26 meeting outlines the program and what is to be voted on.

In this rulemaking, consistent with AB 2514 and current commission energy storage policy, the commission will continue to adhere to the following guiding principles:

  • The optimization of the grid, including peak reduction, contribution to reliability needs, or deferment of transmission and distribution upgrade investments;
  • The integration of renewable energy; and
  • The reduction of greenhouse gas emissions to 80% below 1900 levels by 2050, per California goals.

In December 2010, the commission opened a rulemaking to implement the provision of AB 2514 that directed the commission to determine appropriate targets, if any, for each load serving entity (LSE) to procure viable and cost-effective energy storage systems and sets dates for any targets deemed appropriate to achieve. In response, the commission took immediate action to advance energy storage through a robust stakeholder process and three subsequent energy storage decisions in 2012, 2013, and 2014. These three decisions established the groundbreaking foundation for the current Commission Energy Storage Procurement Framework and Design Program.

The third decision, issued in October 2014, approved investor-owned utility (IOU) energy storage plans (for the 2014 biennial period only) with minor modifications and closed the rulemaking proceeding. More specifically, this compliance decision approved proposed energy storage procurement targets of: San Diego Gas & Electric (SDG&E), 16 MW; Southern California Edison (SCE), 16.3 MW; and modified the storage proposal of Pacific Gas & Electric (PG&E) to 80.5 MW.

Further, this compliance decision approved “eligible” technologies including vehicle-to-grid (V2G) electric vehicle technologies, eligible storage component of biogas, eligible storage component of solar thermal (CSP-TES), eligible storage component of hybrid thermal (Hybrid-TES), but excluding V1G (managed charging) and biogas (without eligible storage component). As to cost recovery, the compliance decision authorized the Power Charge Indifference Adjustment (PCIA) mechanism to allow recovery of above-market costs associated with departing load for market/”bundled” energy storage projects but denied a request for an extension of the PCIA mechanism for market/”bundled” energy storage contracts beyond 10 years. It directed the IOUs to submit for commission review and approval a “Joint IOU Protocol” proposal for a PCIA methodology to determine potential above market stranded cost of bundled service storage (procured in the 2014-2016 solicitation).

Following the issuance of the three energy storage decisions, in December 2014, the California ISO, the CPUC and the California Energy Commission, in cooperation with 400 interested parties, including utilities, energy storage developers, generators, environmental groups and other industry stakeholders, published “Advancing and Maximizing the Value of Energy Storage Technology-A California Roadmap” (Storage Roadmap). This roadmap focuses on actions that address three categories of challenges expressed by stakeholders:

  • Expanding revenue opportunities;
  • Reducing costs of integrating and connecting to the grid; and
  • Streamlining and spelling out policies and processes to increase certainty.

But there are many unanswered questions about the energy storage that will be addressed in this upcoming proceeding, like whether the energy storage procured under this proposal meets the stated purposes of optimizing the grid, integrating renewables, and/or reducing greenhouse gas emissions.

The preliminary schedule for this proceeding includes that 30 days after the issuance of this decision, parties will file comments that will identify the facts and issues of laws relevant to this proceeding’s scope. The comments should also: identify the party and interest of the party in this proceeding; raise any objections to or recommendations regarding this order’s determinations as to categorization of the proceeding as quasi-legislative, the need for hearing, issues to be considered, or scheduling; and, identify any other procedural or substantive issues parties believe to be relevant.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.