The California Public Utilities Commission (CPUC) has agreed to expedite a plan by Edison International (NYSE:EIX) utility Southern California Edison (SCE) to purchase energy storage.
CPUC said in a May 26 news release that it is part of an effort to help serve areas hit by leak at the Southern California Gas Aliso Canyon Storage Facility. Southern California Gas is part of Sempra Energy (NYSE:SRE).
In support of Gov. Jerry Brown’s (D) State of Emergency Proclamation, the CPUC is pursuing activities that could be quickly implemented to alleviate the electric reliability risks to the Los Angeles Basin, such as the expedited procurement authority granted to Edison.
CPUC has identified energy storage systems as one potential solution because they can be fast-responding, firm, and dispatchable. Energy storage resources can be potentially constructed, interconnected, and deployed on a short timeline.
Under current conditions, energy storage systems may help alleviate the reliability risks associated with the partial shutdown of Aliso Canyon, CPUC said.
Under the plan, SCE shall solicit in-front-of-the-meter energy storage that must be operational by Dec. 31, 2016. Any energy storage systems under the recent order must be in locations that help to alleviate the reliability concerns connected with the partial shutdown of Aliso Canyon Gas Storage Facility.
“Given that it is unclear how long the moratorium on injections into Aliso Canyon will persist, SCE may enter into contracts with terms of 10 years or less,” CPUC said in the order.
Edison’s storage contracts will count towards its overall storage mandate and meet its local capacity requirement needs. Resources procured in Edison’s solicitation must be price-competitive with previous solicitations in which Edison has awarded contracts to comparable energy storage resources, CPUC said.
Further, Edison must ensure that any contracts entered into provide that sellers operate the energy storage facilities in accordance with prudent and safe electrical practices.
A massive gas leak was discovered at Aliso Canyon in late October 2015.
Aliso Canyon is critical to help meet peak electrical demands during the summer months and peak gas usage demands in winter months. Aliso Canyon’s limited operational capabilities have put SoCalGas at risk of not being able to meet the gas supply needs of electric generators and its retail customers in the Greater Los Angeles area. This situation creates a distinct possibility of electricity service interruptions in the coming summer and winter months.
The California ISO has expressed optimism that the situation this summer can be managed.
SCE has proposed an aggressive schedule that calls for issuing the request for offers (RFO) on May 27 with an offer submittal deadline of June 17. SCE would target CPUC approval on Sept. 15.