The Public Utility Commission (PUC) of Texas, in a Nov. 14 preliminary order, identified the issues that must be addressed in relation to AEP Texas North Company’s (TNC) application for regulatory approval of its proposed installation of utility-scale batteries (storage facilities) at its substations in Woodson and Paint Rock in Texas.
The company has proposed the first installation of distribution-scale battery technology in Texas, the PUC said, adding that the company seeks confirmation from the PUC that its proposed installation of batteries complies with Texas law and that the storage facilities will be considered distribution assets whose cost would be eligible for inclusion in the company’s distribution-cost of service.
AEP TNC, which currently serves about 217 customers in Woodson, and 273 customers in Paint Rock, has also requested that the PUC approve the application of a 6.67% depreciation rate to the storage facilities, which represents an estimated 15-year useful life.
As an alternative to construction of new distribution or transmission lines AEP TNC proposes to install a 1 MW/2 MWh lithium-ion battery to improve system reliability by supplying power to the Woodson area during outage and overload situations. Similarly, the PUC added, as an alternative to upgrading a substation, the company proposes to install a 500 kW/1,000 kWh lithium-ion battery to alleviate peak overloads in its service for Paint Rock. Both proposed storage facilities would operate below 60 kV, the PUC said.
The PUC said that the case was referred to the State Office of Administrative Hearings (SOAH) on Oct. 13, and that the PUC must provide to the administrative law judge (ALJ) a list of issues or areas to be addressed in any proceeding referred to the SOAH.
After hearing the pleadings submitted by the parties, the PUC said that it identifies certain issues that must be addressed, including:
- Are AEP TNC’s proposed storage facilities considered a utility distribution asset or utility distribution facility under Public Utility Regulatory Act (PURA)? If not, under what circumstances would the storage facilities be considered a utility distribution asset or utility distribution facility under PURA?
- Are AEP TNC’s proposed storage facilities considered a generation asset or generation facility under PURA? If not, under what circumstances would the proposed storage facilities be considered a generation asset or generation facility under PURA?
- Does AEP TNC need to obtain a certificate of convenience and necessity for the proposed facilities under PURA?
AEP TNC is an American Electric Power (NYSE:AEP) company.