The Public Utility Commission (PUC) of Oregon, in a Dec. 28, 2016, order, adopted requirements relating to the system-wide storage potential evaluation required by House Bill (HB) 2193, which requires subject electric companies to submit proposals to develop energy storage systems and to procure any authorized projects by 2020.
The PUC noted that HB 2193 directs large Oregon electric companies – Portland General Electric and PacifiCorp d/b/a Pacific Power – to submit proposals for qualifying energy storage systems with the capacity to store at least 5 MWh of energy. The bill caps the total capacity of the systems procured by each electric company at 1% of the company’s peak load in 2014, with an exception for a project of statewide significance, staff said, adding that the electric companies must submit system proposals by Jan. 1, 2018.
According to HB 2193, each proposal must be accompanied by a comprehensive evaluation of the potential to store energy in the electric company’s system, including an analysis of operations and system data, examination of how storage would complement the electric company’s existing action plans, and identification of areas with opportunity to incentivize energy storage. The PUC also noted that the bill outlines specific information and analysis to be provided in the proposal, including technical specifications for the project, the estimated cost, and the benefits to the electric company’s system.
After the proposals are submitted, HB 2193 requires that the PUC evaluate each proposal to determine whether it is consistent with the guidelines; reasonably balances the value for ratepayers and utility operations and the costs of construction, operation and maintenance; and is in the public interest.
To help the electric companies assess potential projects, HB 2193 directs the PUC to adopt guidelines for submitting proposals, the PUC added.
The PUC said that in the order, it adopts:
- Project guidelines to help the electric companies design and select projects to propose for development
- Proposal guidelines for the electric companies to use in submitting their formal proposals
- Storage evaluation requirements to help the electric companies conduct the mandated system-wide storage potential evaluation
- Competitive bidding requirements to apply to bidding HB 2193 programs
HB 2193 specifies that the electric companies may recover in rates all costs prudently incurred in procuring qualifying systems under the program, the PUC said, adding that later in 2017, it will provide further guidance on the process and timeline for reviewing proposals and making cost-recovery determinations.
The PUC said that it encourages the electric companies to submit multiple, differentiated projects that test varying technologies or applications, to use a request for information (RFI) to identify qualified vendors and technologies, and to use established models to estimate the value of energy storage applications.
Among other things, the project guidelines note that:
- Electric companies are encouraged to submit a portfolio of projects that balance technology maturity, technology potential, short- and long-term project performance and risks, and short- and long-term potential value
- Electric companies are encouraged to submit projects that are strategically located to help defer or eliminate the need for system upgrades, provide voltage control or other ancillary services, or supply some other location-specific service that will improve system operation and reliability
- Electric companies are encouraged to use established models – such as the Pacific Northwest National Laboratory’s Battery Storage Evaluation Tool or the Electric Power Research Institute’s Energy Storage Valuation Tool – to estimate the value of energy storage applications
The proposal guidelines note, for instance, that each proposal must include the following description and analysis of each proposed project:
- Technical specifications for each project, including the capacity of the project to store energy, including the amount of energy the project can store and the rate at which it can respond, charge and discharge, as well as any other operational characteristics needed to assess the benefits of the energy storage system
- The estimated cost of each project, including the project’s estimated capital cost
- The benefits of each project to the electric company’s electric system, including projected in-state benefits to the electric system
The PUC noted that it made four changes to proposed guidelines, including to clarify that when explaining why they selected a particular project, that electric companies should include findings from any RFI and the system-wide storage potential evaluation, and identify any criteria used to select projects, as well as explain how the criteria were applied.
Storage potential evaluation requirements that the PUC adopted note, among other things, that:
- Staff will convene workshops to develop a framework for the electric companies’ evaluations, with staff presenting the agreed-upon framework to the PUC at a special public meeting by March 31
- The electric companies will prepare and file with the PUC draft evaluations by June 1
- The PUC will hold a special public meeting by July 31 for informal input from the PUC and stakeholders on the draft evaluations
The PUC noted that it made three changes to proposed evaluation requirements, including to clarify that the March 31 deadline for a framework is not intended as the end of discussions; if parties agree that work remains, they may continue with further workshops to resolve outstanding issues.
Among other things, the PUC said that competitive bidding requirements that it adopted note, for instance, that an electric company may award a contract for a project without competition if it determines and presents justification that only a single vendor or contractor is capable of meeting the project’s requirements.