The New York State Public Service Commission (PSC) on May 18 said that it granted permission to Consolidated Edison’s (NYSE:ED) Consolidated Edison Company of New York (Con Edison) to allow battery storage systems to export electricity to the grid, located at a select number of commercial locations, under a program to lower electricity demand in growing areas of Brooklyn and Queens, and under any future non-wires alternative (NWA) projects it pursues.
Under the program, customers will be able to use installed battery storage systems to export power to the electric grid to respond to Con Edison’s calls to reduce peak load conditions in the area, the PSC said.
By relying on non-traditional methods to meet growing energy demand in Brooklyn and Queens, Con Edison has saved ratepayers money by reducing energy demand at peak hours and deferring the construction of a $1bn electrical substation, the PSC said.
As noted in the May 18 order, Con Edison on Feb. 22 filed a tariff amendment to Schedule P.S.C. No. 10 – Electricity to revise General Rule 8.3, “Generating facilities used on an emergency basis for export.”
The tariff amendment would permit the export of electricity discharged by battery storage systems for delivery to the company’s primary or secondary-voltage distribution system at the direction of the company during demand response (DR) events called as part of the Brooklyn/Queens Demand Management (BQDM) Program, the PSC said.
The PSC noted that its order modifies Con Edison’s proposed tariff amendments, allowing for battery export to the company’s primary and secondary distribution system as part of any NWA project. Those amendments will allow the battery storage technologies anticipated to participate in the BQDM DR program for the 2017 and 2018 capability periods to export electricity onto the utility grid when there may be little or no usage at the battery owner’s site during a BQDM DR program event, and provides regulatory certainty to battery storage providers that their products will be allowed to participate in future NWA projects, provided that the company has deemed such export to be safe, the PSC said.
Discussing the tariff filing, the PSC said that Con Edison proposes a revision to General Rule 8.3 to permit the export of electricity discharged by battery storage systems at the direction of the company to its primary or secondary distribution system during demand response events called under the BQDM Program. The company proposes to remove the word “primary” from “primary distribution feeders” and change “distribution feeders” to “distribution system” to permit battery storage systems to export electricity into either Con Edison’s primary or secondary distribution system.
The PSC added that Con Edison also proposes to rename General Rule 8.3 to “Generating facilities used under special circumstances for export” to reflect the expanded scope of the rule in permitting the export of electricity discharged by battery storage systems for the BQDM demand response program.
According to the company, the proposed change is consistent with a similar modification made to General Rule 8.2 last year, permitting the use of emergency generating facilities for self-supply when directed by Con Edison under the BQDM demand response program. The PSC also said that the company asserts that the change to General Rule 8.3 will allow the BQDM Program to be more responsive to developing market needs and customer expectations.
Of comments received on the matter, the PSC said that Tesla Inc., said that while it supports Con Edison’s proposed tariff amendment, it also expressed concern that battery storage systems are not treated equally to other types of DERs under Con Edison’s tariff. According to Tesla, currently, battery storage systems are not eligible to receive compensation from Con Edison through the Service Classification 11 – Buyback Service tariff (SC 11 tariff) in the same way as other DER, such as combined heat and power (CHP) and fuel cells.
The PSC added that Tesla requests, for instance, that the proposed tariff amendments apply more broadly, beyond only allowing battery storage systems to participate in the BQDM DR Program. Specifically, Tesla requests that General Rule 8.3 be expanded to allow batteries to export to Con Edison’s primary and secondary distribution feeders throughout the Con Edison service territory. That would be done at the direction of the New York ISO (NYISO) for participation in the Special Case Resources (SCR) program and Emergency Demand Response Program (EDRP), and at the direction of Con Edison under Rider O – Curtailable Electric Service (Rider O).
The PSC noted that more than half of the BQDM DR Program auction awardees plan to use new technologies, including battery storage, as their primary means of providing demand response. Use of battery storage projects in the BQDM DR Program, hosted at large commercial customer locations, presents a unique situation since there is a mismatch between the peak need hour in the BQDM area, 10 p.m., and the usual usage patterns of the larger commercial customers, many of which use electricity during the day and experience low load conditions at night, the PSC said.
Due to that mismatch, it is likely that those battery storage units will export power onto Con Edison’s distribution system during BQDM DR Program events rather than offsetting a portion of the customer’s load, the PSC said.
Under the current tariff, export of electricity to the company’s primary and secondary distribution system is prohibited except under specific circumstances, including at the direction of the company under Rider O. The PSC added that it is its understanding that the Rider O program has not been used since its inception in 2003, and has become obsolete since overlapping demand response programs are available through Rider T.
“Since battery storage assets are not currently allowed to provide export to the distribution system, and the BQDM DR Program is set to begin operations during the summer of 2017, it is imperative that the company allow for export of battery storage assets in the BQDM DR Program as soon as possible,” the PSC said. “Adoption of the company’s proposed tariff amendment regarding limited exceptions to General Rule 8.3 for battery storage assets in the BQDM DR Program will remove a major barrier to optimal operation of that program.”
Stating that Tesla raises a salient concern that battery storage systems are currently receiving disparate treatment when compared with other forms of DER, the PSC said that customers should be allowed to use battery storage technologies to participate under the same rules as other types of DER in the NYISO SCR program and EDRP, as well as the New York electric utilities’ respective dynamic load management programs, provided it is deemed safe to do so.
Therefore, Con Edison should consider whether the exemption from General Rule 8.3 for the battery storage systems participating in the BQDM DR Program and other NWA projects should similarly apply to the Rider T Commercial System Relief Program (CSRP) and Distribution Load Relief Program (DLRP) system-wide commercial demand response programs, and to customers participating in the NYISO SCR program and EDRP.
The PSC said that it finds that this is an issue that impacts the other New York electric utilities as well. Therefore, Con Edison, Central Hudson Gas & Electric, New York State Electric & Gas, Niagara Mohawk Power d/b/a National Grid, Orange and Rockland Utilities, and Rochester Gas and Electric are directed to study the impacts of allowing distributed energy resources (DERs), including battery storage, participating in their respective CSRP or DLRP to export onto the primary and secondary distribution systems during those programs’ events, and report the results of that analysis as part of their dynamic load management program annual reports, due by Dec. 1.
Among other things, the PSC said that compensation for battery storage technologies and DER other than net energy metering-eligible technologies will be considered in Phase Two of the Value of DER proceeding.