Liberty Utilities, in a petition recently filed with the New Hampshire Public Utilities Commission, requested approval for a pilot program by which the company would buy and install batteries and related equipment for up to 1,000 residential customers with the goals of saving transmission costs and studying other potential system benefits.
The company said that specifically, it is requesting that the commission approve:
- The company’s purchase of up to 1,000 batteries and related equipment to be installed at participating customers’ homes
- A monthly charge on participating customers to defray some of the costs for the battery storage systems
- The inclusion of the company’s investments in rate base in its next rate case filing
- A time-of-use rate for customers who participate in the battery storage pilot
According to the direct testimony of Heather Tebbetts, senior analyst for Liberty Utilities Service Corp., which provides services to Liberty Utilities (Granite State Electric), the rapid adoption of distributed renewable generation, coupled with the reduction in the cost of energy storage, as well as a more informed and technologically proficient consumer presents challenges to the traditional one-way power system that utilities provided in the past.
Historically, electric utilities have functioned as large, vertically integrated, and regulated monopolies that were protected from competition by technological barriers, which prevented cost-effective, customer-sited generation, Tebbetts said, adding that that traditional business model is evolving as technologies change to meet customers’ desires.
Today’s electric customers want more than to simply have safe and reliable electricity service to their homes or businesses, she said, adding that they have a better understanding how the electricity they use is produced, and are interested in environmentally beneficial products and services that reduce their carbon footprint, as well as increase efficiency.
Electric utilities should move beyond simply selling customers more electricity, and must instead understand, as well as support, their customers’ goals of reducing electricity use, managing costs, and obtaining electricity from an array of environmentally friendly sources, Tebbetts said.
Discussing Liberty Utilities’ battery storage proposal, she noted that the company is proposing to own 5 MW of battery storage (nameplate), or about 1,000 batteries, which would be installed in residential customers’ homes. The batteries would provide backup power for the customer, reduce peak demand, and potentially provide voltage and other support services, as needed, she said.
The customer would have access to the battery capacity nearly all the time, except when a peak demand is predicted for the following day. In those cases, she added, the company would control the batteries to ensure that they are charged and ready to be dispatched during the peak period. Participating customers would be required to take service under a time-of-use (TOU) rate, she said.
The near-term goal of the program is to reduce regional and local (RNS and LNS) transmission charges, while the long-term goal is to study the effects of the batteries on the distribution system and the effects on transmission costs, she said.
RNS and LNS transmission charges are based on the coincident peak of the region, she said, noting that the costs of the transmission system do not disappear even as usage may go down due to energy efficiency and solar. As utilities in the surrounding states install those technologies or provide incentives to customers to do so, transmission costs will be allocated to those utilities that do not take the same path, she said.
“If Liberty can proactively avoid the reallocation of transmission costs now, there will be less impact on customers, if any, when other utilities in New England further deploy these technologies and programs,” Tebbetts said.
As part of the pilot program, Liberty Utilities would study distribution effects over the five-year period to determine the extent of the resulting deferral or avoidance of future upgrades to the distribution system, she said.
Liberty Utilities has not chosen a battery supplier or a software platform to aggregate and manage the batteries at this time, she noted.
Discussing a cost range for the pilot program, she said that the recommended battery with the software platform costs is in the range of $7,000 to $9,000, which includes installation and metering.
Of the estimated immediate savings on RNS and LNS transmission costs, Tebbetts said that between July 2016 and June, the company paid $11.55 per kW-month, on a total of 1,830 MW for the 12-month period, for both RNS and LNS. That translates into about $21m paid to ISO New England (ISO-NE) and National Grid for transmission costs, she said, adding that if Liberty Utilities installs the 5 MW of storage, it estimates that usage of the transmission system will be reduced and customers would save about $693,000 a year in transmission costs, based on full utilization of the batteries.
Since the transmission rate is reconciled annually, customers would receive the benefit of lower annual charges paid to ISO-NE and National Grid, thus resulting in lower overall transmission costs for all customers, she said.
She said that the customer would have financial responsibility for the batteries, noting that the customer would sign a contract with Liberty Utilities to use the batteries for 10 years, and requiring them to pay either an upfront contribution towards the cost of the battery, or a monthly fee for the 10 years.
Customers would be allowed to participate in the pilot program even if they do not have solar generation, she said, adding that customers without solar would have the incentive to charge the batteries in the off-peak period when rates are very low, and dispatch the battery during the critical peak period when rates are very high; customers with solar would have the opportunity to do the same.
In fact, she said, customers with solar could choose to charge the batteries overnight via the grid, dispatch during the critical peak period, and export any solar generation to the grid to receive export credit towards their bill for the month; customers may also choose to charge the battery during the on-peak period from the solar installation.
Among other things, she noted that the company would select a vendor in mid-January 2018, while moving through the adjudicative process to get the pilot program approved. Liberty Utilities requests that the commission approve the pilot program by June 30, 2018, with the next steps being to have customers enrolled by Aug. 31, 2018, and battery installations starting around Nov. 1, 2018, Tebbetts said.