The Public Utility Commission of Oregon, in an order entered on Sept. 4, adopted a stipulation outlining an agreed approach to the development of two energy storage projects by PacifiCorp, d/b/a Pacific Power.
As noted in the order, House Bill (HB) 2193 requires PacifiCorp to submit to the commission a proposal to develop energy storage systems and procure any authorized projects by Jan. 1, 2020. The storage systems must have the capacity to store at least 5 MWh of energy, and the total capacity acquired may not exceed 1% of an electric company’s peak load in 2014, unless a project has statewide significance. The order added that HB 2193 also requires that each energy storage proposal be accompanied by the electric company’s evaluation of storage potential in its system.
PacifiCorp last December filed its initial application for a draft storage potential evaluation and storage projects, which outlined how the company proposed to use the evaluation to create energy storage project proposals. The order also said that the company in April filed its final energy storage system project proposals and energy storage potential evaluation.
The stipulation and joint supporting testimony were filed in July by PacifiCorp, commission staff, and the Oregon Citizens’ Utilities Board (CUB). The order added that the stipulation modifies in part the storage proposals and storage potential evaluation as originally filed by PacifiCorp.
The stipulation requires the company to file an annual update on the progress of the pilot projects, a comprehensive evaluation of the projects after three years of operation, and another comprehensive evaluation at the end of the sixth year of operation.
The order also noted that the stipulation notes that the commission may direct PacifiCorp to include additional data, topics, or other information in the update. As part of the update, the company will provide a quantitative review of the costs and benefits of “Project #1” relative to all other PacifiCorp energy storage system (ESS) projects, the order said.
Discussing Pilot Project #1, the order noted that for that project, PacifiCorp will partner with a single customer to study distributed storage applications alongside a blend of renewable and conventional generation to identify uses for storage with the PacifiCorp network. The project has two phases, with “phase one” objectives including:
- The study of ancillary services and validation of models through test data
- The testing of system integration for future deployment
- The development of operational experience in energy storage controls and optimization
- Review of research opportunities
The order added that “phase two” of the project, which the company expects to begin in 2023, will include these additional objectives:
- Integration of additional storage
- Review of tariff structure, ownership models, and interconnection issues
- Continued research opportunities
The order noted that PacifiCorp will progress to the second phase of the project based on such criteria as the successful deployment, integration, and operation of phase one; successful validation of anticipated in-service capital spending; and continued support from the identified partner.
The stipulation caps costs that will be recoverable from ratepayers at $3m for phase one, and $1.5m for phase two. The order added that all costs will be subject to standard prudence review. The parties to the stipulation agree that the minimum ESS capacity/energy for phase one will be 2 MW/6 MWh and phase two will be 800 kW/1 MWh. The company confirmed in the stipulation that operations and maintenance (O&M) costs will not be capitalized, the order added.
Discussing Pilot Project #2, the order said that PacifiCorp will provide financial assistance for up to four energy storage installation projects that will seek to support community resiliency while also providing benefits to the utility as identified through technical assistance, which will be in the form of an expert consultant that will provide limited on-site technical assistance and engineering analysis to select facilities critical for emergency response or disaster recovery for resiliency focused storage projects.
PacifiCorp will review a series feasibility and utilization criteria to determine whether or not a specific project should be supported.
The order added that the stipulation commits PacifiCorp to file a revised plan for Pilot Project #2 after selecting a technical assistance concept consultant and completing a limited number of initial studies. The stipulation limits cost recovery for that portion of the project to no more than $200,000, the order said, adding that the revised plan will estimate costs, benefits, and anticipated learnings associated with Pilot Project #2. In the stipulation, staff agrees to make a best effort to provide a recommendation on approval of the plan to the commission at a public meeting, the order said.
The order also noted that the stipulation commits the company to file a detailed written explanation of a plan to improve its energy storage modeling capability to estimate all of the energy storage benefits as directed in previous commission orders. PacifiCorp will file an energy storage evaluation plan within 90 days from commission approval of the stipulation. In the stipulation, the order added, staff agrees to make a best effort to provide a recommendation on approval of the evaluation plan to the commission at a public meeting. PacifiCorp will include newly estimated benefits along with all costs associated with ESS pilots in a filing in docket UM 1857 to be made by June 3, 2019, the order said.
Noting that no party has filed an objection to the stipulation, the commission said in its order that it finds that each ESS proposal is consistent with adopted guidelines; reasonably balances the value for customers of storage, as well as the costs and benefits of the installations; and is in the overall public interest.