The Colorado Public Utilities Commission, in a decision with an adopted date of Nov. 28 and a mailed date of Dec. 12, adopted “Rule 4 Code of Colorado Regulations 723-3,” which involve energy storage.
As noted in the decision, Colorado Gov. John Hickenlooper in June signed into law House Bill (HB) 18-1270, or the "Energy Storage Procurement Act,” which took effect on Aug. 8.
The Act requires that by Feb. 1, 2019, the commission establishes, by rule, as part of the planning process, mechanisms for the procurement of energy storage systems by electric utilities, the commission said in its decision.
According to the adopted rule, no later than April 30 of each year, each electric utility and each cooperative electric association that has voted to exempt itself is to file with the commission its proposed new construction or extension of transmission facilities for the next three calendar years, beginning with the year following the filing. The filing is to contain such information as the alternatives considered by the utility in its transmission planning process, including consideration for energy storage systems, the adopted rule noted.
The commission said in its decision that it made the proposed rules available to the public through its electronic filings system, and that it held a public comment hearing en banc on Oct. 23.
Discussing the intent of the Act, the commission said that it finds that the language of the Act mandates consideration for energy storage systems not only in the electric resource plan (ERP) process, but in other planning processes as well. As some of the commenting parties recognized, the Act affects planning processes for acquisition of supply-side utility-scale resources, transmission facilities, and distribution facilities, the commission said.
Of generation, transmission, and distribution planning rules, the commission said that it does not currently treat all electric facilities alike from the perspective of planning and procurement. The commission said that in the case of electric distribution, it established in Rule 3207(a) that the expansion of distribution facilities is deemed to be in the ordinary course of business. As a result, it has not established requirements for either planning or procurement activities.
The commission added that in the case of electric supply side resources, it has implemented Rules 3600 through 3619 for system resources; Rule 3656 for eligible energy resources; and Rule 3665 for community solar garden resources – together, those rules provide requirements for planning and procurement processes.
The commission noted that in the case of electric transmission, it has implemented Rules 3625 through 3627, which provide reporting requirements for electric transmission planning, but no procurement requirements for transmission facilities.
Rules 3205 through 3207 specify the basic requirements for the construction or expansion of generating capacity, transmission facilities, and distribution facilities. The purpose of those rules, the commission added, is to inform the commission of the utility’s proposed new construction or expansion of generation and transmission for the next three calendar years and to provide sufficient information to determine whether a certificate of public convenience and necessity is required. As such, those rules address elements of the planning process.
The commission also said that Rules 3600 through 3619 clearly establish requirements for planning and procurement or acquisition of supply-side system resources for meeting utility needs, while Rules 3625 through 3627 establish requirements for a coordinated electric planning process that is to be conducted on a comprehensive, transparent, and statewide basis.
The commission said that it finds that Rules 3206 and 3207 are the appropriate rules for incorporation of requirements for utility consideration of energy storage systems in utility planning processes for electric distribution and transmission facilities.
To that end, the commission said, a new rule – 3206(d)(I)(D) – will be promulgated requiring that utilities consider energy storage systems alongside other alternatives in the transmission planning process.
Similarly, an additional requirement will be added to Rule 3207(a) requiring that where appropriate, utilities consider energy storage systems in their planning processes as an alternative to expansion of distribution facilities. To increase transparency and allow the commission to better determine whether that mandate is properly implemented, each utility is to file with the commission a report detailing how it has complied with Rule 3207 paragraph (b) for the preceding calendar year.
The commission also said that considering the comments filed in the proceeding and the rules governing the ERP process as a whole, it finds that specific ancillary service costs and benefits are more appropriately addressed in Phase I of the ERP proceeding. The commission noted that as a result, it will not adopt language related to specific ancillary services.
Among other things, the commission said that subject “to a filing of an application for rehearing, reargument, or reconsideration, the opinion of the” Colorado attorney general is to be obtained regarding constitutionality and legality of the rules as finally adopted. A copy of the final, adopted rules is to be filed with the Office of the Secretary of State, the commission said, adding that the rules adopted by its decision are to be effective 20 days after publication in The Colorado Register by the Office of the Secretary of State.