California Public Utilities Commission Staff Releases Energy Storage Proposal

The Commission staff issued their staff proposal a few days late in the storage proceeding, but you can find it here. The proposal initially lays out nine categories of energy storage adoption barriers: 1. Lack of definitive operational needs 2. Lack of cohesive regulatory framework 3. Evolving markets and market product definition 4. Resource Adequacy accounting 5. Lack of cost-effectiveness evaluation methods 6. Lack of cost recovery policy 7. Lack of cost transparency and price signals (wholesale and retail) 8. Lack of commercial operating experience 9. Lack of well-defined interconnection process It then offers an energy storage analysis framework: “In order to support the analysis of energy storage issues going forward, CPUC Staff proposes the adoption of an energy storage ‘end use’ framework. This framework will be utilized in a number of future activities, including defining the cost-effectiveness evaluation methods and defining Resource Adequacy value.” The proposal includes a list of 20 “end uses” that energy storage can be used for that staff hopes will be used as a framework for evaluating energy storage:

1 Ancillary services: frequency regulation
2 Ancillary services: spin/non-spin/replacement reserves
3 Ancillary services: ramp
4 Black start
5 Real time energy balancing
6 Energy price arbitrage
7 Resource adequacy
8 Intermittent resource integration: wind (ramp/voltage support)
9 Intermittent resource integration: photovoltaic (time shift,
voltage sag, rapid demand support)
10 Supply firming
11 Peak shaving: off-to-on peak energy shifting (operational)
12 Transmission peak capacity support (upgrade deferral)
13 Transmission operation (short duration performance, inertia,
system reliability)
14 Transmission congestion relief
15 Distribution peak capacity support (upgrade deferral)
16 Distribution operation (Voltage Support/VAR Support)
17 Outage mitigation: micro-grid
18 Time-of-use (TOU) energy cost management
19 Power quality
20 Back-up power

These end uses seem like they may overlap, so a number of parties are likely to argue for their consolidation for fear that stating that all of these end uses confer a unique benefit will ultimately overvalue the benefits of energy storage-- so one thing to look out for. Of interest, staff suggests creating a resource adequacy value for storage in the existing Resource Adequacy proceeding at the commission. While the ALJ has not yet issued a scoping ruling regarding the next procedural steps, parties will get a chance to comment on the staff proposal.  We'll let you know when that procedural schedule is issued.