California Aims to Enhance Existing DER Storage Goals

In its continuing quest to advance compliance with state legislation governing energy storage practices, the California Public Utilities Commission has told the state’s three largest investor-owned electric utilities – Pacific Gas & Electric Company, San Diego Gas & Electric Company, and Southern California Edison Company – to work toward proposing and investing in programs designed to assure procurement of at least 500 megawatts (MW) of distributed energy resource (DER) storage capacity. The commission’s decision builds on a prior order, issued in 2013, that requires the three utilities to purchase more than 1,000 MW of energy storage capacity by 2020, with connection to the grid no later than 2024.

The commission explained that its latest directive was in line with legislative mandates contained in both Assembly Bill (AB) 2514 and AB 2868. It said that each of those laws reflected California’s aggressive efforts to reduce carbon emissions. Indeed, the commission observed that AB 2514, passed in 2010, had set forth a 2020 storage target of 1,325 MW, divided into three distinct subgroups of transmission-, distribution-, and behind-the-meter-related resources.

The General Assembly then enacted AB 2868 in 2016, which instructs the three utilities to provide for a minimum of 500 MW of DERspecific storage. However, the commission said, AB 2868 does not disturb either AB 2514’s original investment or timeline standards.

That is, the commission clarified, the 500-MW carve-out listed in AB 2868 does not actually expand the 1,325-MW goal prescribed in AB 2514. Rather, it merely requires 500 MW of DER storage as a subset of the overall target. The commission remarked that the 500-MW objective does not pertain to transmissionrelated DERs nor is it subject to the 2020 and 2024 deadlines.

The commission asserted that the energy storage aspects of the laws were intended to optimize grid function, especially with respect to integrating such DERs as wind and solar into utility power systems. The commission noted that California has long had in place energy policies that treat renewable power as a preferred generation resource. It averred that development and utilization of energy storage technologies goes hand-inhand with its efforts to achieve such policy goals.

As to how the commitment to DER storage is to be accomplished, the commission ruled that the 500- MW total should be allocated evenly among the three utilities, such that each will be responsible for 166.66 MW of such storage. The commission also affirmed those provisions in its 2013 energy storage order applicable to community choice aggregators (CCAs) and electric service providers (ESPs). Under those terms, CCAs and ESPs are to procure energy storage capacity that is the equivalent of one percent of their annual 2020 peak load. And, consistent with the time frame established for the utilities, CCAs and ESPs must be capable of connecting that storage with the grid by 2024.

The commission pointed out as well that the updated 500-MW DER storage requirement has no bearing on those resources that it had decided to exclude from the storage procurement program back in 2013. The commission thus confirmed that investments in large pumped-storage projects cannot be used as a means of meeting the storage goals. It reiterated its findings from 2013 that to permit large pumped hydro facilities to participate in energy storage solicitations could inhibit the formation of a level playing field for other, smaller projects.

The commission posited that its exclusion of larger projects demonstrates its commitment to customer-centric, DER-focused energy storage opportunities. Moreover, it stated, its 500-MW storage directive will serve to help mitigate ongoing concerns about both generation-related environmental impacts and electric system reliability. Re Energy Storage Procurement Framework and Design Program, Decision 17-04-039, Rulemaking 15- 03-011, Apr. 27, 2017 (Cal.P.U.C.).