Energy Storage:
Procurement Framework and Design Program

Background

The CPUC opened a Rulemaking in December 2010 to implement provisions of AB 2514 (PU Code 2835 - 2839). In 2012 the CPUC issued a Decision establishing guidelines for the development and deployment of Energy Storage in California:  

  • Review, analyze, and establish, if appropriate, opportunities throughout California’s electricity system.  
  • Remove or lessen any barriers.  
  • Review and weigh the associated costs and benefits. 
  • Establish how costs and benefits should be distributed. 

On October 17, 2013, the CPUC issued a final Decision adopting an Energy Storage procurement framework and design program that ordered:  

  • Edison, PG&E, and SDG&E should procure a total capacity of 1325 megawatts (MW) by 2020 at an estimated cost of $1-3 billion.  
  • Installations should occur no later than 2024, with the first procurement period beginning in 2014.  
  • Procurement should increase incrementally in the 2016, 2018, and 2020 procurement periods.  
  • MWs under contract after 2010, and operational by 2024, will count towards the Energy Storage target.  
  • Procurement may shift between targets for transmission-connected and distribution-connected domains, but not to or from the customer-sided applications. 
  • Pumped hydro projects sized at 50 MWs or larger may not be applied to capacity targets. 
  • Development of a consistent evaluation protocol for benchmarking and reporting cost effectiveness.   

The Decision also set forth definitions of Energy Storage and types of eligible storage. The CPUC directed the electric utilities to develop Energy Storage Procurement Plans through a biennial approval process, starting in 2014 with the first plan to be submitted by March 1, 2014.              

  

ORA's Policy Position

ORA supports the advancement of emerging technologies such as Energy Storage. In this proceeding ORA advocated for cost-effective storage strategies that have benefit for ratepayers, who support this program.  Although the CPUC’s final decision did not adopt all of our recommendations, ORA advocated for specific program criteria to ensure program success: 

  • Allow projects to count toward Energy Storage goal upon CPUC contract approval, to avoid significant time lag, 
  • Allow shifting of procurement across all domains to ensure program is targeting needs and maximizing value. 
  • Require the utilities to submit a formal application to ensure due process and to gain greater expertise in nascent Energy Storage technology. 
  • Count procurement from all energy storage projects, such as the Long Term Procurement Plan, towards all their target goals, to prevent double procurement.  
  • Initiate a new phase to develop cost-effectiveness criteria and common evaluation protocols in order to establish Energy Storage value and assess program success 
  • Provide guidance on market transformation criteria in order to evaluate whether program goals are achieved. 
  • Require Utilities to report cost-effectiveness to demonstrate responsible procurement decisions.   

ORA also supports involving a wide variety of stakeholders in developing a consistent evaluation protocol for benchmarking. 

See ORA’s September 23, 2013 Opening Comments. 

See ORA’s September 30, 2013 Reply Comments.   

 

Proceeding Status

See the Proceeding docket.