California PUC comments on energy storage legislation

The following story was submitted by law firm Stoel Rives (http://www.stoel.com/)
The California Public Utilities Commission’s (CPUC) workshop on its implementation of California’s recent energy storage bill, Assembly Bill (AB) 2514. The bill requires the CPUC and municipal utilities in California to open proceedings by March 1, 2012 to determine appropriate targets for the procurement of cost-effective energy storage systems by load-serving entities. By October 1, 2013, the CPUC must determine whether a procurement target for energy storage is appropriate and, if so, adopt a procurement target for each load-serving entity under its jurisdiction to be achieved by December 31, 2015 and a second target to be achieved by December 31, 2020. Municipal utilities have an additional year to meet these requirements.

Rather than delay implementation of AB 2514, the CPUC moved to initiate the required proceeding. Last December, the CPUC opened Rulemaking 10-12-007 both to implement AB 2514 and “on [the CPUC’s] own motion to initiate policy for California utilities to consider the procurement of cost-effective energy storage.” Order Instituting Rulemaking (“OIR”) at 1, R.10-12-007.

The benefits of energy storage noted in both the legislation and the OIR include optimizing the use of intermittent and off-peak renewable generation and providing ancillary services currently provided by gas-fired peakers and other fossil fuel generation. The OIR did not set out the scope of the proceeding. Rather, the CPUC requested that parties including Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric file comments in January on the factual and legal issues to be addressed in the proceeding, and directed CPUC staff to hold a workshop to address the potential scope of the proceeding during the first quarter of 2011.

Twenty-one parties filed comments by the January 21 deadline, and the workshop was held in March. Over 100 people participated in the workshop person in person with another 50 by phone. The workshop included discussions of current and emerging energy storage technologies, the goals and applications of energy storage, existing barriers to storage implementation, and whether a unified storage policy would work or whether the policy should be written to address specific barriers to entry.

The workshop also considered how the CPUC could and should work with other agencies addressing energy storage or related issues, including the California Energy Commission, the California Independent Operator, and the Federal Energy Regulatory Commission. The CPUC will use the information gathered from comments and workshop to prepare a scoping memo for the proceeding, setting out the issues to be covered in the proceeding and establishing a procedural schedule. Prior to issuing the final scoping memo, the CPUC will hold a prehearing conference, likely sometime in mid-April, to address scoping and scheduling issues.

Stoel Rives participated in the March workshop. Its attorneys have been tracking AB 2514 in California as well as electric energy storage (EES) developments in other states. Questions about the CPUC’s implementation of AB 2514 or how other developments in EES may impact business, can be addressed to:
Seth Hilton (sdhilton@stoel.com) or William Holmes (whholmes@stoel.com).
Stoel Rives LLC
http://www.stoel.com/