Energy Storage

In response to increased State goals and targets to reduce greenhouse gas (GHG) emissions, meet air quality standards, and achieve a carbon free grid, the California Public Utilities Commission (CPUC), with authorization from the California Legislature, continues to evaluate options to achieve these goals and targets through several means including through energy storage procurement. The following provides information on California energy storage legislation, the CPUC energy storage program and projects evaluation, CPUC energy storage proceedings, current energy storage procurement, and previous activities.

Energy Storage Legislation

In 2010, the California Legislature authorized the CPUC to evaluate and determine energy storage targets, if any, for the State Load Serving Entities (LSEs) through Assembly Bill (AB) 2514 (Skinner, 2010). In 2013, the CPUC issued Decision (D.)13-10-040 which set an AB 2514 energy storage procurement target of 1,325 megawatts (MW) by 2020.

The CPUC's energy storage procurement policy was formulated with three primary goals:

Grid optimization, including peak reduction, contribution to reliability needs, or deferral of transmission and distribution upgrade investments;
Integration of renewable energy; and
Greenhouse gas (GHG) reductions in support of the State's targets.

Assembly Bill 2868 (Gatto, 2016) required the three IOUs to propose programs and investments to accelerate the deployment of distributed energy storage systems with the total capacity not to exceed 500 MW. In 2017, the CPUC issued D.17-04-039 which required the three major IOUs in the State to propose programs and investments to adopt up to 166.66 MW of distributed energy storage systems into their 2018 AB 2514 energy storage procurement plans. On July 5, 2019, the CPUC issued D.19-06-032 which approved PG&E's behind the meter (BTM) thermal energy storage program proposal to comply with AB 2868. This Decision determined that PG&E's remaining application proposal and the application proposals from San Diego Gas and Electric Company's (SDG&E) and Southern California Edison (SCE) did not comply with AB 2868 and thus rejected these proposals.

Senate Bill (SB) 801 (Stern, 2017) to address the electric system limitations that resulted from the reduced gas deliverability at the Aliso Canyon natural gas storage facility, SB 801 requested that the Los Angeles Department of Water and Power in coordination with the City of Los Angeles consider cost-effective and feasible solutions to procure a minimum of 100 MW of energy storage. It also requested the CPUC to direct an electrical corporation serving the Los Angeles Basin to procure through a competitive solicitation a minimum of 20 MW. Resolution E-4937 approved SCE's energy storage solicitation to comply with SB 801.

Energy Storage Procurement to Date

To date the CPUC has approved procurement of more than 1,533.52 MW of new storage capacity to be built in the State. Of this total 506 MW are operational. The AB 2514 mandate is procured in three distinct grid domain targets, with some flexibility between the grid domain targets of customer sited, distribution-connected, and transmission connected. Cumulatively, the three major IOUs have exceeded the AB 2514 target of 1,325 MW and satisfied nearly all domain-specific requirements. See the table below for more details.

Energy Storage Procurement Evaluation

CPUC Decision D.13-10-040 requires CPUC staff to conduct a comprehensive program evaluation of the CPUC energy storage procurement policies and AB 2514 energy storage projects. The final study, conducted by Lumen Energy Strategy, was released on May 31, 2023. The final study and its appendices are posted below:

Background: On March 10, 2020 the CPUC Contracts' Office posted the CPUC energy storage program and projects evaluation Request for Information (RFI) which included: the desired scope of work, timeline and contractor requirements for comment by April 10, 2020 on calprocure. CPUC staff received comments on the RFI and updated the RFP for release. More information on the energy storage program and projects evaluation RFP can be access at Cal eprocure. The energy storage program and projects evaluation Bidders' Library can be accessed here. The CPUC engaged Lumen Energy Strategy, LLC to conduct the study. Study materials, including information on stakeholder engagement and workshops, can be found at www.lumenenergystrategy.com/energystorage.

Scaling Up and Crossing Bounds

This study builds upon the previous study released on May 31, 2023 with additional analysis of the performance of energy storage resources participating in the CAISO marketplace in 2022 and 2023. In addition, opportunities and challenges in the development of energy storage resources were explored to provide services to the distribution system, to customers and to their communities. The goal of the study is to build a record of data-driven cross-domain MUA case studies which demonstrate the benefits and challenges to an energy storage resource's ability to provide services both to (a) customers or the local distribution system, and (b) the bulk (wholesale) grid. The study is posted below:

Scaling Up And Crossing Bounds: Energy Storage in California

Energy Storage Proceedings

R.10-12-007: In December 2010, the CPUC opened a Rulemaking to set policy for California Load Serving Entities (LSEs) to consider the procurement of viable and cost-effective energy storage systems in response to AB 2514. This rulemaking identified energy storage end uses and barriers to deployment, considered a variety of possible policies to encourage the cost-effective deployment of energy storage systems, including refinement of existing procurement methods to properly value energy storage systems. This rulemaking resulted in two CPUC Decisions, which are:

(1) D. 12-08-016, which adopted the proposed Framework for Analyzing Energy Storage Needs (see D. 12-08-016 Appendix A) and

(2) D.13-10-040 which established an energy storage procurement target for the three California Investor Owned Utilities (IOUs) and an energy storage procurement framework. The procurement target was set at 1,325 megawatts (MW) to be divided amongst Pacific Gas and Electric Company (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E). This procurement target was set for implementation by 2020, with installations no later than the end of 2024. D.13-10-040 also required Community Choice Aggregates (CCAs) and Energy Service Providers (ESP) to procure energy storage equal to 1 percent of their annual 2020 peak by 2020.

R.15-03-011: On April 2, 2015, the California Public Utilities (CPUC or Commission) opened an Order Instituting Rulemaking (OIR) in response to the enactment and ongoing implementation of legislation Assembly Bill 2514 (Skinner, Stats.2010 - Ch. 469) and to continue to refine policies and program details, which established the Energy Storage Procurement Framework and Program and approved the utilities' applications in implementing the program. This rulemaking considers recommendations included in the California Energy Storage Roadmap, an interagency guidance document which was jointly developed by the California Independent System Operator, the California Energy Commission (CEC) and the CPUC. This rulemaking resulted in D.18-01-003, a decision on multiple-use application (MUA) issues, which developed eleven rules to support MUAs for energy storage. These rules apply to the IOUs 2018 energy storage solicitations.

Other Energy Storage Related Rulemakings

R. 11-09-011: This rulemaking reviewed the rules and regulations governing interconnecting generation and energy storage resources to the electric distribution systems. This review resulted in CPUC D. 12-09-019 which updated Electric Rule 21 Interconnection tariff for the modern era.

R. 13-12-010: This rulemaking determined that energy storage can meet local and system capacity requirements

R. 14-08-013: This rulemaking determined that energy Storage may be included as a distribution upgrade deferral asset.

R.14-10-010: This rulemaking determined that energy storage's ramping attributes can provide flexible capacity.