Oregon ALJ Signs Off on Ground Rules For Energy Storage

The Public Utility Commission of Oregon, in compliance with HB 2193 – a state measure passed in June 2015 that directed the Commission to develop energy storage guidelines by January 1, 2017 –approved competitive bidding requirements and project ground rules on December 28 (Order No. 16-504).

That order was then signed by Chief Administrative Law Judge Michael Grant (Order No. 17-001) on January 5.

Background

HB 2193 directed large Oregon electric companies – Pacific Power and Portland General Electric – to submit proposals for qualifying energy storage systems with the capacity to store at least 5 MWh of energy. The bill capped the total capacity of the systems procured by each utility at one percent of the company’s peak load in 2014, with an exception for a project of statewide significance.

According to the PUC, “After the proposals are submitted, HB 2193 requires that we evaluate each proposal to determine whether it is: (a) consistent with the guidelines; (b) reasonably balances the value for ratepayers and utility operations and the costs of construction, operation, and maintenance; and (c) is in the public interest….. HB 2193 also states that we may prescribe competitive bidding guidelines.”

Guidelines

Under the new order, utilities will be allowed to recover the costs of projects from ratepayers and will be able to propose projects through 2020.

Under the guidelines, the utilities are encouraged to submit:

  1. Multiple projects with an aggregate capacity close to the full one percent of 2 0.14 peak load allowed by HB 2193;
  2. A range of projects that are differentiated by use case, application, or other differentiating factor;
  3. A portfolio of projects that balance technological maturity, technological potential, short- and long-term project performance and risks, and short- and long-term potential value;
  4. Projects that can serve multiple applications;
  5. Projects that are strategically located to help defer or eliminate the need for system upgrades, provide voltage control or other ancillary services, or supply some other location-specific service that will improve system operation and reliability;
  6. Qualified vendors and viable energy storage technologies through a Request for Information (RFI) process; and
  7. Established models —such as, but not limited to, the Pacific Northwest National Laboratory’s Battery Storage Evaluation Tool or the Electric Power Research Institute’s Energy Storage Valuation Tool — to estimate the value of energy storage applications. Models must be transparent and auditable.

The utilities also must delineate what they expect the system to cost; and will be asked to list the benefits of each project at the local, state, and system level.

A special public meeting will be held on or before March 31 to establish which use cases for storage are deemed appropriate.

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