California Public Utilities Commission Continues Momentum for Energy Storage by Adopting a 1,325 MW Energy Storage Procurement Target by 2020

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On October 17, 2013, the California Public Utilities Commission (CPUC) approved a decision adopting energy storage resource procurement targets for California’s three largest investor owned utilities – Pacific Gas and Electric Company, Southern California Edison Company and San Diego Gas & Electric Company (collectively, IOUs) – as well as the state’s retail electric service providers and community choice aggregators.

The Decision continues a number of legal, regulatory and policy efforts in California to encourage the development and growth of energy storage technologies and markets. In 2009, the CPUC added advanced energy storage projects to the technologies eligible for Self-Generation Incentive Program payments. The Decision implements a 2010 state law known as Assembly Bill 2514 (AB 2514) that required the CPUC to consider whether to adopt targets for the procurement of “viable and cost-effective energy storage systems,” defined as “commercially available technology that is capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy.” (Cal. Pub. Util. Code §§ 2835, 2836). AB 2514, which was sponsored by Gov. Jerry Brown when he was the attorney general for the state of California, also requires the state’s publicly owned utilities to consider adoption of energy storage procurement targets. Gov. Brown’s June 2010 Clean Energy Jobs Plan called for adding approximately 3,000 MW of energy storage to the grid to meet peak demand and support renewable energy generation. In addition, in March 2013, the CPUC required Southern California Edison Company to procure a minimum of 50 MW of energy storage to meet local reliability needs created by the shutdown of the San Onofre power plant.

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