CAISO Energy Storage Interconnection Initiative

by Latham & Watkins LLP

The California Independent System Operator (“CAISO”) is moving forward with a stakeholder initiative to examine issues with connecting energy storage facilities to the CAISO controlled grid under the CAISO’s existing interconnection rules, and to develop new policies as needed to clarify and facilitate interconnection of energy storage. 

On June 24, 2014, the CAISO posted an Issue Paper and Straw Proposal (“Issue Paper”) outlining the purpose, scope, and schedule of its energy storage interconnection initiative. The Issue Paper explains that the unique characteristics of energy storage—its ability to behave as either a generator or load (or negative generator), and quickly switch between these two modes—may not align well with the CAISO’s existing interconnection process, which was designed to accommodate requests to connect traditional generators. The Issue Paper outlines a number of issues for stakeholder consideration, including:

  1. Interconnection Study Process
  2. Modification Request Process
  3. Independent Study Process Behind-the-Meter (ISP-BTM) Expansion Process
  4. Deliverability Study Methodology

The Issue Paper also describes how the CAISO is working with interconnection customers who submitted storage projects into the Cluster 7 window for generation interconnection applications in April 2014. The Issue Paper states that interconnection and study procedures will apply the existing Generator Interconnection and Deliverability Allocation Procedures (“GIDAP”) to the extent possible, while refining the approach to storage to develop and propose improvements for Cluster 8. The Issue Paper provides that the existing GIDAP rules should be particularly well suited to storage facilities that wish to be treated as a generator for both charging (negative output) and discharging (positive output), but the GIDAP rules will not apply to the situation where a storage facility wants the flexibility to charge at any time (i.e., comparable to firm load service with a low risk of being subject to possible curtailment).

The Issue Paper proposes a framework for differentiating between energy storage configurations that may participate in the CAISO market. The three categories are (1) CAISO grid-connected storage, (2) distribution-connected storage, and (3) customer-sited storage. Each category, and corresponding subcategories, may pose unique interconnection issues and thus merit special consideration through the energy storage interconnection stakeholder initiative.

The CAISO’s energy storage interconnection initiative is in part motivated by Federal Energy Regulatory Commission (“FERC”) Order No. 792, which revised FERC’s Small Generator Interconnection Procedures and Small Generator Interconnection Agreement to expressly include storage devices, and by a recent California Public Utilities Commission (“CPUC”) order establishing procurement targets for energy storage. The Issue Paper reports that the CPUC procurement targets triggered interconnection requests for more than 2,000 MW energy storage interconnection requests in the CAISO’s Cluster 7 application window, comprised of approximately 1,669 MW of stand-alone battery storage, 44 MW of other stand-alone storage, approximately 255 MW of battery storage combined with generation, and a 90 MW combined PV/battery storage project. (The Issue Paper further reports that an additional amount of interconnection requests of energy storage were submitted through the distribution interconnection processes of the CAISO’s participating transmission owners.)

The Issue Paper also notes a number of issues that are not within the scope of the energy storage interconnection initiative. For example, the Issue Paper specifically mentions rate treatment for energy storage charging, energy storage as a non-transmission alternative, metering/telemetry rules, and market design. Indeed, the Issue Paper acknowledges the need for a more comprehensive energy storage roadmap, and states that the CAISO is partnering with the CPUC and California Energy Commission to develop and produce such a roadmap by the end of 2014.

Stakeholders have until July 15 to comment on this version of the Issue Paper. The full schedule for the stakeholder process is provided below.

Stakeholder Process Schedule



Post Straw Proposal

June 24

Stakeholder Teleconference

July 1

Stakeholder Comments Due

July 15

Post Revised Straw Proposal

August 5

Stakeholder Meeting

August 12

Stakeholder Comments Due

August 26

Post Draft Final Proposal

September 16

Stakeholder Conference Call

September 23

Stakeholder Comments Due

October 7

Board of Governors Approval

November 13-14


Written by:

Latham & Watkins LLP

Latham & Watkins LLP on:

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