Energy Storage Technology: UTC Issues New Policy Statement
October 16, 2017 posted by Eric Christensen
On October 11, the Washington Utilities and Transportation Commission ("UTC") issued a new policy statement aimed at improving the regulatory treatment of energy storage technology. The policy arises from the UTC's view that expanding energy storage is critical to achieving long-standing Washington policy to expand renewable generation and to decarbonize the grid. In addition, the policy identifies energy storage, and the flexibility it brings to grid operations, as an important economic asset for utilities responding to the tectonic policy and technological changes that are transforming the industry.
The new policy emerged from a 2015 staff paper and a lengthy rulemaking process. The policy is aimed at improving the treatment of energy storage in Washington's Integrated Resource Planning ("IRP") process and also sets forth guidance concerning the regulatory treatment of energy storage.
To better integrate energy storage into the IRP process, the policy directs Washington's regulated utilities to improve their planning models by adopting sub-hourly planning, which will better capture the benefits of storage than the hourly models that have been used in past IRP cycles. In addition, utilities are directed to consider a variety of storage technologies and to undertake acquisition of storage through competitive bidding processes.
In addition, the policy makes clear that utilities must integrate energy storage into the process of expanding their asset base. Because storage may produce benefits that flow across the lines that traditionally divide generation, transmission, and distribution, utilities will be required to demonstrate that they considered storage alternatives as an element of prudency review.
The policy can be expected to produce robust opportunities for energy storage producers as utilities and the UTC implement the policy in future IRP and asset acquisition processes.