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California Requires 50MW of Energy Storage for Local Capacity Requirements

April 10, 2013

The California Public Utilities Commission (CPUC) unanimously approved a long-term procurement decision ordering Southern California Edison (SCE) to procure between 1,400 and 1,800 megawatts of energy resource capacity in the Los Angeles basin to meet long term local capacity requirements by 2021. Of this amount, at least 50 MW is required by the CPUC to be procured by SCE from energy storage resources, as well as up to an additional total of 600MW of capacity required to be procured from preferred resources - including energy storage resources.

Under the CPUC’s final decision approved today, energy storage resources must be considered “along with preferred resources” including energy efficiency, demand response and distributed generation, consistent with the clean energy resource procurement priorities embodied in California’s Energy Action Plan. Janice Lin, Executive Director of the California Energy Storage Alliance (CESA) and Managing Partner of Strategen Consulting, LLC, said that “this landmark decision represents a major breakthrough for energy storage market development in California and nationwide.” According to Lin, “required energy storage procurement under this decision provides a much needed market signal that energy storage will be considered as a key asset class to help California address its long term local reliability needs.”

In his introduction before the dais, Commissioner Michel Peter Florio, the Assigned Commissioner responsible for the CPUCs long-term procurement planning rulemaking, expressed the rationale for the “monumental” decision during the CPUC’s discussion, stating “we need to move beyond paralysis by analysis with respect to energy storage.” The decision will have immediate impact as SCE is directed to file an Application for each local reliability area seeking approval of contracts by late 2013 or early 2014.

With clear CPUC momentum on its progressive clean energy policies, California is quickly becoming a leader for energy storage in the United States. In addition, Assembly Bill 2514 enacted in 2010, is widely hailed as landmark energy storage legislation for the nation. AB 2514 requires the CPUC to establish appropriate 2015 and 2020 energy storage procurement targets for California load serving entities, if cost effective and commercially viable by October 2013. Implementation of AB 2514 is already well underway at the CPUC via the Energy Storage Rulemaking (R.10-12-007).

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