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Texas PUC Issues Questions For Stakeholders On TDUs' Use Of Storage, Non-Traditional Tech. For Delivery Service

October 3, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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The Public Utility Commission of Texas has issued a list of questions for stakeholder comment in Project No. 48023: Rulemaking to Address the Use of Non-Traditional Technologies in Electric Delivery Service

Among other things, the questions, listed below, ask about the impact on wholesale price formation and the accounting for any storage-related energy in the wholesale market, without using UFE

The questions are:

1. Apart from energy storage, what non-traditional technologies could provide a potential cost-effective solution to reliability issues on a utility's transmission or distribution system?

2. Can a transmission and distribution utility (TDU) legally own a non-traditional technology device, including energy storage equipment and facilities, to support reliability on its system, without a specific exemption in the Public Utility Regulatory Act? If so, under what legal authority could a TDU own such a device?

3. How should any energy necessary for TDU implementation of a non-traditional technology device be measured and accounted for within the ERCOT market, without using Unaccounted for Energy (UFE)?

4. In which situations and scenarios would it be appropriate for a TDU to deploy a non-traditional technology device for the purpose of supporting reliability on its transmission or distribution system?

5. Should a Certificate of Convenience and Necessity (CCN) or other commission pre-approval process be required before the construction or procurement of utility-owned devices that use non-traditional technologies to support reliability on the transmission or distribution system? If so, what criteria would be appropriate for pre-approval of such devices and why? Should such a pre-approval process only apply for a limited time?

6. Should the commission's rules permit or require a TDU to contract with a non-utility service provider for the provision of a non-traditional technology device to support reliability on the TDU's transmission or distribution system? If so, what parameters should the commission stipulate for this arrangement?

7. If the commission were to adopt a policy of permitting a TDU to procure a nontraditional technology device for the purposes of supporting reliability on the TDU's transmission or distribution system, what potential effects would such a policy have on ERCOT wholesale market outcomes, and especially price formation, in the ERCOT market? What potential effects might such a policy have on the competitive retail market, if any?

8. What market-based alternatives exist, if any, to address reliability issues on a TDU's transmission or distribution system?

9. How could a vertically integrated investor-owned utility maximize the value of an energy storage device without adversely affecting wholesale market outcomes and price formation in its respective market?

10. What impediments exist to using non-traditional technology devices on utility transmission or distribution systems?

11. Could the commission specify conditions under which a TDU could employ nontraditional technologies to support reliability? If so, what conditions would be appropriate?

12. If you are a utility, please provide a detailed overview of any batteries or other energy storage technologies on your transmission and distribution system in the state of Texas that are either currently operational or planned to be operational. Please explain the purpose, use, metering, and deployment of these technologies.

13. Are there any other issues that the commission should consider addressing in this project?

Project 48023

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