Maryland Storage Working Group Files Revised "Proof of Regulatory Concept" Storage Proposals, Still Include Models With Utility Ownership, Operation

May 15, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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The Maryland PC 44 energy storage working group has filed a revised Proof of Regulatory Concept Program Proposal which is intended, "to test innovative regulatory and business models for energy storage."

The revised proposal still retains the four earlier proposed models for storage ownership and operation

"These models provide an opportunity to test innovative commercial structures that enable multiple parties to tap resources across several value streams, including retail and wholesale markets," the group said

The proposed models for testing are:

1. Utility ownership, utility control for grid reliability, utility direction of storage operation for interaction with wholesale markets. Ratepayer support for storage investment, less wholesale revenues

2. Utility ownership, utility control for grid reliability, third-party direction of storage operation for interaction with wholesale markets. Ratepayer support for storage investment, less third party lease or contract for wholesale transactions

3. Third-party ownership, utility control for grid reliability, third-party direction of storage operation for interaction with wholesale markets. Utility (ratepayer) payment to third party for priority access to storage for grid reliability

4. Virtual Power Plant. Customer of Third-party ownership, utility control, via aggregator (or utility as aggregator), for grid reliability, utility and/or third-party as aggregator direction of storage operation for interaction with wholesale markets, if at all. Utility (ratepayer) payment to aggregator for priority access for grid reliability, utility payment to storage owner if utility is aggregator

The working group proposed that a pilot timeline would include the following stages. Assuming a program launch date of June 1, 2019, each IOU will submit the first project application to the Commission on or before April 15, 2020, and the second application on or before September 15, 2020. The Commission would review the applications, engage stakeholders, and make a final determination on all applications on or before April 15, 2021. The Commission would solicit comments from the Maryland Energy Administration, the Maryland Office of People’s Counsel, the Commission’s Technical Staff, and other stakeholders, and hold a hearing on each application submitted. The Commission would approve, approve with modifications, or reject each application. In doing so, the Commission would consider the projected costs and benefits of the projects proposed for inclusion in the pilot program and determine whether deploying the pilot project under review is in the public and ratepayer interest.

All projects that receive approval from the Commission would then have 12 months to become operational, on or before February 28, 2022. The Commission would be able to extend this deadline for good cause shown if unanticipated project delays occur. The IOUs will submit the first 12 months of data to the Commission to develop a first interim report on or before July 1, 2023 to reflect possible lag time in data collection. The Commission will then have 12 months to analyze the data and produce an interim report on or before July 1, 2024. The IOUs will continue to submit data for year 2 and 3 of the project’s operation on July 1, 2024 and July 1, 2025, respectively.

On or before July 1, 2026, the Commission would conduct an evaluation of the projects in the program. On or before December 31, 2026, the Commission would complete a final report on the program.

The proposal is not a fully consensus proposal The Maryland Energy Administration (MEA) and the Maryland Office of People’s Counsel (OPC) continue to have some of the same concerns each had with respect to the original proposal. Both MEA and OPC are concerned about the costs of specific projects for which the utilities would subsequently seek approval under the suggested framework, and whether the utilities can prove cost-effectiveness.

PC 44

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