Maryland PSC Directs Utilities To Solicit Energy Storage Proposals, Directs That Impacts On Retail Market Be Considered

August 22, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Maryland PSC directed the investor-owned electric utilities to solicit offers to develop energy storage projects, and thereafter submit them to the Commission for approval

The PSC's directive implements the Energy Storage Pilot Project Act (SB573), and directed the utilities to solicit offers to develop energy storage projects consistent with the Act's requirements as well as additional directives from the Commission.

Notably, among the additional directives from the PSC is that project applications shall address the impact of each project on other state policy goals, including, "the development of the State’s retail energy markets[.]"

The Act requires that project applications for Commission approval must contain, among other items, information concerning: (1) best estimates of costs and savings for the project; (2) project location; (3) project size (in watts) and duration (in watt-hours); (4) primary and secondary applications; (5) business model selected for the project; (6) project developer, engineering, procurement and construction firm information; (7) type of energy storage technology; (8) the process used by the investor-owned electric company to solicit offers for the project; and (9) any other information required by the Commission. PUA § 7-216(e)(1-9).

"In addition to ... the requirements set forth in the Act, the Commission also directs that project applications shall address the impact of each project on other State policy goals, including environmental and clean energy objectives and the development of the State’s retail energy markets, as identified in State law," the PSC said

The PSC directed the Energy Storage Working Group to develop and propose, by December 31, 2019, metrics on environmental and clean energy objectives and impacts on the retail energy market for use in evaluating any project proposal.

The working group had previously indicated that it would provide to the PSC a more detailed list of the types of value streams each storage project application should consider by the end of the calendar year. The Commission directed the working group to submit this detailed list by December 31, 2019, along with any additional updates.

"[T]he Commission will defer consideration of the cost recovery mechanisms and the appropriateness of a need for utility incentives at this time. The Commission will make these determinations on a case by case basis for each application," the PSC said

The Energy Storage Pilot Project Act provides that, for purposes of the pilot program only, the PSC may, on a project–by–project basis, allow an investor–owned electric company to own or operate an energy storage device

The Act requires each investor–owned electric utility to solicit offers to develop energy storage projects for each of the following commercial and regulatory models:

(1) a "utility–only" model under which the electric company would own the project, control the project for grid reliability, and operate the project in wholesale markets or other applications when not providing grid services;

(2) a "utility and third–party" model under which the electric company would own the project and control the project for grid reliability, and a third party would operate the project in wholesale markets or other applications when the project is not providing grid services;

(3) a "third–party ownership" model under which the electric company would: (i) contract with a project owned by a third party for grid reliability; and (ii) allow the third party to operate the project in wholesale markets or other applications when the project is not providing grid services; and

(4) a "virtual power plant" model under which: (i) the electric company would aggregate or use a third–party aggregator to receive grid services from distributed energy storage projects owned by customers or a third party; and (ii) the projects would be used by the customers or third party for other applications when the projects are not providing grid services.

The Act requires that each utility shall submit applications for Commission approval to deploy energy storage projects from at least two of the models described above, one of which must be from a model described in (3) or (4)

The Act sets forth specific deadlines for submission of the applications and PSC, with the storage projects to be operational by February 28, 2022

Case 9619

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