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PSC Sets Considerations For Future Decisions On Approving Utility-Owned Energy Storage
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The Maryland PSC issued a follow-up order on utility energy storage proposals that outlines how the PSC will consider proposals for utility-owned energy storage projects in the future
As previously reported, the PSC in June rejected the Exelon Utilities' Utility-Owned Residential Customer Sited BTM BESS program, but at such time the PSC had said that the reasoning for the rejection would be more fully addressed in a future order.
The term Exelon Utilities is used by the PSC to refer to Baltimore Gas and Electric Company, Delmarva Power & Light Company, and Potomac Electric Power Company.
In June, the PSC conceptually endorsed the Exelon Utilities’ Utility Owned Distribution Connected and Utility-Sited FTM BESS, and the Utility Owned Commercial/Industrial Customer-Sited FTM and BTM BESS program concepts
In the new order, the PSC states that, "the Commission does not preclude future utility ownership of BTM energy storage."
The PSC also noted that the Commission will make future decisions in Case No. 9778 on utility ownership of virtual power plants, which may include utility dispatch of aggregated BTM energy storage devices to provide grid services.
In evaluating utility-owned distribution-connected storage, the PSC said, "Electric company distribution-connected proposals should demonstrate grid benefits, such as the use of energy storage devices at the distribution level as non-wires solutions or to improve the reliability of the local distribution network, and should explain how their proposals will be incorporated into the company's distribution system plan."
For utility-owned distribution-connected storage, "The Commission will also consider, in evaluating proposals, cost-effectiveness and the effect of the proposal on competition."
The PSC said that, "The Commission is concerned that allowing a utility to rate base BTM batteries may create a regulatory disincentive for third-party programs, among other concerns."
Unlike the rejected residential utility-owned BTM program, the PSC did find that the Exelon Utilities’ Utility Owned Distribution Connected and Utility-Sited FTM BESS, and the Utility Owned Commercial/Industrial Customer-Sited FTM and BTM BESS, program concepts, as proposed, are expected to provide grid value. "The Utility Owned Commercial/Industrial Customer-Sited FTM and BTM BESS program both include behind-the-meter energy storage devices, albeit larger devices, where the Exelon Utilities will dispatch these resources to maximize system benefits," the PSC said
As previously directed, final proposals for the Exelon Utilities’ Utility Owned Distribution Connected and Utility-Sited FTM BESS and the Utility Owned Commercial/Industrial Customer-Sited FTM and BTM BESS programs shall be filed by November 1, with the final proposals addressing, among other things, benefit-cost analyses
For electric company transmission-connected storage proposals, the PSC said that, "the Commission does not agree that utility ownership of transmission-connected energy storage should be limited to cases where third-party provision is infeasible and that utility-owned BESS should be procured exclusively from third parties."
For electric company transmission-connected storage proposals, the PSC said that such proposals should demonstrate grid benefits, such as the use of energy storage devices at the transmission level to improve resource adequacy and provide grid benefits. The Commission will also consider, in evaluating such proposals, cost-effectiveness and the effect of the proposal on competition.
The PSC said that the Exelon Utilities have not demonstrated how their Utility-Owned Transmission-Connected and Utility-Sited FTM proposal will provide value over and above the Commission's procurement solicitation requirements in the Next Generation Energy Act for these targeted projects. The PSC noted that, to date, PJM has not established Storage as a Transmission Asset (SATA) processes for use of energy storage in transmission system planning
Given that SATA projects are not yet approved in PJM, the PSC said, "the Commission is persuaded that having utility-owned transmission connected BESS that are primarily used for participation in PJM wholesale markets would not be in the public interest. The Commission will be more amenable to such projects if and when SATA projects are approved for use in PJM transmission planning."
Case 9715
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September 5, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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