AEP Texas North Proposes Installation of Two Batteries, Addresses Treatment of Energy During Charge/Discharge

AEP Texas North has petitioned the Public Utility Commission of Texas for approval to install two lithium-ion batteries, at Woodson and Paint Rock, Texas

TNC is proposing to install a lithium-ion battery in two locations on its distribution system (in Woodson and Paint Rock, Texas) in order to increase the reliability of its distribution system, the company said

Due to the first-of-its-kind nature of this distribution installation in Texas, TNC is requesting that the PUCT confirm that TNC's proposed installation of batteries at Woodson and Paint Rock, Texas complies with Texas law and will be considered distribution assets whose cost will be eligible for inclusion in the company’s distribution cost of service. TNC is also requesting approval to apply a 6.67% depreciation rate to the property, which represents an estimated 15-year useful life.

"The assets described in this filing will not be used to sell energy or ancillary services at wholesale so they are not generation assets," TNC said

Concerning energy used to charge the battery, and energy discharged from the battery, TNC, "proposes that it be treated as unaccounted for energy (UFE), similar to ERCOT Protocol 10.3.3.1 (f)(iii), which clarifies that metering of energy flows from transmission service provider-owned battery storage technology in Presidio is not required for settlement."

"However, the Company is open to discussions with interested parties regarding alternatives for accounting for the energy used during charging and discharging," TNC said

"The batteries will function as distribution assets and displace more traditional distribution-level upgrades, such as substations and distribution lines," TNC said

TNC said that it has determined that the two locations on its distribution system could benefit from system upgrades, and that in each of these instances, the installation of a lithium-ion battery would be less costly than more traditional solutions.

"TNC is considering installing batteries in the two specified locations to specifically improve system reliability by supplying power during outage and overload situations. Each of these batteries will be able to provide its rated load output for two hours. The duration of the continued service would be dependent on the loading on the battery during the outage. At rated loading, a battery could supply an area for up to two hours; if the load at the time was half the rated output of the battery, it could supply power to the area for up to four hours," TNC said

Regarding Woodson, TNC noted that because the distribution line serving the community currently traverses fields and pastures and is not readily accessible from roadways, "it is difficult to access the line to restore service in outage situations."

"In the past five years, Woodson has experienced an average of four outages and eight hours of outage time annually. The average customer in Woodson saw approximately three times the outages and was out of power for three times as long as the average TNC customer during the same time period," TNC said

"A utility-scale battery could be installed on the radial distribution feeder near Woodson so that it could provide power during an outage of either the transmission or radial distribution line that currently serves Woodson. Currently, a one mega-watt battery capable of supplying two mega-watt hours of power (1MW/2MWh) could be installed at an estimated cost of $1.6 million. This is less than the cost of more traditional solutions (i.e., either the construction of a new transmission line and substation in Woodson or the construction of a new distribution line), which range in cost from $6.0 - $17.2 million," TNC said

Regarding Paint Rock, TNC said that the community is served by a single 1.0 MW distribution substation located in the eastern part of town. The peak load on the Paint Rock substation transformers is 1.1 MW, which represents a 10% overload. The load at Paint Rock has peaked above the rating of the substation transformers in each of the past five years.

"At this peak load level, there is no ability to add any new electrical load in the Paint Rock area without system upgrades," TNC said

The magnitude of the overload at Paint Rock is the equivalent of six to 10 typical residential homes. The installation of a battery on the distribution system in Paint Rock would allow the Company to forgo a $5.3 million substation upgrade for both the entirety of TNC’s 10- year planning horizon and for the foreseeable future. The estimated installation cost of the 500kW/1,000kWh battery is $700,000, approximately 13% of the cost of a more traditional solution, TNC said

Docket 46368