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

A Maryland energy storage working group under PC 44 has proffered a non-consensus Proof of Regulatory Concept Program Proposal which is, "intended to test innovative regulatory and business models for energy storage."

The proposal, primarily developed by the Energy Storage Association with input from the working group parties, includes four models for energy storage:

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 proposes a Proof of Regulatory Concept program where each of the four investor-owned utilities (IOUs) will be tasked with soliciting offers from market participants for all four proposed models and submitting applications for at minimum two proposed energy storage projects that employ at least two of the four models described above. The total program size will be between five (5) and ten (10) megawatts cumulatively across the four electric service territories (with a minimum of 15 megawatt hours).

In the working group, the utilities committed to soliciting all four models from the market when engaging with energy storage developers to receive project proposals.

The Joint Utilities support the Proposal, while the Maryland Energy Administration and Office of People's Counsel have several concerns and do not support the Proposal. Both MEA and OPC are concerned about the costs of specific projects for which the Joint Utilities would subsequently seek approval under the suggested framework, and whether the Joint Utilities can prove cost-effectiveness.

PC 44