Energy Storage

Calif. eyes expanding storage incentives to wildfire areas

The California Public Utilities Commission issued a proposed decision that would shift the focus of the Self Generation Incentive Program (SGIP), the state’s primary energy storage incentive program, toward electric customers affected by Public Safety Power Shutoffs.

The proposal would refocus SGIP’s $815 million budget through 2024 away from behind-the-meter battery systems and toward “equity resilience” projects.

The existing equity resilience SGIP allocation, which targets low-income, disadvantaged or medically vulnerable customers, would be expanded to include customers in areas where that have been subject to two or more Public Safety Power Shutoff (PSPS).

A total of 63% of SGIP’s energy storage budget or about $513 million would be earmarked for customers under the expanded equity resilience criteria. Combined with $100 million in SGIP funds that were not allocated in the prior funding calendar and are being rolled over, there would be a total of $613 million in funds available for equity resilience energy storage projects.

In addition, the decision proposes to accelerate the SGIP schedule and allow for the acceptance of small-scale residential storage projects starting March 1, 2020, to enable customers to install devices before the beginning of the 2020 wildfire season.

The shift, if approved by the commission would mean that about half of SGIP’s $1.2 billion in current and future funding would be allocated to the equity resiliency budget.

The PUC said it would hold a hearing on the proposed decision, at the earliest, by Jan. 16, 2020.

The shift in funds toward equity resilience would come at the expense of other portions of the program. Large-scale storage systems would be reduced from 52% to 12%, or about $360 million in funding through 2024.

SGIP was created in 2001 to provide incentives for distributed generation resources to reduce peak demand. The program has been reformulated several times since then and over time the program’s budget has shifted from generation to energy storage. In the proposed decision, energy storage would command 85% of SGIP funds.

The breakdown of energy storage allocations is 63% of funds for equity resilience, 12% for storage systems greater than 10 kWh, 7% for systems equal to or smaller than 10 kWh, and 3% to residential equity projects.

The proposed decision also authorizes ratepayer collections of $166 million annually between 2020 and 2024 to fund SGIP.

The state’s investor-owned utilities argued that no or limited collections should be made for SGIP because they have not been able to distribute existing funds because of a lack of suitable projects.

But in the proposed decision, the PUC countered that the reduction in ratepayer impact by limiting allocations would be moot because SGIP funds are set to be returned to ratepayers is they are not used by 2026. Limiting allocations now would create “unnecessary uncertainty regarding the stability of SGIP funding, which is particularly important for large-scale projects that have longer planning horizons.”