Colorado’s regulated utilities will be required to consider energy storage during their generation, transmission and distribution planning processes under new rules approved by state regulators.
The Colorado Public Utilities Commission Dec. 12 decision came at the direction of a bill — H.B. 18-1270 — that took effect in August. The bill required the PUC to set by rule mechanisms for energy storage procurement in the planning process.
The bill aims to support energy storage to reduce system costs, help diversify energy resources and enhance grid safety and reliability.
The new rules require Public Service Co. of Colorado, an Xcel Energy subsidiary, and Black Hills to consider energy storage as part of their power supply procurement processes.
Their electric resource plans must include information so the PUC can fully assess proposals for acquiring energy storage systems through an all-source competitive acquisition process or through an alternative acquisition process, including the model contracts and the proposed evaluation criteria.
The utilities must also give the PUC information so its commissioners can consider alternate scenarios for assessing the costs and benefits from the potential storage acquisitions.
PSCo and Black Hills must also consider energy storage as an option in their transmission and distribution planning processes. The utilities must file annual reports on how they integrated storage into their distribution planning.
The PUC also adopted rules requiring utilities to provide confidential information to bidders in their solicitations, such as information on potential interconnection points. If third parties reveal the confidential information they will be ineligible to bid in future requests for proposals.
Colorado’s rules offer a model for other states, according to the Energy Storage Association.
“By requiring consideration of these resources in utility planning processes – a critical ingredient to ensuring the greatest savings for ratepayers – the Commission established a model that ESA encourages other jurisdictions to assess,” the trade group said.
Colorado public power utilities and energy storage
Public power utilities in Colorado are pursuing energy storage. In a recent interview with the American Public Power Association, Aram Benyamin, the new CEO of Colorado Springs Utilities, discussed the utility’s strategy related to renewable energy supplies and outlined how adding battery storage to its system is “going to give us a whole new view of what the world will look like 15, 20 years from now.”
And Colorado-based Platte River Power Authority in early 2018 issued a request for proposals for at least 20 megawatts of new solar energy capacity that could be added to its system. The RFP also calls for up to 5 megawatt-hours of energy storage capacity.
States are taking different approaches when it comes to encouraging the deployment of energy storage. Some states have adopted storage procurement mandates or goals, while other states, as seen in New Mexico, are directing utilities to include energy storage as a resource for utility planning purposes. The New Mexico Public Regulation Commission took its action in early August 2017.
The Washington Utilities and Transportation Commission in October 2017 issued a formal policy statement addressing how Washington’s investor-owned electric utility companies should include energy storage to meet future resource requirements.
In the statement, the Washington UTC reviewed the landscape of energy storage technologies and how they can be incorporated into a utility’s resource mix. The UTC determined that companies will need to account for storage options in both regular energy resource planning analyses and investment plans. The policy statement lays out a framework to guide the commission’s ongoing rulemaking for integrated resource plans.