Policy Proceeding—Utilization of Storage Resources as Electric Distribution Assets; Doc. No. M-2020-3022877
[50 Pa.B. 7259]
[Saturday, December 19, 2020]
The Pennsylvania Public Utility Commission (PUC or Commission) continues to work diligently to ensure electric distribution companies (EDCs) transition toward a future which accommodates evolving needs of customers with increased reliability and resiliency. Presently, eight of the eleven EDCs have an approved long-term infrastructure improvement plan (LTIIP) that facilitates achievement of these goals.1 Further, the overriding goal during this transition is to ensure that customer rates remain affordable.
As technology and customer needs change, utilities change distribution systems to accommodate the public convenience, safety, and system reliability. Variables in this venture that were once nascent are now ubiquitous. Case in point, increases in behind-the-meter generation resources, such as solar arrays and microturbines, are increasingly challenging utilities to meet customer needs and transition from a one-directional centralized grid to a bi-directional distributed grid. Another variable in this regard is the increased utilization of the distribution grid to fuel electric vehicles.
Further, variables that threaten reliability and have always existed are now even more prevalent. Think no further than increases in major weather occurrences such as thunderstorms, floods, hurricanes, derechos and ice storms. EDCs have seen significant negative impacts to reliability due to increased severe weather, as documented in our most recent Electric Service Reliability in Pennsylvania Report.2
This sea change in the circumstances brings unique and new challenges to electric distribution companies. These come first in the form of potentially lower capacity utilization through increased peak demand. Second, such circumstances make ensuring reliability and resiliency more challenging than ever.
However, advances in technology appear to offer the potential to utilize novel resources which provide affordable customer rates and better utility service. In this regard, the Commission is interested in exploring policies which can allow electric utilities the opportunity to substitute conventional distribution upgrades with alternatives that may provide sound economic investments. Of specific focus here is the Commission's interest in exploring the viability of utility investment in electric storage as a distribution asset utilized for the purposes of enhancing or maintaining reliability. As electricity storage cost economics persistently improve, discussion of this subject matter is timely. Exploring this topic is warranted since utilization of batteries on the distribution grid, in appropriate circumstances, may offer an option to foster reliability that will have a less significant rate impact than other more conventional utility restoration or improvement investments.
To that end, the Commission wishes to start a proceeding to inform the Commission on utilities' and other stakeholders' positions regarding this topic. It is the Commission's hope that the information solicited in this proceeding can guide any potential future regulatory policies related to utilization of electric storage within electric utility distribution resource planning. To commence this process, the Commission specifically seeks responses to the inquiries identified in the attached list.
Interested parties are invited to submit written comments for inclusion in the record with the Secretary of the Commission within thirty (30) days of publication in the Pennsylvania Bulletin. Comments shall be filed consistent with the Commission's July 27, 2020 Secretarial Letter. Modification to Filing and Service Requirements Emergency Order, Docket No. M-2020-3019262 (Secretarial Letter issued July 27, 2020). Pursuant to this Secretarial Letter, all filings are to be made by e-filing or by electronic mail. This information can be found on the Commission's website at www.puc.state.pa.us/efiling/default.aspx.
The contact persons for this matter are Assistant Counsel Aspassia V. Staevska, (717) 425-7403, firstname.lastname@example.org, Joe Cardinale, (717) 787-5558, email@example.com in the Law Bureau; Eric Matheson, (717) 346-3863, firstname.lastname@example.org in the Office of the Executive Director; and Fixed Utility Financial Analyst David Edinger, (717) 787-3512, email@example.com in the Bureau of Technical Utility Services.
Questions for Comment in the Policy Proceeding— Utilization of Storage Resources as Electric Distribution Assets; Doc. No. M-2020-3022877
1. What applications can electric storage provide as a distribution asset for utilities that would facilitate improved reliability and resiliency?
2. What are the defining characteristics of electric storage used for distribution asset planning as distinguished from generation resources? What thresholds, if any, would classify electric storage as a generation resource and therefore outside permitted distribution ratemaking and recovery?
3. Is it prudent for utilities to include electric storage in their distribution resource planning and, if so, where and under what circumstances? Further, is it appropriate for utilities to include such investments in rate base?
[Pa.B. Doc. No. 20-1796. Filed for public inspection December 18, 2020, 9:00 a.m.]
1 Pike County Light & Power's LTIIP Petition is currently being reviewed by the Commission and, if approved, would make nine of the eleven EDCs with an approved LTIIP.
2 The report may be downloaded here: https://www.puc.pa.gov/General/publications_reports/pdf/Electric_Service_Reliability2019.pdf.
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