The California Public Utilities Commission in mid-January became the first state regulator to issue revenue stacking rules for energy storage projects, but the rules could be more of a starting point than an end point.
Revenue stacking — the layering of uses for a storage system to allow for more than one revenue stream — has become something of a Holy Grail for energy storage projects since the concept was included in a 2015 paper by the Rocky Mountain Institute. The idea is that the economics of energy storage can be optimized by using its unique characteristics to act as both load and supply, which gives it the flexibility to provide multiple uses or applications, sometimes simultaneously, and therefore layer on more than one revenue stream.
“The new rules will provide a framework for authorizing multi-use applications for energy storage projects that should guide both utilities and developers alike,” Alex Morris, vice president of policy for the California Energy Storage Alliance, told Utility Dive.
In addition to drawing up a set of 11 rules on revenue stacking, the underlying order also establishes a working group to develop “clear, actionable recommendations” on issues such as compensation for PUC jurisdictional services, the appropriate metering and measurement of Multi-Use Applications, and PUC enforcement of Multi-Use Application rules. It also includes recommendations on enabling uses for community storage projects and the implementation of AB 2868 — a 2016 law that calls for the “acceleration” of 500 MW of distribution-connected energy storage facilities, such as behind-the-meter and community energy storage installations.
California Public Utilities Commissioner Carla Peterman raised the possibility of opening another proceeding on energy storage, if need be. The CPUC is also exploring the idea of instituting an expedited process for approval of energy storage projects, Morris said.
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