The market for energy storage in Texas is in limbo, in part because key issues regarding utility ownership of energy storage have yet to be resolved.
The issue arose a year ago when the PUCT dismissed a request by AEP Texas, a unit of American Electric Power, to install two battery storage projects because the regulators said they lacked sufficient information.
Instead, the PUCT in February opened a docket (#48023) on the issue to “develop facts necessary to establish a regulatory framework” that would allow energy storage and other technologies to operate within the confines of Texas’ Public Utility Regulatory Act (PURA).
The docket, or “project” as the PUCT calls it, exposed the deep divide between utility and non-utility stakeholders in Texas’ competitive wholesale market, which does not allow transmission and distribution utilities (TDUs) to own generation assets.
Texas law classifies energy storage as generation, but TDUs argue that they are within their rights owning energy storage facilities for use on their distribution systems because they do not intend to use them as generation.
Texas competitive generators, along with competitive service providers and other parties, however, argued that utility-owned storage devices would be generation and would inevitably affect wholesale power markets and wholesale power prices.
The TDUs counter that even though the storage device might affect the wholesale market, they would be indistinguishable from any of the actions a TDU might take that could affect the wholesale market, such as the construction of new transmission line.
In its report to the legislature, the PUCT shows that PURA provides conflicting definitions of “generator” with respect to the ownership of energy storage devices. One section makes intent to sell to the wholesale market key. Another section appears to make an exception for self-use of power from a storage device.
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