Cost Recovery by Storage Grid Domain Storage Grid Domains Regulatory Function Cost Recovery Request Balancing Account Rate Component Generation / Market General Rate Case (GRC) or Application or Tier 3 Advice Letter Base Revenue Requirement Balancing Account (BRRBA) (for Capital; Operations & Maintenance (O&M) expense) and Energy Resource Recovery Account (ERRA) (for Market Cost / Revenue) or New System Generation Balancing Account (CAM resources) Generation or New System Generation Rate Component (NSGRC) for CAM resources Third-Party Owned Application or Tier 3 Advice Letter ERRA Reliability (FERC) FERC Owner (TO) Rate Case Transmission Access Charge (TAC) or other reliability services arrangements as determined by the CAISO
Cost Recovery by Storage Grid Domain (Continued) Storage Grid Domains Regulatory Function Cost Recovery Request Balancing Account Rate Component Distribution Reliability GRC or Application or Tier 3 Advice Letter BRRBA (for Capital; O&M expense) Distribution Generation / Market GRC or Application or Tier 3 Advice Letter BRRBA (for Capital; O&M expense) Generation or NSGRC for CAM resources Application or Tier 3 Advice Letter ERRA Dual-Use (Reliability & Market) GRC or Application or Tier 3 Advice Letter Allocate based on usage (or other alternative TBD) BRRBA (Capital; O&M Expense) ERRA (Market Cost / Revenue) Distribution AND Generation or NSGRC for CAM resources Storage or Utilize Processes Various Balancing Accounts Distribution or Public Purpose Charges Specific Owned Owned
next cycle, and the state of the current storage market, than under a scenario where IOUs have twelve months to make the same determination.” PG&E disagrees and argues that GPI’s comments do not appreciate the two-step nature of the RFO process. The first step is the development of the shortlist; and the second step is negotiation with those on the shortlist to reach agreement on mutually agreeable projects. PG&E complains that “GPI’s proposal would force the utilities to make their decisions on whether to request deferment based primarily, if not solely, on the bidders’ initial offers.” More time is needed to work together to develop mutually agreeable viable storage projects before a utility requests a deferment. Discussion PG&E, SCE, and SDG&E make persuasive arguments that the deadline to request deferral should be longer than three months after receipt of initial offers. In this decision, we extend the deadline to request deferments to no later than one year from the date of the solicitation coinciding with the IOU filing seeking Commission approval of contracts of winning bids. Early offers may not provide enough information to make a decision to defer volumes. It is only after the development of a short list and further negotiations that an IOU will know what the final offers looks like and what adjustments need to be made moving forward. A shorter deadline sounds attractive, but may not be realistic as the program is in a startup mode and more time may be needed to evaluate needed deferments moving forward. While we extend the time line for the IOUs in this first 2014 biennial solicitation, we may shorten timeline deadlines to defer in subsequent biennial
transmission and distribution domains where market/bundled services may most likely reside. Proposed projects related to generation/market “bundled” services for the 2014-2016 solicitation (that could be eligible for and apply for PCIA treatment) are more difficult to forecast and depend on multiple factors (e.g., storage configuration of newly eligible technologies that provide market services (all or in part)), many of which are not yet known. Cost recovery of bundled service storage projects is subject to approval by the Commission on a case-by-case basis through an Application or Tier 3 Advice Letter process as appropriate to the applicable proceeding. In the early stages of the energy storage program, we do not know the potential PCIA-related projects beyond those existing projects that have already been deemed eligible for PCIA treatment. Implementing actual PCIA cost recovery may be challenging because a benchmark to quantify above market storage costs has not yet been developed. Predicting the extent to which “departing load” will be an issue in the future may be difficult; for example, DA is maxed out under load caps as prescribed by Senate Bill (SB) 695 (Stats, 2009, Ch. 337). Departing load due to CCAs appears to be in a state of growth; however, further evidence is needed to substantiate this. It is not clear whether load departing from IOU “bundled” service will result in stranded costs attributable to IOU energy storage procurement. Potential implementation of PCIA for generation and non-generation in future energy storage solicitations involves complex policy, equity, cost,