PG&E’s landmark energy storage projects snagged by pushback
Ratepayer advocates and consumer groups claim the selection process is flawed and not transparent.
It may not be smooth sailing for Pacific Gas and Electric’s landmark energy storage projects.
Totaling 567 MW, 2,270 MWh, the four projects were hailed as the largest battery storage investment ever proposed when PG&E submitted them for approval at the California Public Utilities Commission (CPUC) in late June. However, comments opposing the projects could slow down their approval and implementation.
Already, the state’s Office of Ratepayer Advocates (ORA) and the Direct Access Customer Coalition (DACC) have filed comments opposing the projects, prompting the CPUC to extend the approval process by at least 120 days. The comments raise questions about whether or not the energy storage projects are needed and whether PG&E’s proposal conforms to the commission’s directives.
The recently-filed comments have had very little public scrutiny, as they were only sent to the relevant parties and have not been posted on the CPUC website.
The cost of reliability
In their comments, the ORA, which is part of the CPUC, argues that the energy storage projects are not needed because the deficiency they are designed to fill will be met with new and planned transmission projects. The ORA claims the projects do not comply with CPUC resolution (E-4909) that authorized PG&E to issue a solicitation for the projects.
The resolution is designed to alleviate the need for an out-of-market contract for Calpine’s Metcalf Energy Center, a 564-MW gas-fired plant in San Jose. Calpine had told the California ISO that it would have to take the plant out of service because it was uneconomic, but the ISO determined the plant is needed, granting a reliability must run (RMR) contract.
In the resolution authorizing the storage projects, the CPUC expressed its concerns about the impact the RMR contracts would have on ratepayers and the lack of competition in the RMR process that can lead to “market distortions and unjust rates for power.”
The commission ordered PG&E to enter into energy storage contracts at “reasonable cost to ratepayers” and to take into consideration the cost and value and the results of previous, similar solicitations. But the ORA argues PG&E did not meet the CPUC’s requirements because the utility did not provide “analysis or explain how the cost of the four energy storage projects are reasonable taking into consideration the cost of the Metcalf RMR contract.” Nor did PG&E compare the four contracts to previous energy storage solicitations, the ORA said.
Costs of the energy storage projects are redacted in the public comments. The comments are not available online because they are not filed with the commission. They are only sent to the relevant parties. By law, the utility is required to respond to comments. The CPUC’s industry division will gather all comments and responses and prepares a draft resolution with its recommendation. The commission then votes on the draft resolution.
The protests to the proposed storage projects should be rejected because “they inaccurately characterize the PUC’s resolution and rely upon an unreasonably narrow reading of certain ordering paragraphs in the resolution that is inconsistent with the remainder of the resolution,” PG&E spokesman Paul Doherty, told Utility Dive via email.