UTC: Energy Storage Key to Electric Utilities’ Efficiency and Service

Utilities should consider storage in resource planning and investment

Washington State regulators today issued a formal policy statement addressing how Washington’s investor-owned electric utility companies should include energy storage to meet future resource requirements.

In the statement, the Washington Utilities and Transportation Commission (UTC) reviewed the landscape of energy storage technologies and how they can be incorporated into a utility’s resource mix.

In order to meet the increasingly evolving demands of energy customers and state policymakers, diversify the state’s energy mix, and reduce Washington’s impact on the environment, the UTC determined that companies will need to account for storage options in both regular energy resource planning analyses and investment plans.

The policy statement lays out a framework to guide the commission’s ongoing rulemaking for integrated resource plans (IRPs). Regulated utilities file IRPs with the commission every two years to identify energy supply and demand expectations for the following 20 years.

“Energy storage is a key enabling technology for utilities to accomplish the goals of the state’s energy policies,” the UTC stated in the policy statement. “Washington’s investor-owned utilities should be working diligently to identify and pursue cost-effective opportunities to incorporate energy storage into their systems.”

The policy statement does not set a specific storage integration methodology, but rather outlines expectations for practices going forward.

The policy statement establishes an expectation that utilities will demonstrate reasonable consideration, including cost and benefit analyses, of energy storage options in their IRPs. The statement also encourages companies to use more detailed planning models and sets forth an expectation that utilities will use publicly available energy storage modeling tools, such as those provided by U.S. Department of Energy laboratories.

Finally, the UTC statement assures utilities that its regulation of energy storage investments will follow the same principles applied to all other utility investments. The UTC encourages utilities to pursue state and federal funding opportunities to minimize investment risk and encourages the consideration of consumer-level energy storage investments.

The UTC will develop specific language guiding utilities’ energy storage evaluation and investment in distribution system planning in the ongoing IRP rulemaking.

The policy statement is the result of more than two years of investigation by the UTC. The process began in 2015, when commission staff issued a white paper that detailed the obstacles that energy storage faces in traditional utility planning procedures. Over the course of the investigation, the commission conducted two public workshops on energy storage and took three rounds of public comments from the utilities and other stakeholders.

The UTC regulates the private, investor-owned electric utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.
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