Energy storage has excited the minds not only of entrepreneurs, but increasingly of state regulators and governments. However, paying for the benefits that it provides has been a thornier issue, and state governments are increasingly taking an end run around the issue of compensation by simply ordering utilities to procure batteries and other storage systems.
As part of this trend last week New York to decisive action to become the fourth state to set a target for storage deployment, with the state’s legislature passing S 5190 and AB 6571. These bills empower regulators to create a target for storage installations in 2030, as well as a program for deployment to reach this target.
The state’s Public Service Commission (PSC) would have until January 1, 2018 to set actual numbers for the target as well design the deployment policy. This deployment program will be administered by the New York State Energy Research and Development Authority (NYSERDA) and the Long Island Power Authority (LIPA).
The bill’s passage follows on the creation of a 1.8 GW energy storage mandate in California through two separate bills, as well as similar legislation empowering mandates in Massachusetts and Oregon. And while unlike the requirements in these three states New York is only setting a target, the bill’s language gives regulators a wide berth in terms of how they can to go about this.
It is unclear what relationship these programs will have to the governor’s Reforming the Energy Visions (REV) process, under which the PSC has created a formula to value distributed energy resources. However, the brief bill requires that the energy storage program design take into account avoided or deferred costs associated with transmission, distribution and capacity, minimizing of peak load in constrained areas, and other issues, balanced against the estimated expenditures of the program.
The bill was cheered by the Energy Storage Association (ESA). “This legislation will bring significant benefits to New York ratepayers, improve system reliability, lower energy costs, and enable the increased deployment of sustainable energy,” stated ESA Executive Director Matt Roberts.
Roberts also notes that the bill is a boon to the state’s energy storage industry, which he estimates has grown more than 30% in the last four years and employs more than 3,900 workers. “Energy storage is key to New York’s advanced energy economy, and this legislation will propel further economic growth for the state,” observes Roberts.
The bill now goes to New York Governor Cuomo for approval, but given his zeal for clean energy and grid transformation it is hard to imagine a situation under which the governor would not sign it.