We’ve heard a lot about smart grid over the past decade, but to achieve a truly intelligent grid we need to do much more than switch out analog meters for their digital counterparts. We must also implement comprehensive new regulatory structures to make use of the data and functionality provided by these equipment upgrades. In other words, we need to modernize the grid in addition to our modes of interacting with it.
If the price of grid-scale energy storage fell to zero dollars per megawatt-hour, regulators and utilities would still be puzzled in how to deploy the boon of energy storage. That’s because storage doesn’t fit neatly into the electrical utility’s regulatory universe of generation, distribution, and load — or into the utility rate recovery structure. But that regulatory uncertainty is starting to clear.
On October 17, the California Public Utilities Commission (CPUC) established an energy storage target of 1,325 megawatts for Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric by 2020, with installations required no later than the end of 2024.“This decision represents an important first step in encouraging the storage market and supporting grid reliability,” said Commissioner Carla J. Peterman, the lead Commissioner for this proceeding.