Electrical corporations: distributed energy storage systems.
What changed between versions
Section 380 amendment was entirely removed. The Senate version required energy storage systems to be included in each load-serving entity's integrated resource plan and declared that storage procured under Section 2837.5 satisfies resource adequacy requirements. None of this survives in the Assembly version.
Section 2837.5 was entirely removed. This section had required the Energy Commission to identify constrained distribution areas and local capacity areas by July 1, 2028 and biennially thereafter, required the PUC to consider procurement strategies for distributed energy storage systems of 10 MW or less by January 1, 2030, allowed load-serving entities to meet up to 50% of procurement targets through self-owned or customer-side-of-meter storage, and required reconsideration of targets every three years.
The nonwire alternative evaluation requirement was narrowed from applying broadly to any proposed infrastructure investment above a threshold within identified localized reliability vulnerability areas, to applying specifically as part of the distribution planning process. The cost-effectiveness demonstration in subdivision (c)(2) was also simplified by removing the explicit list of factors (avoided capacity, avoided T&D investments, reliability benefits).
The bill title and legislative counsel digest were changed from covering 'distributed energy storage systems: procurement' to simply 'Electrical corporations: distributed energy storage systems and nonwire alternatives,' reflecting the removal of all procurement strategy and target-setting provisions.
Detailed integrated resource plan requirements were removed, including: analysis of at least 10 localized reliability vulnerability areas with specific metrics (outage risk reduction, deferred investment, hosting capacity, load growth), procurement actions to resolve each area within five years, identification of high-load-growth areas, and documentation processes for using metrics in planning.
Requirements for the PUC to prioritize programs for constrained distribution areas, local capacity areas, and high-load-growth areas were removed, as were requirements that energy storage procurement include both utility/CCA ownership and third-party models.
A new provision was added stating that Section 469.5 shall not be construed to delay customer energization timelines, providing a safeguard against the nonwire alternative evaluation process slowing down service connections.
The requirement for the PUC to amend energy storage tariffs by January 1, 2028 to properly value capacity and grid services (including time-of-use rates) was removed.
Performance-based incentive mechanisms were removed. The Senate version required the PUC to establish mechanisms allowing electrical corporations to earn incentives for measurable outcomes including peak load reduction, infrastructure deferral, reliability improvements, and integration of cost-effective distributed energy resources, conditioned on demonstrated net ratepayer benefits.
Provisions requiring electrical corporations to quantify avoided costs using commission-approved methodologies, propose compensation mechanisms for grid services lacking organized markets, and issue written findings when compensation is deemed inappropriate were removed.
