Joint CPUC-CAISO Workshop: IOU Energy Storage Track 2, R May 3, 2016 Multiple-Use Application of Energy Storage Systems Gabriel Petlin/ Manisha Lakhanpal Grid Planning and Reliability, Energy Division, California Public Utilities Commission

Safety and Emergency Information In the event of an emergency, please proceed calmly out the exits. The Temporary Evacuation Location has been relocated to the Civic Center Plaza. It is located on the other side of City Hall. Exit the building at Van Ness and McAlister streets and walk past City Hall. 2

3

Other Information Call in information: Conference phone line: Participant code: WebEx : Join WebEx meetingJoin WebEx meeting Meeting number: Meeting password: !Energy1 WiFi Access: login: guest password: cpuc42916 Restrooms: out the Hearing Room doors and down the far end of the hallway. Energy Storage Website: Workshop Material will be posted on the Energy Storage website 4

Agenda Welcome, safety protocol and Updates - Energy Division 1.Storage OIR (R ) 2.ESDER Initiative 10:00- 10:30 AM Services and multiple-use application use cases – 1.Identify services and multiple-application uses cases 2.Objective in identifying these use cases and what do we wish to accomplish? 10:30-10:50 AM CESA –focus on multi-use application of storage systems 10:50 – 11:00 AM Presentation on existing and new storage projects, regulatory and market rule barriers, challenges and issues – Presenters: PG&E, SCE, DOD- LA Air Base, SDG&E and AES (Morning Session) Powertree, AMS, Stem and SolarCity (Afternoon Session) The purpose of this segment of the workshop is to understand actual storage projects being developed, the multiple uses they will provide, and the challenges or issues they face. 11:00 AM – 12:30 PM LUNCH – 12:30 PM- 1:30 PM 1:30 PM – 3:00 PM BREAK 3:00- 3:15 PM A discussion moderated by CAISO and ED staff - For issues out of scope of this Rulemaking or current CAISO initiatives, the workshop will document these issues for consideration and possible future resolution in the appropriate CPUC proceeding and CAISO initiative. 3:15 – 4:30 PM Wrap up 4:30 – 4:45PM

Vision To enable distributed energy storage systems to stack incremental value and revenue streams by delivering multiple services to the wholesale market, distribution grid and end users. Achieving this vision increases the value of storage, and potentially other forms of distributed energy resources, and enhances its economic viability and cost- effectiveness. 6

Problem Statement Due to regulatory and/or market barriers, current market rules do not support the stack of incremental values that distributed energy storage systems can provide to the wholesale market, distribution grid, and end users. As a result, energy storage cannot yet provide the full scope of multiple benefits and services it is capable of and realize its full economic value to the electricity system. 7

Objective of workshop: 1.Identify and define multiple-use applications (MUA), services and associated “use cases” that can be implemented in the near future 2.Identify relevant regulatory and market barriers and rules, and their limitations and possible modifications that would enable a distributed energy storage system to deliver and be compensated for multiple services 3.For issues out of scope of this Rulemaking or current CAISO initiatives, the workshop will document these issues for consideration and possible future resolution in the appropriate CPUC proceeding and CAISO initiative. 8

Current Proceeding R Ongoing implementation of legislation Assembly Bill 2514 & refine policies and program details. Track 1 - issues that must be expeditiously resolved prior to the 2016 procurement solicitations & January 1, 2015 required Tier 2 AL filings of ESPs and CCAs Track 2 - additional issues to continue to refine policies and program details 9

Track 1- D Allowed flexibility for customer-connected projects – can be procured up to a “ceiling” of 200% of the existing customer domain targets. Did not modify the RFO process to require additional operational need or location. DC-based storage for DC microgrid – eligible Hydrogen based P2G – ineligible SGIP funded storage projects – spilt credit between unbundled customer’s IOU and CCA/ESP Voluntary ES deployments count towards the storage target of the customer’s LSE. Extends the authorization of the PCIA mechanism to recover potential above-market costs associated with departing load for market/”bundled” energy storage services procured via the 2016 solicitation. Deferred PCIA extension to the life of the contract to the Application process when the Joint IOU Protocol is addressed along with the results of the 2014 RFO solicitation. 10

Track 2 1.Revision of Energy Storage Procurement Targets 2.Eligibility (Phase 2) 3.Multiple Use Applications of Energy Storage 4.Station Power 5.Community Storage 11

Next Steps May 13, 2016 Comments filed May 20, 2016 Reply Comments filed June 15, 2016 Workshop Report filed Parties may identify and comment on issues beyond the questions listed in the Issue Paper. Commenters doing so should clearly identify and explain the relevance of any additional issue.Issue Paper 12

Thank You! Formal proceeding documents are found using the Rulemaking number R Other documents, including workshop presentations, staff reports, cost-effectiveness analysis, and other background papers are on the CPUC web site: Gabe Petlin - or Manisha Lakhanpal – or CPUC 13