R , Track 1: Overview of Storage Policy Gaps/Barriers July 28, 2015 Alex J Morris, CESA Director, Policy and Regulatory Affairs

© 2015 California Energy Storage Alliance What’s Next for Development of Energy Storage Rules ? While much progress has been made, much additional development of rules is necessary to allow full deployment of energy storage solutions, supporting state goals and a greener grid. Numerous areas of rule development need to be addressed and resolved in coming years. CESA recommends prioritization of the following: Any remaining LCR Track 1 barriers for storage solutions Fundamental business case/planning barriers, e.g., charging rate expectations Long-term planning barriers Barriers that “prevent contracts from being signed”, e.g. new technology “caps”

© 2015 California Energy Storage Alliance 2 CESA’s comprehensive lists of Storage Barriers and Policy/Rule Gaps should inform the record in this proceeding: CESA identified 41 Policy/Rule Gaps or Barriers in 2014, many of which are multi-faceted. See, “CESA’s Comments Energy Storage Road Map” (Sept, 18, 2014)CESA’s Comments Energy Storage Road Map Top energy storage rule barriers/gaps include: Charging rate design Interconnection/Rule 21 challenges, e.g. load-studies Multiple-Use Storage Applications Interim Alternative CAISO Metering structure (to PDR Baseline) CAISO Distributed Energy Resources Provider (DERP) enhancements Lack of long-term pumped hydro contracting process Limitations on 3 rd party storage for distribution solutions Top Storage Barriers and Gaps in Policies/Rules