1. 31st USAEE/IAEE North American Conference
Regulatory Developments
and Impacts
Involving Electricity Storage in Texas
Elizabeth Drews
31st USAEE/IAEE North American Conference
Austin TX, November 4-7, 2012

2. The usual disclaimers This is not legal advice or legal services
This is no one’s opinion but mine, & might not stay mine
This is a summary
Laws & facts change

3. Why storage could especially benefit ERCOT
ERCOT’s
Electrical isolation from other grids
> 11,000 MW wind (# 1 in US, # 6 in world, > 2,000 MW coastal) 12,277 MW by 2014
Growing demand
Potential capacity shortfalls
Nodal market design 3

4. Where would storage fit in ERCOT
Where would storage fit in ERCOT? Capacity, Demand, Reserves Report (May 2012)

5. Generation under study in ERCOT *
Peak demand
68,379 MW
Wind record
8,368 MW (17.64% of 47,452 MW load) of which 7,381 non-coastal
Fuel type
Cancelled studies (MW)
Suspended studies (MW)
Active studies (MW)
Gas
1,939
2,890
8,317
Nuclear
5,900
Coal
3,635
Wind +
394
1,092
1,560
Solar
236
353
856
Biomass 50
100
Storage
906
Other
700
1,480
Total
7,400
21,747
16,854
* No firm commitment to build
+ Calculated at 8.7% of nameplate capacity

6. Some IPP storage development in Texas
Compressed Air Energy Storage
Battery
Apex: 275 MW
AES: 40 MW
Chamisa: 270 MW, expandable to 810 MW
Xtreme/Duke: 36 MW, behind meter w/ wind
ConocoPhillips: behind meter w/ wind or solar
Source: filings in Public Utility Commission of Texas (PUCT) Projects 39764, 39917, 41026

7. Some uses of electricity storage
Energy time-shift
Peak shave
Ancillary services
Reliable power in outage
Address voltage, frequency variations
Transmission support
↓ transmission congestion
Defer T&D upgrades 7
Adapted from PUCT 2011 Scope of Competition Report

8. Generalized attributes of storage technologies
CAES
Battery
Can inject for hours-days
Can inject ≤ hour
Can respond to grid needs in minutes
Can respond to grid needs in seconds
Hundreds of MW
Tens of MW, modular
$ hundreds of millions
$ 1-10 million
2 years to build
1 year to build
Must be near cavern or similar, TX has
Attributes/capabilities vary by project & technologies are evolving 8

9. Regulatory limits on uses of ERCOT storage
In non-retail choice areas, utility, coop, muni can own G&T
Can own storage that serves both functions
In retail choice areas, utility owns T&D, power generation company owns generation
Protects competition
Keeps storage from supplying & being paid for all its uses 9

10. Storage as transmission
PUCT Docket 35994, ETT
Transmission/distribution utility owns 4 MW battery to help voltage & delay transmission in remote area, does not own or sell energy from the battery
PUC: transmission asset, can put in rate base
Operational since 2010 10

11. Storage as generation 2011 statute (SB 943) – Texas storage:
Intended to sell energy or ancillary services at wholesale is generation
May interconnect, obtain transmission service, sell electric energy & ancillary services at wholesale consistent w/ TX law re: power generation company or EWG
Must register as power
generation company 11

12. PUCT pricing rule on storage (2012, Project 39917) 3 main decisions
Electricity purchases by storage for charging are wholesale, not retail (same as FERC)
Such electricity purchases are settled nodally (at bus that connects the storage facility), not zonally like a load
Retail transmission & ancillary service charges do not apply to such electricity purchases 12

13. ERCOT rule changes, integration issues
ERCOT’s Emerging Technologies Working Group
IDs & proposes changes to ERCOT requirements that preclude market participation of emerging technologies
Has addressed # issues relating to storage
Is developing a list of operations issues relating to storage 13

14. PUCT ERCOT pilot project rule (2012, Project 40150)
Allows ERCOT pilot projects for storage/other ET
ERCOT may temporarily exempt pilot participants from specific ERCOT requirements
ERCOT board must approve pilot project; board decision appealable to PUCT
Rule leaves many issues, e.g. cost allocation & post-pilot transition if any, to ERCOT pilot review process to resolve 14

15. Pilot projects at ERCOT
ERCOT posts documents for each pilot project on its website
ERCOT has been working on a pilot project for a Fast Responding Regulation Service (similar to FERC Order 755, “pay for performance”) 15