Dive Brief:

  • Pennsylvania utilities — including Duquesne Light, FirstEnergy Pennsylvania, PECO Energy and PPL Electric — will be able to use energy storage to address reliability on their distribution systems under a policy statement issued April 4 by the Pennsylvania Public Utilities Commission.
  • The PUC rejected a call by Advanced Energy United to provide guidance to utilities on using competitive markets to procure storage assets. Instead, the PUC said it plans to decide who should own the assets on a case-by-case basis, while noting that third parties may own them.
  • “The policy statement encourages the consideration of storage as a distribution asset,” PUC Vice Chair Kimberly Barrow said in a statement. “Such an asset is prudent only when the competitive electricity markets are not reasonably or cost-effectively able to serve the function of the electricity-storage asset.”

Dive Insight:

On August 24, 2023, the PUC agreed to develop a policy statement that includes a definition of energy storage assets and resources and clarifies when such resources can be deployed and who should own them.

At a public meeting on April 4, commissioners said they had determined that energy storage assets are another tool to address reliability and resiliency concerns, and electric distribution companies can use them to solve distribution problems and ensure grid resiliency.

Under the definition commissioners agreed on, an energy storage asset is “a resource capable of receiving electric energy from the distribution grid and storing it for later injection of electricity back into the distribution grid.”

Stakeholders that run the gamut from utilities to consumer advocacy groups — including the Pennsylvania Solar & Storage Industries Association, the Energy Association of Pennsylvania (EAP), PPL Electric and the Office of the Consumer Advocate — submitted suggestions on the policy statement.

PPL, for example, disagreed with the use of the word “injection,” because energy storage doesn’t just inject power into the grid, it can also be used for load management and absorbing excess energy.

Utilities wanted a definition that provided guidance on when energy storage can be deployed, whereas consumer advocates wanted a definition that is close to FERC’s definition of energy storage assets. The agency defines energy storage as “a resource capable of receiving electric energy from the grid and storing it for later injection of electric energy back to the grid.”

The commission gave both sides a little of what they wanted, with a policy statement that uses elements of FERC’s definition of energy storage, but also lays out when energy storage can be used.

Stakeholders had a variety of views on who should own energy storage assets. EAP, for example, wanted a policy statement broad enough to allow for third-party ownership of energy storage assets. Utility companies, on the other hand, wanted utility-owned storage assets.

The policy statement avoided directly addressing the issue.

Commissioners said they would not prescribe an ownership model, and instead said ownership should be decided based on individual circumstances.