California Commission Approves Nearly $1.3 Billion Energy Storage Contract to Support Reliability

The California Public Utilities Commission on Dec. 16 authorized Southern California Edison to enter into a contract with Ameresco Inc. for the construction of 537.5 megawatts of energy storage projects to ensure reliability during summer. The projects, valued at $1.226 billion, are expected to come online by Aug. 1, 2022.

Previous commission decisions instructed the state’s investor-owned utilities to purchase additional capacity beyond the 15 percent planning reserve margin to meet peak and net peak demand in 2021 and 2022 using energy storage wherever possible. Governor Gavin Newsom’s emergency proclamation issued on July 30, 2021, asked the commission to speed up plans to build new clean energy and storage projects to reduce capacity shortages and boost carbon-free energy availability.

The regulator has taken steps to ensure utilities can reliably serve their customers such as, paying residential customers for reducing energy demand at peak times, encouraging commercial and industrial customers to reduce electricity consumption during periods of high grid stress and installing thermostats to help customers save energy and reduce air conditioning use during critical times.

The commission plans to bring online up to four microgrid energy storage projects for San Diego Gas & Electric Company that will provide 160 megawatt-hours of power for short-term use during the summers of 2022 and 2023. The commission also authorized Pacific Gas and Electric Company to identify locations that may be interconnected safely to address the system’s capacity issue by enhancing its temporary generation program.

In order to serve customers at peak and net peak times during the summers of 2022 and 2023, utilities will be expected to increase supply and demand by 2,000 – 3,000 megawatts. Additionally, the agency expedited the procurement process of storage, imports, and cost-saving measures at factories.