New York Regulators Approve Cost Recovery for Utility Storage Deployment

The New York Public Service Commission on Jan. 21 approved tariffs filed by the state’s six major investor-owned electric utilities to allow recovery of contract costs for the procurement and deployment of energy storage systems. The move follows a 2018 order that established the state’s energy storage goal and deployment policy, directing cost recovery from delivery customers using the same mechanisms that are used by non-wires alternatives programs. The commission authorized revenue sharing of 30 percent to utility shareholders and 70 percent to ratepayers when wholesale revenues exceed contract costs on an annual basis.

In December 2018, the commission set an energy storage target of 3 gigawatts by 2030, with an interim goal of 1.5 gigawatts by 2025. The order directed Consolidated Edison Company of New York Inc. to procure at least 300 megawatts of storage to be operational by the end of 2022 and 10 megawatts each for each of the other investor-owned utilities.

Reaching the 2025 target is expected to deliver about $2 billion gross lifetime benefits to consumers, including electric distribution system savings and reduced emissions, apart from added resiliency benefits by lowering the impacts of outages caused by severe weather.

Currently, New York State has about 93 megawatts of advanced energy storage capacity deployed with 1,076 megawatts under contract. This is in addition to 1,400 megawatts of traditional pumped hydro storage. The total deployed and contracted projects represent about 78 percent of the 2025 target and 39 percent of the 2030 target. Furthermore, there are more than 7 gigawatts of bulk storage in the grid operator’s interconnection queue, and 1.5 gigawatts in utility interconnection queues, according to the commission.

The six utilities are Consolidated Edison Company of New York Inc., Central Hudson Gas & Electric Corporation, National Grid, New York State Electric & Gas Corporation, Orange and Rockland Utilities Inc., and Rochester Gas and Electric Corporation.