The move was the latest step to address grid reliability concerns due to the limited use of the Aliso Canyon natural gas storage facility, which had a leak that has since been sealed and is undergoing tests to determine when it can be used.
Aliso Canyon, owned and operated by Sempra Energy’s Southern California Gas, is critical to help meet peak electricity demand in the summer by supplying natural gas-fired generators and for addressing peak gas usage during winter months. The limited operations at the facility have put SoCalGas at risk of not meeting generators’ needs and prompted the California ISO to seek tariff changes at FERC, with the possibility of electricity service interruptions in the Los Angeles area in the coming months.
In a presentation at the May 19 FERC meeting, officials told commissioners that with as much as 9,800 MW of gas-fired generation in the Los Angeles Basin using gas supplies supported by Aliso Canyon operations, the inability to use the facility could prompt natural gas curtailments and rotating power outages if grid conditions are stressed.
The CPUC has identified energy storage systems as one potential solution because they can be fast-responding, firm and dispatchable. Energy storage resources can be potentially constructed, interconnected, and deployed on a short timeline, according to a CPUC staff presentation shown at the May 26 meeting.
Based on current conditions, energy storage systems may help alleviate the reliability risks associated with the partial shutdown of Aliso Canyon, the CPUC said in a May 26 statement.
Under the approved plan, SCE shall solicit in-front-of-the-meter energy storage that must be operational by Dec. 31.
The order explained that storage resources placed behind the meter of a retail customer face less permitting and interconnection issues, but those resources are not “visible” to the California ISO to be able to dispatch for power supply needs. The California ISO is still developing its storage dispatch plan and because there is no clear protocol for the grid operator to dispatch behind-the-meter storage, the CPUC found it reasonable to limit SCE’s solicitation to in-front-of-the-meter storage options.
The order requires SCE to expedite the interconnection process to allow a utility-owned or a third-party-owned storage resource to connect to the utility’s grid, and all resources procured must connect at a location that helps alleviate reliability concerns associated with the partial shutdown of the Aliso Canyon facility.
The CPUC directed the utility to conduct its solicitation at the earliest opportunity, and said it intends to consider any contracts resulting from the solicitation in an expedited fashion.
Given that it is unclear how long the limited use of Aliso Canyon will last, “SCE may enter into contracts with terms of 10 years or less,” the CPUC said in the order.
Any SCE storage contracts will count towards the company’s overall storage mandate and meet its local capacity requirement needs. Resources procured in the solicitation must be price-competitive with previous solicitations in which SCE has awarded contracts to comparable energy storage resources, the CPUC said.
Further, SCE must ensure that any contracts entered into provide that sellers operate the energy storage facilities in accordance with prudent and safe electrical practices.
The order noted that SCE has proposed an aggressive schedule that calls for issuing the request for offers on May 27, with an offer submittal deadline of June 17. SCE is targeting CPUC approval on Sept. 15.