Texas regulator proposes to deny AEP storage plan

Dive Brief:

The head of the Public Utility Commission of Texas (PUCT) is proposing to deny a battery storage proposal from American Electric Power, instead opening a separate docket to study the issues surrounding the emerging technology.
AEP's proposal included two lithium-ion battery systems that would be deployed as an alternative to traditional transmission and distribution upgrades. Chairman DeAnn Walker said the application would be dismissed without prejudice.
Walker noted several specific areas for the investigation to consider, including whether or not a utility needs approval to use non-traditional technologies to solve distribution problems.

Dive Insight:

Battery storage is becoming a more common solution for utilities to deploy, but each state has to find its own way. This is evidenced by Texas regulators mulling investigation into energy storage, while looking at how utilities deploy grid-edge technologies.

Walker said the proceeding would "take a wider view of the innovative concepts raised in this docket as well as other potential technological solutions."

In 2016, AEP North Texas proposed to install two lithium-ion battery systems as an alternative to more typical solutions. Estimated cost of the two battery systems was about $2.3 million — substantially less than AEP’s $11.3 million to $22.5 million estimate of what it would cost for traditional transmission upgrades. The project included a 1 MW, 2 MWh lithium-ion battery system at its Bush Knob substation in Woodson and a 500 kW, 1,000 kWh battery system in Paint Rock.

Walker's memo said there are many technologies with "significant promise" but many questions must be answered first.

"I believe we must take a measured review of all potential solutions to resolve infrastructure deficiencies in a reliable and cost effective manner," she wrote.

Specifically, Walker wants to discuss is how to treat the energy consumed by a new technology under current market rules. Walker also said she wanted to discuss whether a utility needs to obtain approval for the use of non-traditional technologies, even on the distribution grid.