Dive Brief:

• Idaho-based Franklin Energy has asked the Federal Energy Regulatory Commission to reverse a state ruling that limited contracts for storage resources under the Public Utility Regulatory Policies Act (PURPA) to just two years after the company's request for rehearing was denied.
• Franklin Energy had requested PURPA contracts for four storage facilities that would be charged by solar power and have an average capacity of 2.5 MW. Company officials say there is a "fundamental difference" between energy storage and standalone intermittent resources. However, regulators said that since the primary source of energy comes from solar, it should be subject to the same contract lengths as other renewable energy projects under PURPA. 
• Three years ago, the Idaho Public Utilities Commission shortened the term of renewable energy power purchase agreements under PURPA to two years from 20 years. Shorter contracts will not offer Franklin Energy the stability its proposed storage project requires, which The Spokesman-Review says leaves the $200 million lithium-ion proposal in doubt.

Dive Insight:

"There's a fundamental difference between what a battery project can do and what a stand-alone wind project or solar project can do," Franklin Energy attorney Peter Richardson told the newspaper.

As the price of renewable energy and battery storage declines, it has set off debates in several states over how the 1978 utility law is implemented and whether lengthier contracts should be replaced with shorter terms and lower avoided cost rates. 

Franklin's primary source of energy to charge the batteries would be solar power. Last year, Idaho regulators ruled it should receive the same two-year contract that a solar farm would receive. In making that decision, the PUC revisited a 1990 case it cited for precedent involving a Luz storage project in which FERC ruled that the primary source of a storage facility’s electric power had to be taken into consideration.

Project developers, however, say the solar-plus-storage project is a dispatchable resource rather than intermittent generation because of the ability to store energy.

Idaho regulators also noted that six years ago, the commission limited wind and solar projects that can qualify for PURPA 20-year contracts to not more than 100 kW. Changes to PURPA contract rules have come after utilities argued the law forces to buy unnecessary and expensive.