170714 IPC battery storage.pdf

Case No. IPC-E-17-01, Order No. 33785
Contact: Matt Evans, [phone] or 520-4763
www.puc.idaho.gov
Proposed battery storage facilities eligible
for two-year, negotiated contracts
BOISE (July 14, 2017) - The Idaho Public Utilities Commission has determined that five proposed
battery storage facilities qualify for contracts under PURPA based on their primary energy source,
making them eligible for two-year, negotiated contracts with Idaho Power.
Franklin Energy Storage LLC intends to construct four battery storage projects in Twin Falls
County. A fifth, proposed by Black Mesa Energy LLC, would be located in Elmore County.
Plans call for the batteries to be charged with energy from nearby solar projects capable of
generating 2.5 average megawatts. The electricity would be dispatched to Idaho Power under the
provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA).
PURPA requires electric utilities to purchase energy from qualifying independent power producers
but gives state regulators authority to determine the contract terms for PURPA-eligible facilities.
In Idaho, PURPA projects larger than 100 kilowatts and powered by intermittent sources such as
solar and wind are eligible for two-year contracts at a rate negotiated between the utility and the
developer (IRP methodology).
Franklin Energy contended that its storage projects should qualify for 20-year contracts at the
published rate set by the Commission.
In refusing to enter into 20-year contracts for the proposed facilities at the published rate, Idaho
Power is attempting to “change the rules in the middle of the game,” Franklin Energy said.
Idaho Power countered that the proposed facilities should be eligible for two-year contracts at a
negotiated rate because their primary energy source is solar.
The company claimed the battery storage facilities proposed by Franklin and Black Mesa are a
“blatant attempt to manipulate” the eligibility cap, to the detriment of its customers.
Idaho Power asked the Commission to issue a declaratory order confirming that the proposed
facilities, and battery storage facilities in general, are eligible for two-year, negotiated PURPA
contracts.
In their order, commissioners said they were unaware of any reference to battery storage in PURPA
or in regulations set by the Federal Energy Regulatory Commission (FERC), which implements
PURPA. Moreover, the Commission said, “the battery storage facilities’ QF status is a matter within
FERC’s jurisdiction and is not at issue in this case.”
The Commission was instead persuaded by a FERC order issued in 1990 that addressed the
treatment of battery storage facilities. In the Luz Development and Finance Corporation case, FERC
found that energy storage facilities are not per se small power producers as contemplated by
PURPA, and that a facility’s primary energy source must be considered.
Since the facilities proposed by Franklin and Black Mesa utilize solar as the primary energy source,
the Commission determined that the projects would only be eligible for two-year, negotiated
contracts.
“Accordingly, we find it appropriate to base Franklin’s and Black Mesa’s eligibility under PURPA on
its primary energy source – solar,” the Commission said.
The Commission’s order, along with other documents related to this case, is available on the
Commission’s website, puc.idaho.gov. Click on “File Room,” scroll down to “Electric Cases” and click
on IPC-E-17-01.