In a proposed decision issued yesterday from the California Public Utilities Commission, an administrative law judge (ALJ) determined that energy storage devices (i) that are paired with net energy metering- (NEM) eligible generation facilities, and (ii) that meet the Renewables Portfolio Standard Eligibility Guidebook requirements to be considered an "addition or enhancement" to NEM-eligible systems are "exempt from interconnection application fees, supplemental review fees, costs for distribution upgrades, and standby charges when interconnecting under current NEM tariffs.  

The issue of whether solar PV-integrated energy storage could interconnect through NEM tariffs heated up in recent months as utilities in California determined that such systems were not NEM-eligible and therefore imposed additional requirements (and costs) in order for a paired solar PV system itself to be NEM-eligible.  These requirements and costs acted as a barrier to using energy storage technologies with distributed generation.  But in this proposed decision, the ALJ encouraged the state’s utilities to take a "more proactive and collaborative approach to avoid creating barriers," and found that energy storage should be exempt from these additional requirements when certain conditions are met.  

Sizing.  The proposed decision states that NEM-paired storage systems with storage devices sized at 10 kW or smaller are not required to be sized to a customer’s demand or the NEM generator.  For NEM-paired storage systems with storage larger than 10 kW, (x) the discharge capacity of the storage system may not exceed the NEM generator’s maximum capacity, and (y) the maximum energy discharged by the storage device shall not exceed 12.5 hours of storage per kW. 

Metering.  With respect to metering requirements, the proposed decision again draws distinctions between storage systems above 10 kW discharge and those at 10 kW and below discharge capability, although the decision proposes to impose certain requirements on both categories in order to "preserve the integrity of NEM."  For systems at 10 kW and below, the decision proposes using a de-rate factor to measure the AC energy that flows into, and out of, the NEM generator.  NEM-paired systems larger than 10 kW will be required to adhere to metering requirements similar to those under the NEM Multiple Tariff Facilities provision of utilities’ NEM tariffs, although the costs of metering will be capped at $500.  In either category, the proposed requirements aim to ensure that only NEM-eligible generation receives NEM credit.  

The full proposed decision may be viewed here:  CPUC Proposed Decision re Energy Storage