Energy Storage Target

In 2016, H.B. 4568 was enacted requiring the Department of Energy Resources to determine whether or not to set targets for utilities to procure viable and cost-effective energy storage systems by January 1, 2020. Following a stakeholder process, the Department adopted a target of 200 MWh. Subsequent legislation enacted in 2018 (H.B. 4857) adopted an additional energy storage procurement target of 1,000 MWh by December 31, 2025. The bill also authorized the Department to consider a variety of policies to encourage the cost-effective deployment of energy storage systems, including the refinement of existing procurement methods to properly value energy storage systems, inclusion in energy portfolio standards, the use of alternative compliance payments to develop pilot programs, and the use of energy efficiency funds if the Department determines that energy storage systems installed at a customer’s premises provide sustainable peak load reductions on either the electric or gas distribution systems. In 2024, legislation (S.B. 2967) was enacted directing every utility to jointly and competitively solicit proposals for energy storage systems, entering into cost-effective long-term contracts for up to 5 GW of energy storage, of which 3.5 GW must be mid-duration energy storage, 750 MW being long-duration storage, and 750 MW of multi-day storage. 1.5 GW of mid-duration storage must be procured by July 31, 2025, for environmental attributes only, 1 GW of mid-duration storage by July 31, 2026, and 1 GW of mid-duration storage by July 31, 2027, and all remaining storage capacity to be procured by July 31, 2030. In aggregate, distribution companies must enter into long-term contracts for up to 5 GW of storage by July 31, 2030, a new procurement target for the state. Existing energy storage systems are eligible to participate in any procurement proposals issued.