California Energy Storage Systems Exempt from Interconnection Charges

on June 03, 2014 at 10:00 AM

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A new California ruling exempts net energy metering-paired energy storage systems sized 10 kW or smaller from interconnection charges.

On May 15, 2014, the California Public Utilities Commission (CPUC) issued a decision exempting small storage devices paired with net energy metering (NEM)-eligible generation facilities from interconnection fees.  Fee exemption for NEM-paired storage would be tested on a provisional basis for systems connecting by December 31, 2015.  CPUC also requires utilities to refund interconnection charges levied on customers prior to the decision.

To ensure NEM program integrity, the CPUC decision places certain limitations on storage system sizing and implements metering requirements.  NEM-paired storage systems sized 10 kilowatts (kW) or smaller are eligible for the exemption and are not required to be sized to the customer demand or NEM generator.  Systems larger than 10 kW and do not require complex metering solutions have a $600 fee limit.  They must have a maximum output no larger than 150 percent of the NEM generator’s maximum output capacity and must install interval meters at the point of coupling and directly to the NEM-eligible generator.

In April 2013, the California Energy Commission issued the Renewable Portfolio Standard (RPS) Eligibility Guidebook establishing two energy storage categories – integrated and directly connected – that may be considered an addition or enhancement to a NEM-eligible renewable system.  The new CPUC decision clarifies uncertainties regarding interconnection fees exemption by ruling that storage devices that are paired with NEM-eligible generation facilities and meet the RPS Eligibility Guidebook requirements are exempt from interconnection application fees, supplemental review fees, distribution upgrade costs, and standby charges for interconnection under current NEM tariffs.


Net Metering (NEM) Costs & Benefits per California Utility (navigant)

The NEM program, created by Assembly Bill 656, is an electricity tariff billing mechanism that facilitates renewable distributed generation installations by offering customers retail-rebate billing credits for energy exported to the grid when generation exceeds onsite demand.  NEM program participants are exempt from interconnection costs.  In 2011, Senate Bill 489 expanded technologies for NEM tariff to include all RPS-eligible technologies.  Currently, electric utilities treat storage devices as distinct non-NEM-eligible generators under the Multiple Tariff Facilities provision and levy several charges including $800 interconnection application fee, standby charges, supplemental review fees for facilities that do not qualify for fast track interconnection, and costs of distribution upgrades triggered by adding the facility to the local grid.

Originally published by Energy Solutions Forum, May 16 2014. 

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