CHAPTER 7.7. Energy Storage Systems [2835. - 2839.]

Cal. Public Utilities Code - PUC 7.7.

in effect

Cal. Public Utilities Code - PUC § 2835. Section 2835.

For purposes of this chapter, the following terms have the following meanings: (a) (1) “Energy storage system” means commercially available technology that is capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy. An “energy storage system” may have any of the characteristics in paragraph (2), shall accomplish one of the purposes in paragraph (3), and shall meet at least one of the characteristics in paragraph (4). (2) An “energy storage system” may have any of the following characteristics: (A) Be either centralized or distributed. (B) Be either owned by a load-serving entity or local publicly owned electric utility, a customer of a load-serving entity or local publicly owned electric utility, or a third party, or is jointly owned by two or more of the above. (3) An “energy storage system” shall be cost effective and either reduce emissions of greenhouse gases, reduce demand for peak electrical generation, defer or substitute for an investment in generation, transmission, or distribution assets, or improve the reliable operation of the electrical transmission or distribution grid. (4) An “energy storage system” shall do one or more of the following: (A) Use mechanical, chemical, or thermal processes to store energy that was generated at one time for use at a later time. (B) Store thermal energy for direct use for heating or cooling at a later time in a manner that avoids the need to use electricity at that later time. (C) Use mechanical, chemical, or thermal processes to store energy generated from renewable resources for use at a later time. (D) Use mechanical, chemical, or thermal processes to store energy generated from mechanical processes that would otherwise be wasted for delivery at a later time. (b) “Load-serving entity” has the same meaning as defined in Section 380. (c) “New” means, in reference to an energy storage system, a system that is installed and first becomes operational after January 1, 2010. (d) “Offpeak” means, in reference to electrical demand, a period that is not within a peak demand period. (e) “Peak demand period” means a period of high daily, weekly, or seasonal demand for electricity. For purposes of this chapter, the peak demand period for a load-serving entity shall be determined, or approved, by the commission and shall be determined, or approved, for a local publicly owned electric utility, by its governing body. (f) “Procure” and “procurement” means, in reference to the procurement of an energy storage system, to acquire by ownership or by a contractual right to use the energy from, or the capacity of, including ancillary services, an energy storage system owned by a load-serving entity, local publicly owned electric utility, customer, or third party. Nothing in this chapter, and no action by the commission, shall discourage or disadvantage development and ownership of an energy storage system by an electrical corporation.

Cal. Public Utilities Code - PUC § 2836. Section 2836.

(a) (1) On or before March 1, 2012, the commission shall open a proceeding to determine appropriate targets, if any, for each load-serving entity to procure viable and cost-effective energy storage systems to be achieved by December 31, 2015, and December 31, 2020. As part of this proceeding, the commission may consider a variety of possible policies to encourage the cost-effective deployment of energy storage systems, including refinement of existing procurement methods to properly value energy storage systems. (2) The commission shall adopt the procurement targets, if determined to be appropriate pursuant to paragraph (1), by October 1, 2013. (3) The commission shall reevaluate the determinations made pursuant to this subdivision not less than once every three years. (4) Nothing in this section prohibits the commission’s evaluation and approval of any application for funding or recovery of costs of any ongoing or new development, trialing, and testing of energy storage projects or technologies outside of the proceeding required by this chapter. (b) (1) On or before March 1, 2012, the governing board of each local publicly owned electric utility shall initiate a process to determine appropriate targets, if any, for the utility to procure viable and cost-effective energy storage systems to be achieved by December 31, 2016, and December 31, 2020. As part of this proceeding, the governing board may consider a variety of possible policies to encourage the cost-effective deployment of energy storage systems, including refinement of existing procurement methods to properly value energy storage systems. (2) The governing board shall adopt the procurement targets, if determined to be appropriate pursuant to paragraph (1), by October 1, 2014. (3) The governing board shall reevaluate the determinations made pursuant to this subdivision not less than once every three years.

Cal. Public Utilities Code - PUC § 2836.2. Section 2836.2.

In adopting and reevaluating appropriate energy storage system procurement targets and policies pursuant to subdivision (a) of Section 2836, the commission shall do all of the following: (a) Consider existing operational data and results of testing and trial pilot projects from existing energy storage facilities. (b) Consider available information from the California Independent System Operator derived from California Independent System Operator testing and evaluation procedures. (c) Consider the integration of energy storage technologies with other programs, including demand-side management or other means of achieving the purposes identified in Section 2837 that will result in the most efficient use of generation resources and cost-effective energy efficient grid integration and management. (d) Ensure that the energy storage system procurement targets and policies that are established are technologically viable and cost effective.

Cal. Public Utilities Code - PUC § 2836.4. Section 2836.4.

(a) An energy storage system may be used to meet the resource adequacy requirements established for a load-serving entity pursuant to Section 380 if it meets applicable standards. (b) An energy storage system may be used to meet the resource adequacy requirements established by a local publicly owned electric utility pursuant to Section 9620 if it meets applicable standards.

Cal. Public Utilities Code - PUC § 2836.6. Section 2836.6.

All procurement of energy storage systems by a load-serving entity or local publicly owned electric utility shall be cost effective.

Cal. Public Utilities Code - PUC § 2836.7. Section 2836.7.

By June 1, 2018, all of the following shall occur: (a) (1) The Los Angeles Department of Water and Power shall, in coordination with the city council of the City of Los Angeles, if it chooses to participate, determine the cost-effectiveness and feasibility of deploying, on an expedited basis, a minimum aggregate total of 100 megawatts of cost-effective energy storage solutions to help address the Los Angeles Basin’s electrical system operational limitations resulting from reduced gas deliverability from the Aliso Canyon natural gas storage facility. (2) If the Los Angeles Department of Water and Power determines pursuant to paragraph (1) that deploying the cost-effective energy storage solutions, as described in paragraph (1), is cost effective and feasible, it shall consider deploying those cost-effective energy storage solutions after June 1, 2018. (b) The commission shall, to the extent that doing so is cost effective and feasible and necessary to meet the reliability requirements of the electrical system in the Los Angeles Basin, direct an electrical corporation serving the Los Angeles Basin to deploy, pursuant to a competitive solicitation, a minimum aggregate total of 20 megawatts of cost-effective energy storage solutions to help address the Los Angeles Basin’s electrical system operational limitations resulting from reduced gas deliverability from the Aliso Canyon natural gas storage facility. An electrical corporation may count any cost-effective energy storage solution that it deploys pursuant to this subdivision towards the capacity requirement established pursuant to Section 2838.2 if the cost-effective storage solution that it deploys is a distributed energy storage system, as defined in subdivision (a) of Section 2838.2. (c) (1) It is the intent of the Legislature that the commission and all public utilities having jurisdiction affected by this section or by actions taken pursuant to this section shall take immediate actions to support rapid compliance with this section, including by allowing or developing fast-tracked permitting, interconnection studies, and interconnection processes, and through rule waivers or adjustments if appropriate, to support rapid or more rapid site acquisition for energy storage project developments and customer acquisition of energy storage solutions. This paragraph is not intended to in any way modify the obligations of the commission or a public utility under the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code). (2) It is the intent of the Legislature that local governments having jurisdiction affected by this section or by actions taken pursuant to this section strongly consider taking immediate actions to support rapid compliance with this section, including by allowing or developing fast-tracked permitting and waiving or adjusting procedural requirements, to support rapid or more rapid site acquisition for energy storage project developments and customer acquisition of energy storage solutions. This paragraph is not intended to in any way modify the obligations of a local government under the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code). (d) For purposes of this section, the following terms have the following meanings: (1) “Cost-effective energy storage solution” means any grid-connected energy storage facility developed on or after the effective date of this section of any type or technology, including transmission-connected, distribution-connected, and behind-the-meter sited or located resources, that will mitigate the limitation on gas storage capacity and gas deliverability resulting from the well failure at the Aliso Canyon natural gas storage facility. Cost-effective energy storage solutions shall be designed to be capable of providing a four-hour duration resource adequacy service, which may include energy delivery for the full four hours at a rated output, and shall be capable of delivering electricity to the source of demand and required to accept and execute reasonable remote or centralized dispatch commands. (2) To “deploy” means to procure a cost-effective energy storage solution on or after the effective date of this section that may be a third-party-owned solution, or a solution procured pursuant to a power-purchase agreement or rebate program, or pursuant to any other third-party ownership structure, as allowed by applicable rules governing electric service and procurement, sited or located where the project will mitigate the limitation on gas storage capacity and gas deliverability resulting from the well failure at the Aliso Canyon natural gas storage facility. (3) “Los Angeles Basin” means the area identified as the “Aliso Canyon Delivery Area” on page 11 of the Aliso Canyon Risk Assessment Technical Report, dated April 5, 2016.

Cal. Public Utilities Code - PUC § 2837. Section 2837.

Each electrical corporation’s renewable energy procurement plan, prepared and approved pursuant to Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1, shall require the utility to procure new energy storage systems that are appropriate to allow the electrical corporation to comply with the energy storage system procurement targets and policies adopted pursuant to Section 2836. The plan shall address the acquisition and use of energy storage systems in order to achieve the following purposes: (a) Integrate intermittent generation from eligible renewable energy resources into the reliable operation of the transmission and distribution grid. (b) Allow intermittent generation from eligible renewable energy resources to operate at or near full capacity. (c) Reduce the need for new fossil-fuel powered peaking generation facilities by using stored electricity to meet peak demand. (d) Reduce purchases of electricity generation sources with higher emissions of greenhouse gases. (e) Eliminate or reduce transmission and distribution losses, including increased losses during periods of congestion on the grid. (f) Reduce the demand for electricity during peak periods and achieve permanent load-shifting by using thermal storage to meet air-conditioning needs. (g) Avoid or delay investments in transmission and distribution system upgrades. (h) Use energy storage systems to provide the ancillary services otherwise provided by fossil-fueled generating facilities.

Cal. Public Utilities Code - PUC § 2838. Section 2838.

(a) (1) By January 1, 2016, each load-serving entity shall submit a report to the commission demonstrating that it has complied with the energy storage system procurement targets and policies adopted by the commission pursuant to subdivision (a) of Section 2836. (2) By January 1, 2021, each load-serving entity shall submit a report to the commission demonstrating that it has complied with the energy storage system procurement targets and policies adopted by the commission pursuant to subdivision (a) of Section 2836. (b) The commission shall ensure that a copy of each report required by subdivision (a), with any confidential information redacted, is available on the commission’s Internet Web site.

Cal. Public Utilities Code - PUC § 2838.2. Section 2838.2.

(a) The following definitions apply to this section: (1) “Distributed energy storage system” means an energy storage system with a useful life of at least 10 years that is connected to the distribution system or is located on the customer side of the meter. (2) “Energy storage management system” means a system by which an electrical corporation can manage the charging and discharging of the distributed energy storage system in a manner that provides benefits to ratepayers. (b) The commission, in consultation with the State Air Resources Board and the Energy Commission, shall direct the state’s three largest electrical corporations to file applications for programs and investments to accelerate widespread deployment of distributed energy storage systems to achieve ratepayer benefits, reduce dependence on petroleum, meet air quality standards, and reduce emissions of greenhouse gases. Programs and investments proposed by the state’s three largest electrical corporations shall seek to minimize overall costs and maximize overall benefits. (c) (1) The commission may approve, or modify and approve, programs and investments of an electrical corporation in distributed energy storage systems with appropriate energy storage management systems and reasonable mechanisms for cost recovery, if they are consistent with the requirements of this section and do not unreasonably limit or impair the ability of nonutility enterprises to market and deploy energy storage systems. The total capacity of the programs and investments in distributed energy storage systems approved by the commission pursuant to this section shall not exceed 500 megawatts, divided equally among the state’s three largest electrical corporations. (2) No more than 25 percent of the capacity of distributed energy storage systems approved for programs and investments pursuant to this section shall be provided by behind-the-meter systems. (3) The capacity authorized pursuant to paragraph (1) is in addition to any investments authorized pursuant to Section 2836. (d) (1) The commission shall resolve each application filed by an electrical corporation pursuant to this section within 12 months of the date of filing of the completed application. (2) The commission shall prioritize those programs and investments that provide distributed energy storage systems to public sector and low-income customers.

Cal. Public Utilities Code - PUC § 2838.3. Section 2838.3.

It is the intent of the Legislature that the commission, in authorizing an electrical corporation to recover the costs of approved energy storage programs and investments from all customers pursuant to Section 2838.2, shall ensure that the costs for the programs and investments are recovered in proportion to the benefits received, consistent with Section 451.

Cal. Public Utilities Code - PUC § 2838.5. Section 2838.5.

Notwithstanding any provision of this chapter, the requirements of this chapter do not apply to either of the following: (a) An electrical corporation that has 60,000 or fewer customer accounts within California. (b) A public utility district that receives all of its electricity pursuant to a preference right adopted and authorized by the United States Congress pursuant to Section 4 of the Trinity River Division Act of August 12, 1955 (Public Law 84-386).

Cal. Public Utilities Code - PUC § 2839. Section 2839.

The commission does not have authority or jurisdiction to enforce any of the requirements of this chapter against a local publicly owned electric utility.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026