BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2868           Hearing Date:    8/24/2016
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          |Author:    |Gatto                                                |
          |-----------+-----------------------------------------------------|
          |Version:   |8/19/2016    As amended                              |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Jay Dickenson                                        |
          |           |                                                     |
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          SUBJECT: Energy storage

            DIGEST:    This bill requires investor-owned utilities (IOUs) to  
          file applications with the California Public Utilities  
          Commission (CPUC) for programs and investments to accelerate  
          widespread deployment of distributed energy storage systems.  
           
          ANALYSIS:
          
          Existing law:
          
          1)Requires the CPUC to determine appropriate targets, if any,  
            for load-serving entities (LSEs) to procure energy storage  
            systems.  Requires LSEs to meet any targets adopted by the  
            CPUC by 2015 and 2020.  Requires publicly owned utilities  
            (POUs) to set their own targets for the procurement of energy  
            storage and then meet those targets by 2016 and 2021.  (Public  
            Utilities Code §2835 et seq.) 

          2)Directs the California Energy Commission (CEC) and the CPUC,  
            where feasible, to authorize procurement of resources to  
            provide grid reliability services that minimize reliance on  
            system power and fossil fuel resources and, where feasible,  
            cost effective, and consistent with other state policy  
            objectives, increase the use of large- and small-scale energy  
            storage.  (Public Utilities Code §400) 









          AB 2868 (Gatto)                                    Page 2 of ?
          
          3)Authorizes, beginning January 1, 2018, the CPUC to require or  
            authorize an IOU to employ default time-of-use (TOU) pricing  
            for residential customers. (Public Utilities Code §745)



          This bill:

          1)Declares it the policy of the state and intent of the  
            Legislature to encourage energy storage as a means to achieve  
            ratepayer benefits, ambient air quality standards, and the  
            state's climate change goals.

          2)Requires the CPUC, in consultation with the California Air  
            Resources Board (ARB) and the CEC, to direct the IOUs to file  
            applications for programs and investments to accelerate  
            widespread deployment of distributed energy storage systems.

          3)Limits an IOU's storage programs and investments to five  
            percent of the IOU's annual peak load, up to 250 megawatts  
            (MW), and dedicates at least 20 percent of the storage  
            capacity in an IOU's approved storage programs and investments  
            to the benefit of public schools and military installations.

          4)Authorizes the CPUC, within 12 months, to approve, or modify  
            and approve, an IOU's storage programs and investments with,  
            among other things, reasonable mechanisms for cost recovery,  
            on a nonbypasable basis, from all distribution customers for  
            distribution-level energy storage systems and from  
            transmission customers for transmission-level distribution  
            storage systems.

          5)States that the CPUC shall approve and IOU's application for  
            storage programs and investments if it is consistent with the  
            requirements of this bill and does not unreasonably limit or  
            impair the ability of nonutility enterprises to market and  
            deploy energy storage systems to other customers, and is in  
            the interest of ratepayers.

          6)Directs the CPUC to first approve storage programs and  
            investments that provide distributed energy storage systems to  
            industrial, commercial, school, military, and low-income  
            customers, and, as of January 1, 2019, authorizes the CPUC to  
            approve IOU programs and investments offered to residential  
            customers enrolled in time-variant pricing.








          AB 2868 (Gatto)                                    Page 3 of ?
          
          7)Directs the CPUC to ensure costs for IOU storage programs and  
            investments are recovered through transmission, distribution  
            and generation rate components in proportion to the benefits  
            received.

          8)Prohibits the CPUC from establishing a separate fund for this  
            program.


          Background

          State encourages procurement of energy storage.  As the state  
          becomes increasingly reliant on intermittent renewable energy  
          resources, it will need options to allow it to flexibly manage  
          electric supply and demand.  Energy storage is one technology  
          that allows for such flexible management.

          Existing state programs seek to foster development and  
          deployment of energy storage systems.  Statute requires the CPUC  
          to determine appropriate targets, if any, for LSEs to procure  
          energy storage systems by 2015 and 2020, and directed POUs to  
          set their own comparable energy storage system procurement  
          targets. [AB 2514, Skinner, Chapter 469, Statutes of 2010).]   
          The CPUC, in implementing AB 2514, established energy storage  
          system procurement targets applicable to the state's three  
          largest electric IOUs totaling 1,325 MW. [See CPUC Decision  
          13-10-040.]

          The CPUC reports the IOUs have each progressed in meeting their  
          energy storage procurement goals.  However, none has yet met its  
          final procurement goal in any category, other than Southern  
          California Edison (SCE), which has already exceeded the  
          procurement goal for customer-side storage several times over.

          The state has also provided financial incentives to energy  
          storage systems.   Over the last several years, the CPUC reports  
          that the Self-Generation Incentive Program (SGIP), which the  
          CPUC administers, has awarded $42 million to nearly 1,200 energy  
          storage projects. 


           ------------------------------------------------------------------- 
          |               SGIP Awards to Energy Storage Systems               |
           ------------------------------------------------------------------- 
          |---------+------+------------+----------+------------+-------------|
          | Years   |Projec| Installed  |Incentive |  Reserved  | Incentives  |







          AB 2868 (Gatto)                                    Page 4 of ?
          
          |2009-2015|  ts  |  Capacity  |   Paid   |  Capacity  |  Reserved   |
          |         |      |    (kW)    |          |    (kW)    |             |
          |---------+------+------------+----------+------------+-------------|
          |   Totals|  1175|            |$41,547,42|            |             |
          |         |      |            |        6 |            |$149,215,781 |
          |         |      |            |          |            |             |
          |         |      |         23 |          |         92 |             |
           ------------------------------------------------------------------- 

          Recently, the CPUC modified SGIP to dedicate 75 percent of  
          funding to energy storage systems, and the Legislature is  
          considering doubling the program budget, to a total annual  
          budget of $163 million.  A primary rationale for this  
          storage-focus is the CPUC staff's belief that the energy storage  
          industry is ripe for market transformation, so that system  
          subsidies have the potential or even the likelihood to lead to  
          decreases in energy storage system costs.

          Time-of-use rates (TOU).  Time-variant rates, such as TOU rates,  
          are a mechanism to shape demand for energy.  TOU rates rely on  
          price signals to encourage customers to reduce their use of  
          electricity when the relative availability of electricity is low  
          or, in some cases, to increase their electricity use when  
          relative supply is abundant. 

          Currently, the CPUC requires all commercial and industrial  
          customers of the IOUs to participate in TOU rates.  Statute  
          authorizes the CPUC to allow or require IOUs to offer TOU rates  
          to residential customers beginning in 2018.  The CPUC has  
          recently required the IOUs to offer mandatory TOU rates to  
          residential customers beginning in 2019, with the option for the  
          customer to opt out of such rates at his or her request.  

          The use of energy storage systems has the potential to  
          complement time-variant rates, such as TOU rates.  This is  
          because the operator of an energy storage system of a customer  
          on TOU rates could charge the storage system when electricity  
          rates are low (signaling abundance) and discharge the storage  
          system when electricity rates are high (signaling scarcity). 

          Focus on customer-side energy storage meant to ensure storage  
          systems benefit customers directly.  This bill limits the energy  
          storage programs and investments the IOUs are to propose to only  
          systems located on the customer side of the electricity meter.   
          The limitation prevents the IOUs from proposing programs and  
          investments in energy storage systems to be installed on  







          AB 2868 (Gatto)                                    Page 5 of ?
          
          electricity transmission or distribution systems.  This is by  
          design.  The author reports that he intends the IOUs' programs  
          and investments to benefit IOU customers as a whole and  
          individual customers specifically; the author concludes that the  
          best way to ensure individual customers benefit from the IOU  
          programs and investments is to limit them to the customer side  
          of the meter.

          Arguably, individual customers can benefit from energy storage  
          systems located at the transmission level, the distribution  
          level and behind the customer meter.  

          Several changes, seeking several more.  When the committee first  
          heard this bill on June 27 of this year, this bill required IOUs  
          to file applications with the CPUC for programs and investments  
          to accelerate widespread deployment of distributed energy  
          storage systems.  It still does.  Nonetheless, the author has  
          amended this bill substantially since this committee heard this  
          bill.  Those amendments resulted from negotiations among diverse  
          stakeholders.  Despite those amendments, it appears a number of  
          additional amendments are needed to resolve the concerns of  
          those stakeholders.  Each of those proposed amendments is  
          summarized below.  

                 Ensure competition in energy storage marketplace.  This  
               bill defines this term as "an energy storage system with a  
               useful life of at least 10 years that is located on the  
               customer side of the meter."  This definition is consistent  
               with the author's intent that the IOU's programs and  
               investments to benefit IOU customers as a whole and  
               individual customers specifically.  

          However, the representatives of the nonutility storage industry  
          express concern that the IOU's storage programs and investments  
          will not allow the industry to fairly compete in the storage  
          market.  This committee amended the version of this bill it  
          heard in June to help ensure such competition.  It did so by  
          directing the CPUC to approve an IOU's storage programs and  
          investments provided they do not compete unfairly with  
          nonutility enterprises, defining "compete unfairly with  
          nonutility enterprises" to mean to eliminate the ability of  
          nonutility enterprises to install distributed energy storage  
          systems for the benefit of utility customers. 

          Subsequent amendments to this bill deleted the language added by  
          the committee to ensure competition.  The subsequent amendments  







          AB 2868 (Gatto)                                    Page 6 of ?
          
          tried to ensure competition by instead directing the CPUC to  
          approve an IOU's application for storage programs and  
          investments so long as it does not unreasonably limit or impair  
          the ability of nonutility enterprises to market and deploy  
          energy storage systems to other customers.  However, this  
          language is too vague to adequately ensure competition.  For  
          example, it is unclear what is meant by "other customers."  The  
          author's staff suggested that "other customers" means those  
          customers who do not have existing energy storage systems.  But  
          the text does not support that interpretation.

          The author has proposed further amendments that eliminate this  
          bill's current language regarding competition.  Instead, the  
          author proposes to introduce four amendments to this bill meant  
          to ensure competition by nonutility enterprises.  

          The first proposed amendment to address competition provides an  
          alternative definition of "distributed energy storage system."  
          Currently, this bill defines such a system as one located only  
          on the customer side of the meter.  The amendment instead  
          expands the definition of such a system to also include one  
          connected to the electricity distribution system.  The second  
          proposed amendment caps the total amount of IOU storage programs  
          and investments at 500 MW, divided equally among IOUs, while the  
          third amendment caps at 25 percent the amount of distributed  
          energy storage systems that can be dedicated to behind-the-meter  
          programs and investments.  Finally, the author proposes an  
          amendment that explicitly directs the CPUC approve an IOU's  
          storage programs and investments only if they do not  
          unreasonably limit or impair the ability of nonutility  
          enterprises to market and deploy energy storage systems.

          So, the proposed amendments described above explicitly ensure  
          storage market competition and cap IOU participation in that  
          marketplace.  The proposed amendments are consistent with  
          amendments made to this bill by this committee and, in fact,  
          better ensure storage market competition.  The committee should  
          support these amendments.

                 In addition to, not instead of.  The author proposes  
               amendments to explicitly state that the MW authorized by  
               the CPUC as part of an IOU's programs and investments in  
               distributed energy storage systems are in addition to IOU  
               investments to achieve energy storage target authorized by  
               the CPUC in keeping with statute.  The prior committee  
               analysis of this bill assumed the programs and investments  







          AB 2868 (Gatto)                                    Page 7 of ?
          
               to be additional to IOU investments to meet existing energy  
               storage targets.  The committee should support these  
               amendments.

                 Sector targets out, public-sector prioritized,  
               industrial and commercial sector demoted.  The author also  
               proposes amendments that would do away with the requirement  
               that at least 20 percent of the storage capacity of an  
               IOU's approved programs and investments go to the benefit  
               of public schools and military installations.  The author  
               proposes amendments that, instead, direct the commission to  
               prioritize programs and investments to public-sector  
               customers, as well as low-income customers (as did prior  
               versions of the bill).  
          
          When this committee first heard this bill, this bill included no  
          set-aside for public schools or military installations.   
          Therefore, there is no concern, from this committee's  
          perspective, with removing the set-aside.  However, this  
          committee approved this bill when it included a requirement that  
          the CPUC prioritize programs and investments that provide  
          distributed energy systems to industrial and commercial  
          customers, as well as low-income customers.  This committee  
          should ask the author to explain why it is appropriate to  
          promote public sector customers and demote industrial and  
          commercial customers.

                 Prescribing cost recovery, yet confusion remains.  The  
               author has proposed amendments that would add language  
               prescribing that the CPUC ensure that the costs for  
               programs and investments are recovered through  
               transmission, distribution and generation rate components  
               in proportion to the benefits received.  This language was  
               requested by representatives of community choice  
               aggregators (CCAs), who express concern their customers  
               might face costs for programs and investments from which  
               they do not benefit.

          The CCAs requested this bill be amended to include similar  
          language when this bill was first heard by this committee; this  
          committee chose not to request the author to amend this bill in  
          this way.  Yet, the language appears in the latest version of  
          this bill. 

          The language is unnecessary:  the CPUC can approve rates only to  
          the extent that they are just and reasonable.   Therefore, in  







          AB 2868 (Gatto)                                    Page 8 of ?
          
          theory, the CPUC cannot allow recovery of costs that are  
          significantly unproportional to the benefit received.  The CCAs  
          report they are nonetheless comforted by language that  
          explicitly prescribes the general rule the CPUC is to follow  
          when determining how costs are to be recovered.  

          In contrast, representatives of the IOUs characterize this  
          bill's cost recovery provisions as confusing.  They note,  
          accurately, that this bill includes three separate provisions on  
          cost recovery - Section 2838.2(c)(1), Section 2832.2(e)(3) and  
          Section 2838.2(f).  It is unwise to provide the CPUC such  
          unclear direction on how to determine cost recovery.  Better to  
          allow the CPUC to determine cost allocation as part of its  
          public ratemaking process.  This committee should ask the author  
          agree to amend this bill to direct the CPUC to ensure costs are  
          recovered from all ratepayers:

                       2838.2(e)(3) The commission shall ensure that costs  
                       for the programs and investments are recovered on a  
                       nonbypassable basis  The commission shall ensure  
                       that the costs for the programs and investments are  
                       recovered through transmission, distribution, and  
                       generation rate components in proportion to the  
                       benefits received..  
           
          The other sections addressing cost recovery - 2838.2(c)(1),  
          2838.2(e)(1) and 2838.2(f) - should be amended to conform with  
          this change, as shown below.

          Senate rules prevent this committee from amending this bill  
          further.  Therefore, the author may wish to provide assurance to  
          this committee that he will make the amendments, summarized  
          above and shown in detail below, to this bill on the Senate  
          floor.

          Suggested amendments (highlighted - additions underlined;  
          deletions struck out).

                The people of the State of California do enact as follows:


               SECTION 1. (a) The Legislature finds and declares all of  
               the following:

               (1) The state, through the Public Utilities Commission, has  
               taken action to promote energy storage, including setting  







          AB 2868 (Gatto)                                    Page 9 of ?
          
               energy storage procurement targets applicable for certain  
               load-serving entities, totaling 1,325 megawatts, and for  
               all other load-serving entities, to be met by 2020, with  
               installations of the energy storage systems meeting the  
               procurement targets by no later than the end of 2024.

               (2) Ratepayer funding is currently allowed to provide  
               incentives to customers who purchase energy storage for  
               permanent load shifting.

               (3) The Legislature reauthorized the self-generation  
               incentive program to provide incentives to customers who  
               achieve reductions in the emissions of greenhouse gases  
               using technologies like energy storage.

               (4) The State Energy Resources Conservation and Development  
               Commission funds research and demonstration programs to  
               further the effectiveness of energy storage as an important  
               resource to the electric grid through the Electric Program  
               Investment Charge.

               (5) Federal Energy Regulatory Commission Order No. 792  
               directs transmission providers to define energy storage  
               devices as generating facilities, thereby enabling these  
               resources to take advantage of generator interconnection  
               procedures.

               (6) Industrial and commercial customers are subject to the  
               time-of-use tariffs of the load-serving entity providing  
               electric services, some of which also include demand  
               charges. Industrial and commercial customers have  
               challenges modifying their businesses to manage their  
               electricity consumption and costs.

               (7) Section 745 of the Public Utilities Code authorizes the  
               commission to require or authorize an electrical  
               corporation to employ default time-of-use pricing for  
               residential customers.

               (8) Changes in customer electricity usage will modify the  
               peak time for electricity demand and effect demand charges  
               in rate design.

               (9) Properly designed and dispatched energy storage systems  
               will help customers manage energy costs, help reduce  
               overall system peak energy demands, improve public health,  







          AB 2868 (Gatto)                                    Page 10 of ?
          
               and assist in achieving greenhouse gas emissions goals.

               (10) Increased demand for energy storage technologies will  
               drive new business opportunities and create jobs.

               (11) Easing energy costs for large energy users will help  
               keep manufacturing and industrial jobs in California.

               (b) It is the policy of the state and the intent of the  
               Legislature to encourage energy storage as a means to  
               achieve ratepayer benefits, ambient air quality standards,  
               and the state's climate change goals.

               SEC. 2. Section 2838.2 is added to the Public Utilities  
               Code, to read:
                 

               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  
                connected to the distribution system or   that 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  
               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 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 as described in subdivision (e)(3)  from all  







          AB 2868 (Gatto)                                    Page 11 of ?
          
               distribution customers for distribution level distributed  
               energy storage systems, and from transmission customers for  
               transmission level distributed energy storage,    if they are  
               consistent with this section, and do not unreasonably limit  
               or impair the ability of non-utility enterprises to market  
               and deploy energy storage  systems  , if they are consistent  
               with this section, do not compete unfairly with nonutility  
               enterprises, and are in the interest of the ratepayers  .  An  
               electrical corporation's programs and investments in  
               distributed energy storage systems shall not exceed 5  
               percent of the electrical corporation's annual peak load,  
               up to 250 megawatts  .  The total amount of programs and  
               investments in distributed energy storage systems across  
               all electrical corporations pursuant to this section shall  
               not exceed 500 megawatts, divided equally among electrical  
               corporations.
                
               (2) No more than 25 percent of the distributed energy  
               storage systems approved under this section, shall be  
               dedicated to behind-the-meter programs and investments.

               (3) The megawatts authorized under subdivision (c)(1) are  
               in addition to any investments authorized pursuant to  
               section 2836.    
               
                (2) A minimum of 20 percent of the storage capacity in an  
               electrical corporation's approved programs and investments  
               in distributed energy storage systems may shall be set  
               aside dedicated to the benefit of public schools and  
               military installations. The electrical corporation shall  
               allocate the benefits of this dedicated storage capacity to  
               benefitting schools and military installations by reducing  
               the customer's metered demand in an amount equivalent to  
               the demand served by the storage that has been dedicated to  
               these customers pursuant to this section.
                
                (d) The commission shall approve an electrical  
               corporation's application for a program or investment in  
               distributed energy storage systems if it is consistent with  
               the requirements of this section, does not unreasonably  
               limit or impair the ability of nonutility enterprises to  
               market and deploy energy storage systems to other  
               customers, and is in the interest of ratepayers.
                
               (e) (1) The commission shall  resolve   approve, or modify and  
               approve, each application filed by an electrical  







          AB 2868 (Gatto)                                    Page 12 of ?
          
               corporation pursuant to this section within 12 months of  
               the date of filing of the completed application.  The costs  
               associated with storage investments authorized by the  
               commission shall be recoverable from all electricity  
               customers on a nonbypassable basis.  

               (2) The commission shall  prioritize   first approve  those  
               programs and investments that provide distributed energy  
               storage systems to  public sector   industrial, commercial,  
               school, military,  and low-income customers.  Beginning  
               January 1, 2019, the commission may approve programs and  
               investments offered to residential customers who enroll in  
               time-variant pricing pursuant to Section 745.
                
                (3)For purposes of this subdivision, to "compete unfairly  
               with nonutility enterprises" means to eliminate the ability  
               of nonutility enterprises to install distributed energy  
               storage systems for the benefit of utility customers.

               (d)This section shall remain in effect only until January  
               1, 2020, and as of that date is repealed, unless a later  
               enacted statute, that is enacted before January 1, 2020,  
               deletes or extends that date.
                
           (3) The commission shall ensure that costs for the programs and  
          investments are recovered on a nonbypassable basis   The  
          commission shall ensure that the costs for the programs and  
          investments are recovered through transmission, distribution,  
          and generation rate components in proportion to the benefits  
          received  .  
           
          (f) The commission shall not establish a separate fund for this  
          program but shall allow standard cost recovery by an electrical  
          corporation,  consistent with subdivision (e)(3).
           
               SEC. 3. No reimbursement is required by this act pursuant  
               to Section 6 of Article XIII                           B of  
               the California Constitution because the only costs that may  
               be incurred by a local agency or school district will be  
               incurred because this act creates a new crime or  
               infraction, eliminates a crime or infraction, or changes  
               the penalty for a crime or infraction, within the meaning  
               of Section 17556 of the Government Code, or changes the  
               definition of a crime within the meaning of Section 6 of  
               Article XIII                                           B of  
               the California Constitution.







          AB 2868 (Gatto)                                    Page 13 of ?
          

          Prior/Related Legislation
          
          AB 2514 (Skinner, Chapter 469, Statutes of 2010) required the  
          CPUC to determine appropriate targets, if any, for LSEs to  
          procure energy storage systems.  The bill required LSEs to meet  
          any targets adopted by the CPUC by 2015 and 2020.  The bill  
          required POUs to set their own targets for the procurement of  
          energy storage and then meet those targets by 2016 and 2021.

          AB 33 (Quirk, 2015) reiterates existing law, which states that  
          new pumped hydroelectric storage facilitates eligible for any  
          increased energy storage system targets adopted by the CPUC.   
          The bill is pending before the full Senate.

          SB 886 (Pavley, 2015) requires appropriate energy storage system  
          procurement targets; requires each load-serving entity and  
          locally owned public electric utility to plan for the  
          procurement of energy storage systems before fossil-fuel-based  
          generation; and requires each electrical corporation to propose  
          measures to encourage customers to install energy storage  
          systems.  The bill passed the Senate 25-14 and was held in the  
          Assembly Committee on Appropriations

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          Yes  




          According to the Senate Appropriations Committee:

           One-time costs of approximately $500,000 (Utilities  
            Reimbursement Account) to the CPUC for a consulting budget.


           Approximately $419,000 (Utilities Reimbursement Account)  
            annually to the CPUC for staffing costs. 


           Minor costs to the ARB for consultation.

            SUPPORT:  

          Association of California Water Agencies
          California State Association of Electrical Workers







          AB 2868 (Gatto)                                    Page 14 of ?
          
          Coalition of California Utility Employees
          San Diego County Water Authority
          SolarCity
          Stem, with amendments
          OPPOSITION:

          Advanced Energy Economy
          California Energy Storage Alliance
          California Solar Industries Association
          Marin Clean Energy
          San Francisco Public Utilities Commission
          Silicon Valley Leadership Group
          Solar Energy Industries Association
          Sonoma Clean Power
          TechNet
          The Alliance for Solar Choice
          The Utility Reform Network, oppose unless amended

          ARGUMENTS IN SUPPORT:  According to the author:

          This bill requires the CPUC, in consultation with the ARB and  
          the State Energy Resources Conservation and Development  
          Commission, to direct electric corporations to file applications  
          for programs and investments to accelerate widespread deployment  
          of distributed energy storage systems. 

          Energy storage systems will help customers manage energy costs  
          and improve electrical grid reliability by reducing overall  
          system peak energy demands.  Increased demand for energy storage  
          technologies will drive new business opportunities and will help  
          keep and create manufacturing and industrial jobs in California.  
           Energy storage also offers valuable benefits to public and  
          environmental health by assisting California achieve its  
          greenhouse gas emissions goals.
          
          ARGUMENTS IN OPPOSITION:    Representatives of community choice  
          aggregators (CCAs), such as Marin Clean Energy, contend this  
          bill will require the CPUC to assign costs for the customer-side  
          energy storage programs and investments required by this bill to  
          all transmission and distribution customers, CCA customers  
          included, though they receive no benefit from the program or  
          investments.

          In addition, the California Energy Storage Alliance contends  
          this bill could excessively authorize utility-owned  
          customer-sited energy storage investments and that this bill  







          AB 2868 (Gatto)                                    Page 15 of ?
          
          goes too far in promoting utility-owned customer-sited energy  
          storage potentially to the detriment of businesses engaged in  
          the deployment and operation of third-party customer-sited  
          energy storage.
                                      -- END --