By Michael J. Gergen, Eli. W. Hopson, and Andrew H. Meyer

Across North America, investor-owned utilities (IOUs), publicly-owned utilities (POUs), and other load-serving entities are issuing unprecedented requests for proposals or offers (RFPs or RFOs) for advanced energy storage projects.  Recent significant developments regarding the energy storage procurement policy established by the California Public Utilities Commission (CPUC) for California’s three largest IOUs, currently the largest procurement initiative in North America, have been summarized by Latham attorneys here and elsewhere.  In addition to this CPUC procurement initiative, there are now procurement initiatives underway elsewhere in California, as well as in Hawaii, New York, and the Province of Ontario, Canada.  Together, these initiatives indicate that energy storage technologies may be ready to move from the demonstration stage to commercial deployment. 

This blog post briefly summarizes these procurement initiatives, many of which remain open for proposals or offers for commercial deployment of energy storage technologies. In addition to these targeted solicitations for commercial deployment, energy storage is increasingly being considered alongside traditional resources in resource adequacy processes and corresponding RFPs. For example, the Public Service Company of Colorado included energy storage as a qualifying resource under a 2013 RFP for Dispatchable Resources. Suffice it to say that the energy storage industry enjoys a number of targeted opportunities for commercial deployment across North America.


In October 2013, the CPUC issued a decision setting a procurement target of 1,325 MW of energy storage by the end of 2020 for California’s three largest IOUs – Pacific Gas & Electric Company, Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E). Energy storage policy has already influenced a number of recent CPUC proceedings, including a recent decision regarding SCE and SDG&E and their Long-Term Procurement Plan (LTPP), a process that determines the resource needs of these IOUs, as related to the permanent retirement of the San Onofre Nuclear Generation Stations. In the coming months, California’s three largest IOUs are expected to work toward their energy storage procurement targets by issuing RFPs for potentially hundreds of MWs of energy storage resources authorized pursuant to such LTPP decisions. Other California energy storage RFOs to date include the following.


Even before issuing the statewide procurement mandate, the CPUC in its Track 1 LTPP proceeding for SCE issued a decision authorizing SCE to procure 50 MW of energy storage. SCE issued an RFO in September 2013 that elicited over 500 responses before closing in December 2013. The RFO focuses on substations or circuits in specific transmission-constrained areas in the Los Angeles Basin. SCE is scheduled to finalize agreements solicited through the RFO by late June 2014.

Southern California Public Power Authority (SCPPA)

The SCPPA is a joint powers authority comprised of twelve POUs (eleven municipal utilities and one irrigation district) in Southern California. Among other things, the SCPPA procures generation, transmission, and related resources in the region on behalf of its members. Under Assembly Bill (AB) 2514, the law that authorized the CPUC to set a storage mandate for California’s IOUs, POUs are required to self-determine an energy storage procurement target by October 1, 2014.

On February 1, 2014, the SCPPA issued an RFP for renewable energy and energy storage projects that will remain open until the end of the year, with the first review date for energy storage projects on April 1, 2014. Because SCPPA’s members are in the process of determining their appropriate procurement targets ahead of the October deadline, the RFP encourages applicants to submit proposals by the April 1 review.

Imperial Irrigation District (IID)

IID, another POU, provides power and water services to about 150,000 residential, commercial, and industrial customers in California’s Imperial Valley. IID recently took a step toward deploying energy storage with the issuance of Qualifications Request (QR) 123, the start of a solicitation for what will eventually be 20 to 40 MW of energy storage. The utility wants “respondents to design, engineer, procure and construct a utility-scale energy storage project,” and the solicitation specifically calls for a “battery” storage project. The QR closed on February 18, 2014, after receiving soliciting over 125 responses.

Hawaii, Kauai Island

Kauai Island Utility Cooperative (KIUC)

Solar electricity accounted for over 5 percent of Kauai’s annual electricity production in 2013, and that percentage is set to rise to 16 percent by 1Q 2015. Even now, solar accounts for one-third of Kauai’s generation mix during peak sun hours. On March 3, 2014, the KIUC issued an RFP calling for energy storage projects to address possible operational challenges in connection with high penetration of solar electric systems on this “true islanded system,” including rapid, significant, and unpredictable ramp events, and over-generation. The KIUC already operates three 1.5 MW / 1.0 MWh battery systems to handle extreme ramp events. With the prospect of over-generation during sunny, low-energy demand periods, the RFP explicitly states that the KIUC is not interested in purchasing new renewable generation resources unless such resources are coupled with energy storage that is capable of shifting output away from current and future over-generation periods. Responses to the KIUC’s RFP are due by April 18, 2014.

New York

Consolidated Edison (ConEd)/ New York State Energy Research and Development Authority (NYSERDA) / New York State Department of Public Service (NYPSC)

New York City IOU ConEd, in conjunction with NYSERDA and the NYPSC, has issued a proposal to furnish 100 MW of load reduction measures that include energy storage, demand response and energy efficiency to address the reliability concerns that may arise from the potential retirement of the Indian Point Energy Center, a nuclear facility that generates about twenty percent of New York City’s electricity.

Although not yet finalized, ConEd and NYSERDA have published details relating to the incentives the program would offer to winning proposals. The new incentives for energy systems that provide summer on-peak demand reduction are $2,600 per kW for thermal storage and $2,100 per kW for battery storage systems, with bonus incentives for projects larger than 500 kilowatts. Incentives will be capped at 50 percent of the project cost. This incentive program is similar to California’s Self-Generation Incentive Program, which provides one-time, upfront rebates for distributed energy systems installed on the customer’s side of the utility meter.

Long Island Power Authority (LIPA)

In October 2013, LIPA issued an RFP for Generation, Storage, and Demand Response Resources that specifically calls for up to 150 MW of energy storage “that would assist black start operations by serving as a load and also complement planned increases in renewable resources.” The RFP also includes energy storage as a resource that may qualify to replace old and inefficient peaking generation and defer transmission upgrades throughout the island. The RFP includes specific criteria for energy storage depending on its function and geographic location. Proposals are due March 31, 2014.

Province of Ontario, Canada

Independent Electricity System Operator (IESO)

Ontario’s grid operator IESO, in coordination with the Ontario Power Authority, have released a proposed energy storage procurement framework, which specifies that 50 MW of energy storage will be included in procurement processes by the end of 2014. The initial phase of procurements will focus on reliability services. An RFP is expected in the coming months.