TheArizona Corporation Commission ordered ArizonaPublic Service Co. to include a $4 million residential batterystorage program in its demand side management plans.

CommissionerAndy Tobin sought to make customer-sited battery storage part of the utility'senergy efficiency and demand side management, or DSM, plans because thetechnology would allow customers to limit peak demand for utility-suppliedenergy.

Tobinhad pushed to amendAPS's DSM plan to include storage at a commission meeting in June, but ChairmanDoug Little postponedconsideration of APS's plan so the utility could prepare to address Tobin'sproposals. The move provoked a heated exchange between the twocommissioners, but in ensuing weeks the commission worked toward an agreement.Tobin backed off from his earlier proposal for APS to increase spendingannually in 5% increments to address peak demand with storage and other peakshaving programs.

APSannounced the commission's decision in a July 14 , stating, "APS hasbeen at the forefront of storage research for many years and is currentlypiloting energy storage within both the Solar Innovation Study and at a broader'grid' level.

"Customersare empowered more than ever before to engage in their energy usage and savemoney. In addition to taking advantage of demand-based rates and making simplebehavioral changes, customers can now take advantage of these newly approvedmeasures, as well as look forward to emerging technologies such as energystorage," the Pinnacle WestCapital Corp. subsidiary concluded.

Supportingin part Tobin's earlier proposals, Commissioner Bob Stump proposed an amendmentto an order approving APS's 2016 plan to include the storage component."Energy storage is the Holy Grail for energy savings," Stump saidduring the commission's July 12 meeting. "We made significant steps hereto advance the technology that will impact the future of the grid and providesignificant benefits to the customers who will be able to better manage theirusage."

Tobinexpressed support for Stump's amendment because it would commit APS to theenergy storage program without further delay as part of the 2016 program budget.Little also supported the amendment, saying, "I am a firm believer thatenergy storage unlocks the potential for the future of grid-scale solar androoftop solar."

Thecommissioners amended a proposed orderfor APS's 2016 plan for about $69 million in programs for energy efficiency,DSM and conservation.

Thecommission ordered APS to propose within 120 days residential energy storagetechnology to help residential customers reduce electricity demand duringperiods of peak system demand. Since the 2016 plan was approved more thanhalfway through the year, the commission revised the order to ensure thestorage program continues as part of APS's 2017 plan.

APSattorney Melissa Krueger said the company would support Stump's amendment forthe $4 million program beginning this year. "My understandingis the intent is for one $4 million spend that begins in 2016 and that maycontinue to 2017, but it's one program and it is asking us to update our planto reflect that we are continuing to work on that program into 2017," shesaid, referring to the 2017 plan the utility filed in June before the 2016 planwas approved.

Tobinagreed that Krueger's statement of the commission's intent was exact.

APSTechnology Innovation Director Scott Bordenkircher told the commission that APSalready has a residential-solar-paired-with-storage pilot underway. But thecompany has run into issues getting safety rating approvals, slowingimplementation of the project. The utility wants to use residential solar forrecharging storage battery off-peak and use the battery to meet householdon-peak needs, he said.

Eachyear, APS and other utilities must file DSM plans and budgets for energyefficiency, load management and demand response programs. APS's programsinclude smart thermostats, devices to improve air conditioner performance, aprogram to inform customers of their energy use, incentives for weatherizinghomes and buildings, and rate plans such as time-of-use and critical peakpricing.