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Texas bill would allow ERCOT transmission companies to own battery storage


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Texas bill would allow ERCOT transmission companies to own battery storage

A bill introduced in the Texas Legislature seeks to settle legal confusion surrounding whether transmission and distribution companies can own battery storage devices.

Republican state Sen. Kelly Hancock on March 7 introduced legislation, Senate Bill 1941, allowing transmission and distribution utilities to enter into agreements with generators to provide electricity from energy storage facilities, with prior approval from the Public Utility Commission of Texas.

Under the bill, such agreements are "limited to situations where construction of traditional distribution facilities is not cost-effective when compared to the use of an energy storage facility."

Electric battery storage can help firm up grids and prevent outages during periods of high consumption. But the law in Texas, which draws clear distinctions between transmission and distribution companies and power generators, has so far not kept apace with technological development.

The PUCT last year opened a rulemaking process asking if transmission and distribution utilities operating within the Electric Reliability Council of Texas market can own energy storage devices. The rulemaking is intended to "resolve infrastructure deficiencies" and consider the impacts of battery storage on wholesale and retail markets. (Control No. 48023)

The PUCT opened the docket after American Electric Power Co. Inc. subsidiary AEP Texas Inc. applied to own battery storage systems. Electric vehicle maker Tesla Inc., which is developing utility-scale battery storage technology, supported AEP's proposal, saying in comments to the PUCT that battery storage would support the reliability of the grid.

AEP has a 4-MW sodium sulfur batter in Presidio, Texas, that provides voltage regulation and addresses temporary outages, according to a PUCT summary of the docket. The company in January 2018 was denied permission to install larger batteries. Oncor Electric Delivery Co. LLC, owned by Sempra Energy, also operates five 25-kW batteries installed on a load-serving transformer intended for the company to study battery performance, according to the PUCT's summary. Each battery serves between three and five residences of varying size and consumption, PUCT staff says.

Transmission and distribution companies argued in comments to the PUCT that the law permits their ownership of battery storage. But opponents, such as retail electric providers and consumers, argued an owner or operator of battery storage devices must register as a power generator.

The commission paused the rulemaking, and in January asked the state legislature for clarification in the law. The bill would take effect in September if passed.