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Calif. Senate has until May 31 to pass pumped-storage bill


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Calif. Senate has until May 31 to pass pumped-storage bill

Developers of the Eagle Mountain Pumped Storage Hydroelectric Project next to Joshua Tree National Park are hoping the California Senate meets a May 31 deadline to pass a measure that would require the California ISO to sign long-term contracts for bulk energy storage.

NextEra Energy Resources LLC, a development partner with Eagle Crest Energy Co., has lobbied in favor of Senate Bill 772, which would provide an opportunity for their 1,300-MW Eagle Mountain project.

The bill, introduced by Sen. Steven Bradford, D-Gardena, would require CAISO by mid-2022 to complete a competitive solicitation for procurement of one or more long-duration energy storage projects that in aggregate have at least 2,000 MW, but not more than 2,400 MW, of capacity. The bill would require another solicitation for up to 2,000 MW after 2030, if necessary.

Supporters of the bill, such as the California Wind Energy Association, argue that pumped storage is needed to balance the state's abundance of variable solar and wind energy resources.

SNL Image

Eagle Mountain Pumped-Storage Hydroelectric Project
Source: Eagle Crest Energy Co.

While the bill was amended to strike most of the specific references to pumped storage, the measure would require CAISO to contract with facilities that each has at least 400 MW of capacity as well as the capability to continuously discharge energy for at least eight hours and complete a discharge and recharge cycle on a daily basis. The facilities must have a useful asset life of at least 40 years and use technology with a proven performance record.

The Senate Energy, Utilities and Communications Committee passed the bill in a 9-1 vote April 24, and the measure has been sent to the floor for approval. If the bill passes the Senate, it still needs to be sent to the Assembly. In 2018, the Assembly voted 61-10 to pass a similar bill that would have required CAISO to procure up to 2,000 MW of bulk energy storage by the end of 2019. However, while that measure passed Senate committees, Sen. Ben Hueso, D-Chula Vista, requested that it be placed in the inactive file during the closing days of that session and the bill subsequently died.

Hueso chairs the Senate energy committee and voted with his panel's majority to pass S.B. 772, which by establishing a mid-2022 deadline for procuring bulk storage rather than the 2019 target date included in the earlier bill would give Eagle Mountain's developers more time to get their project ready for CAISO's consideration.

The Federal Energy Regulatory Commission issued a license for the project in 2014. However, CAISO has concerns about being required to procure such a large amount of storage because FERC's approval would be needed to include a cost-allocation mechanism in the grid operator's transmission tariff to pay for the storage.

While the Eagle Mountain project would be located on top of an abandoned iron mine, environmentalists such as the Center for Biological Diversity and the California Wilderness Coalition oppose the project, and the bill that would enable it, due to its proximity to Joshua Tree, where they say it would strain scarce water resources.

Ratepayer advocacy groups, including the California Large Energy Consumers Association and The Utility Reform Network as well as the Independent Energy Producers Association, argue that the bill would allocate huge costs of potentially unneeded pumped-storage resources through transmission rates rather than through more targeted and planned efforts of utility regulators. Pumped-storage facilities take years to develop and can cost billions of dollars, while advances in other technologies, such as battery storage and compressed air energy systems, might be better solutions, bill opponents said.