Montana case could set FERC precedent for paired storage treatment under PURPA
A Montana utility case pending before federal regulators could set a precedent for how energy storage facilities paired with renewable generation will be treated under the Public Utility Regulatory Policies Act (PURPA), a 1978 law intended to increase competition in power generation.
This summer, Northwestern Energy asked the Federal Energy Regulatory Commission (FERC) to revoke qualifying facility (QF) status under PURPA for four wind-plus-battery facilities a developer is trying to site in its Montana service area. The federal law compels utilities to purchase power from QFs.
Developer Caithness Beaver Creek has QF status for four planned 80 MW wind facilities paired with battery storage. Northwestern argues their status should be revoked because the addition of batteries violates generation sizing requirements under PURPA.
The case comes in the middle of FERC's ongoing review of its implementation of PURPA and would be the first ruling directly addressing paired storage facilities under the law. Utility trade group Edison Electric Institute asked FERC to put the case on hold until the commission completes that review, but one federal regulator said it is still in its early stages.
Northwestern v. Caithness
FERC today has little experience relating energy storage to PURPA. In the 1990 case Luz Development and Finance Corp., FERC found that a standalone storage project could receive QF status if it is charged with renewable energy, but the agency has not yet considered how to treat paired storage projects, like the Beaver Creek facilities.
Northwestern filed with FERC in late August, arguing the Beaver Creek batteries should be considered separate facilities from the wind turbines. If not, the utility said the combined facilities would violate PURPA's 80 MW capacity limit.
"Integrating battery storage facilities with a wind farm in these circumstances is simply a combination of power production facilities," the utility wrote. "There is no precedent for the proposition that a battery storage facility's capacity can be deemed to be zero simply because the battery may receive charging energy from another QF or because the battery storage facility is to be 'integrated' with an existing QF."
Caithness argues each of the four paired facilities can be considered a single QF because they will be controlled by software systems that ensure the batteries are charged only by wind from the adjacent turbines and limit each facility's total power discharge to less than 80 MW.
"[I]njections of energy stored in the associated battery storage system at a point in time when the wind turbines are at full output (i.e., 80 MWs) would not violate the size limitation under the commission's regulations," Caithness wrote to FERC this summer. "Because the total wind power output for the project can never exceed 80 MWs, the battery storage system simply provides a time-shifting of the wind production, and not additional generation, limiting the total production to 80 MW of renewable energy from the project."
Project details unclear
On top of legal uncertainty, the physical dimensions of the Beaver Creek battery projects remain unclear.
In a filing with the Montana Public Service Commission, Caithness said it would site batteries with a "capacity of up to 40 MW over a time period of up to four hours" but did not provide a capacity measurement in megawatt hours, a more precise indicator of battery duration.
Northwestern's filing, however, says the batteries will have "a capacity of 10 MW, with an ability to deliver 40 MWh total over 4 hours." In an email to Utility Dive, a spokesperson said that was only the utility's best guess.
"We are not sure exactly what Caithness is proposing," external relations manager Butch Larcombe wrote. "They have presented conflicting information to us. We are hoping FERC can help clear up this question."
Caithness did not comment on the planned size of its batteries after multiple requests. In comments filed with FERC on Sept. 25, the developer discusses the intricacies of battery duration at length, but never attributes a number to its planned facilities. It also notes the unprecedented nature of its request to FERC.
"[E]ven the simple concept of determining how a battery storage system would be rated for purposes of QF certification is not clear," Caithness wrote. "The inclusion of the battery storage system in a certification for QF status is not a concept that the Commission has directly addressed."
EEI calls for pause
In the face of uncertainty, EEI urged regulators to pump the brakes. The trade group for investor-owned utilities said it supports energy storage, but the case "raises questions of broader applicability" that should be addressed in FERC's pending PURPA review.
Those questions include how FERC should apply PURPA's size requirements for paired storage facilities.
"[I]t appears that Beaver Creek is trying to have it both ways by saying that the combined facility will not inject more than 80 MW onto the grid except when the wind facility is operating at full output at which point the extra energy being put on the grid should be ignored," EEI wrote. "PURPA specifically established an 80 MW threshold for QFs, and if energy in excess of 80 MW is placed on the system at any time, then the facility does not meet the requirements put in place by PURPA."
FERC Chair Kevin McIntyre said in May that the commission would "reenergize" its PURPA review, announced in his first open meeting in Dec. 2017, but the commission has not set deadlines for its conclusion. Late last month, Commissioner Neil Chatterjee told Utility Dive the proceeding is still in its early stages.
"The way the commission processes work is staff puts together an options memo that lays out what the available options are and we're just waiting on that memo," Chatterjee said. "On what form it will take or what timeline it will take, we don't have any clarity on that yet."
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