Energy Storage Developers See Promise in Second Phase of Innovative New Hampshire Pilot

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Energy storage developers are eager to participate in the second phase of an innovative energy storage pilot in New Hampshire, after the proposal’s first phase failed to deliver an ownership provision they sought.

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After a year of negotiations, a New Hampshire utility and several stakeholders have reached an agreement that would create the energy storage pilot program, which includes a time-of-use rate structure to encourage reduction in peak energy usage. ‘

The storage developers were not among those that signed the agreement because the proposal does not allow them to immediately own batteries. They will instead await a second phase of the pilot in which third parties can compete with the host utility.

Under review by New Hampshire PUC

Liberty Utilities in November reached an agreement with the staff at the Public Utilities Commission (PUC), the state’s Consumer Advocate, New Hampshire Sustainable Energy Association, Conservation Law Foundation, Acadia Center and the City of Lebanon for a home battery storage pilot program (DE-17-189). The settlement is awaiting final approval by the commission. A date has not yet been set.

In phase one of the energy storage pilot program, the utility will have a 12-month period to show it can accurately manage system peaks and home batteries both operationally and with no added costs for the homeowners. Customer sign-ups are expected to be completed in the first quarter of this year.

Phase two, which has third-party developers and distributed energy advocates especially excited, contemplates a program in which the utility will work in parallel with aggregators of third-party-owned storage batteries.

“Working with a small utility in a small state, we thought we could work with these stakeholders to get this program right,” said Chris Rauscher, director for policy and storage market strategy at solar and storage developer Sunrun.

Sunrun was joined by ReVision Energy in endorsing commission approval, despite not signing the settlement.

The companies did not oppose the proposed settlement but endorsed many of its key components at a commission hearing in late November.

First-of-its-kind energy storage pilot

The pilot program is the first of its kind in the US to combine storage with time-of-use rates in three classes: mid-peak, critical-peak and off-peak. The installed batteries will be charged overnight during off-peak times, with that energy available during critical-peak times. Off-peak rates are expected to be more than 10 cents lower per kWh during the summer months compared to regular residential rates.

Phase one will be limited to 200 Tesla Powerwall batteries. Customers pay either $2,433 per system upfront to participate in the 10-year program, or spend $25 per battery, per month, with each customer required to use two batteries. The installation, service and maintenance will be covered by the utility.

Batteries will be used as the customers see fit, with the exception being when Liberty gives 24-hour notice of a peak power demand. The utility then charges the batteries overnight and discharges its energy the next day to reduce the amount of power it will need from grid operator ISO-New England.

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To begin phase two, Liberty has to be accurate 75 percent of the time that it dispatched battery power in alignment with peak hour demands.

A cost-benefit analysis must show that cost savings from the program match projections in order for phase two to be approved. Liberty is putting together its plan for customer engagement, outreach and education and the final details are not yet available. It is also studying what specific metrics will be used to determine when it will take control of the batteries.

“Some of the key metrics for success include the transmission cost savings for customers, and increased customer engagement in energy usage,” said Heather Tebbetts, senior rates and regulatory affairs analyst for Liberty. “We expect that initial performance metrics from the pilot will be available after year one of the pilot, and the metrics are expected to be reviewed annually.”

After phase one is deemed to be successful, the pilot will implement phase two, where Liberty will install up to 300 additional batteries.

Competitive solicitations in phase two

Phase two also provides a “bring-your-own-device” program with batteries provided by third parties. Competitive solicitations will seek battery aggregators to provide an additional 2.5 MW of battery capacity, which is equivalent to approximately 500 batteries.

The proposed settlement creates a working group to propose stakeholder meetings and analysis that will run concurrent to the implementation of phase one. One source of disagreement was who owns the batteries and at what phase of the rollout. Companies like Sunrun wanted earlier third-party participation.

“The ownership model is something Liberty got backwards. We think the program should’ve started with third-party ownership first because you’re not outlaying any ratepayer capital,” Rauscher said.

“Say if Liberty was not successful in phase one, if the issue was peak prediction but not cost-effective rates, then all that effort would go to waste,” he said.

Liberty does not expect that to occur.

“Liberty Utilities has in-depth knowledge of system operations in general, and superior knowledge of the electric system in which the pilot will take place due to the fact that we operate it, but as part of the settlement agreement we have welcomed third-party ownership of storage to provide customers with choices,” Tebbetts said.

A year ago, Liberty proposed behind-the-meter storage to reduce peak demand and to offer customers an opportunity to get directly involvement in energy management, Tebbetts said.

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