ALJ/JJJ/jt2 Date of Issuance 12/21/2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Pursuant to Assembly Bill 2514 to Consider the Adoption of Procurement Targets for Viable and Cost-Effective Energy Storage Systems.

FILED PUBLIC UTILITIES COMMISSION DECEMBER 16, 2010 SAN FRANCISCO, CALIFORNIA RULEMAKING 10-12-007

ORDER INSTITUTING RULEMAKING

1. Summary

We open this rulemaking in response to the enactment of legislation (Assembly Bill (AB) 2514 - Skinner, Stats. 2010 - ch. 469). This legislation directs this Commission to open a proceeding by March 1, 2012 to determine appropriate targets, if any, for each load-serving entity (LSE) as defined by Pub. Util. Code Section 380 (j) to procure viable and cost-effective energy storage systems and, by October 1, 2013, to adopt an energy storage system procurement target, if determined to be appropriate, to be achieved by each LSE by December 31, 2015, and a second target to be achieved by each LSE by December 31, 2020. We also open this proceeding on our own motion to initiate policy for California utilities to consider the procurement of viable and cost-effective energy storage systems.

Although the Legislature has given the Commission until March 1, 2012 to open this proceeding, we see the enactment of AB 2514 as an important opportunity for this Commission to continue its rational implementation of advanced sustainable energy technologies and the integration of intermittent resources in our electricity grid.