COM/MP1/gd2 Date of Issuance 8/6/2012

Decision 12-08-016 August 2, 2012

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.

Rulemaking 10-12-007 (Filed December 16, 2010)

DECISION ADOPTING PROPOSED FRAMEWORK FOR
ANALYZING ENERGY STORAGE NEEDS

TABLE OF CONTENTS

Title Page

DECISION ADOPTING PROPOSED FRAMEWORK FOR ANALYZING ENERGY STORAGE NEEDS 11

1. Summary 22

2. Background 22

3. Scope 55

4. Parties' Comments 66

4.1. Proceeding Focus 66

4.2. Barriers to Energy Storage Deployment 1010

4.2.1. Lack of Definitive Operational Needs 1111

4.2.2. Lack of Cohesive Regulatory Framework 1212

4.2.3. Evolving Markets and Market Production Definitions 1313

4.2.4. Resource Adequacy Accounting 1313

4.2.5. Lack of Cost-Effectiveness Evaluation Method 1414

4.2.6. Lack of Cost Recovery Policy 1616

4.2.7. Lack of Cost Transparency and Price Signals 1717

4.2.7.1. Wholesale Price Signals 1717

4.2.7.2. Retail Price Signals 1818

4.2.8. Lack of Commercial Operating Experience 1919

4.2.9. Lack of Well-Defined Interconnection Processes 2020

4.3. Procurement Targets 2121

5. Staff Proposal 2222

6. Discussion 2626

7. Comments on Proposed Decision 3030

8. Assignment of Proceeding 3131

Findings of Fact 3131

Conclusions of Law 3232

ORDER 3232

ATTACHMENT A - Energy Storage Framework Staff Proposal

DECISION ADOPTING PROPOSED FRAMEWORK FOR
ANALYZING ENERGY STORAGE NEEDS