Using Storage-Capacity Rights to Overcome the Cost-Recovery Hurdle for Energy Storage

摘要

Energy storage is a unique technology in that it can provide multiple services. This unique feature also raises costrecoveryissues for energy storage, due to the combination of competitive markets and ratebased cost-recoveryused in many jurisdictions today. This hybrid regulatory paradigm relies on classifying assets as providingcompetitively prices or unpriced services and handling cost recovery based on that classification. Some recentregulatory precedents suggest that energy storage developers must choose between classifying their assets asproviding competitively priced or unpriced services. In the former case, energy-storage costs must be recoveredthrough the market. If an asset is classified as providing only unpriced services, costs can be recovered through theratebase.