Dive Brief:

• The Colorado Senate on Monday voted 26-9 on third reading to approve HB18-1270, which directs the development of mechanisms to enable investor-owned utilities to acquire energy storage systems, while restricting their size to 15 MW. Because amendments were added on the floor, it will need to be approved again by the House.
• The bill would direct state regulators to "establish mechanisms" for investor-owned electric utilities to procure energy storage systems. Some criteria would need to be satisfied, however.
• Batteries have been on the minds of Colorado lawmakers recently: last month the legislature approved a bill declaring that power customers have a right to install, interconnect and use energy storage systems. Colorado Gov. John Hickenlooper signed the measure March 22. 

Dive Insight:

Springtime in Colorado, when a legislator's fancy turns to energy storage, to paraphrase Tennyson. Last month's pro-storage declaration could set the stage for solar and battery installations and comes just as Xcel Energy is testing new time-of-use rate, including one with a demand charge.

If Hickenlooper signs HB18-1270, it would allow investor-owned utilities to also get in on the action. Xcel has been considering storage resources paired with renewables; in December, the utility revealed a resource solicitation returned record-low prices for wind and battery combos. The utility received more than 400 proposals, and the median price bid for wind-plus-storage projects in Xcel's all-source solicitation was $21/MWh.

The legislation that senators finalized this week directs the Public Utilities Commission to develop rules and a process for IOUs to acquire storage systems, though the decision must be "based on an analysis of costs and benefits," and other factors including grid reliability and a reduction in the need for additional peak generation or transmission capacity.

Benefits of storage includes reducing system costs, diversifying the power mix, and boosting reliability, according to the legislation. The law also directs utilities to include information in their requests to specify interconnection points, "to enable independent evaluation."

The Colorado Rural Electric Association's bill tracker lists the group's position on HB18-1270 as "monitor," and notes that the PUC is "already considering storage projects as part of its ongoing electric resource plan proceedings and has opened a proceeding to consider related rule changes."

At least two cooperatives are developing storage pilot programs, a spokesperson for CREA said, while others are watching to see the results.

Last year, United Power Cooperative announced it would develop, along with SoCore Energy, a "community battery" that would allow members to share the system’s output to reduce demand charges on their monthly electric bills.

The developers say the 4 MW, 16 MWh battery storage system in Firestone, Colo., would be the largest in Colorado.