This past week U.S. Reps. Chris Gibson (R-NY) and Mike Thompson (D-CA) introduced legislation that would create an investment tax credit (ITC) for energy storage technologies of all types. Their bill, the Storage Technology for Renewable and Green Energy Act (STORAGE) Act (H.R. 4096), is the House companion legislation to S. 1845, introduced by Sens. Ron Wyden (D-OR), Jeff Bingaman (D-NM), and Susan Collins (R-ME).
The STORAGE Act is helpful in highlighting the need for government support of energy storage technology. That support is needed if energy storage is to move from being a theoretical resource to being a useful and cost-effective tool on the grid. Congress should take note of the production tax credit’s (PTC) great success in transforming wind energy over the last two decades from an esoteric and uneconomic source of electricity into a significant contributor of power to the grid and the lowest cost option for new electricity generation in many areas. That same success can undoubtedly be duplicated in the area of energy storage.
Unfortunately, because of the political impasse in Washington, the STORAGE Act is unlikely to be called for a vote, let alone to be enacted, any time before the general elections next November. That impasse, however, should be a call to action, not resignation.
Many of the barriers to deploying distributed energy storage arise, not from a lack of federal policy, but from inconsistent and antiquated state regulations that restrict how storage and other assets located on the distribution portion of the grid can be owned and used. While local regulation of purely local electricity service makes sense, as technology increasingly permits assets located on local distribution systems to impact the larger, national electricity grid, the inconsistencies and antiquated nature of many local regulatory schemes becomes an increasingly critical issue. The storage industry should spend this period of impasse in Washington addressing that issue.
One possible model for modernizing and making more uniform state regulations which inhibit the deployment of energy storage and smart grid technology is the National Conference of Commissioners on Uniform State Laws (NCCUSL). In the late 19th Century, it became apparent that wide variations in laws between separate states created confusion and inhibited commerce. The solution was the creation of the National Conference of Commissioners on Uniform State Laws (NCCUSL).
The NCCUSL consists of commissioners appointed by each state. It drafts model legislation, or uniform acts, which individual states can choose to adopt, and often do. The best known of these model acts is the Uniform Commercial Code, which has been adopted by all 50 states with only minor variations.
A national conference of utility regulatory law experts tasked with making state utility regulations more uniform in order to accelerate the deployment of energy storage and smart grid technologies on a national basis would be a worthwhile effort. The FERC and the U.S. Department of Energy would do well to seed such a project with funds and counsel.
As Rahm Emanuel once remarked, you never want a serious crisis to go to waste. We should use the crisis of the impasse in Washington to advance the cause of energy storage technology where we can. That place, for the moment, is in the states.