FERC approved PG&E’s request to recover more than $600,000 in costs for an abandoned battery plant in California, saying the company sufficiently demonstrated it meets the requirements for cost recovery as established under previous commission orders (ER25-2238).
In an Oct. 10 order, FERC allowed PG&E to recover $602,472, or 50% of about $1.2 million, for planning and scoping the now abandoned 7-MW Dinuba Battery Storage System in Fresno, Calif.
CAISO approved the project after identifying several reliability concerns with transmission systems in Tulare and Fresno counties between 2010 and 2013. The ISO proposed resizing the battery facility from 7 MW to 12 after identifying more issues in 2019 because of the retirement of a local generator, according to FERC. It would have been CAISO’s first storage project fully dedicated as a transmission asset. (See Storage Week: Hairless Cats, Rising Stats and Skeptics.)
However, in its 2023/24 transmission plan, CAISO said it found an alternative solution that would address the reliability concerns “more comprehensively and effectively” than PG&E’s battery storage system, leading to the cancellation of the project, according to the order.
PG&E filed a request for cost recovery May 15 for the scoping, engineering, feeder, switchgear, control building and relay design, and material procurement associated with the abandoned project. It also requested authorization to amortize and recover the abandoned plant costs over a one-year period.
The company contended it was entitled to cost recovery because CAISO considered the battery storage system as a transmission asset as required for cost recovery under Opinion 295, which instituted the abandoned plant policy in 1988. The abandoned plant costs should be evenly split between customers and shareholders, PG&E argued.
FERC agreed, saying CAISO selected the project as a transmission asset to address thermal overloads. The commission also noted that PG&E would have operated the project under the direction of CAISO, similar to other wholesale transmission facilities, it said.
“We find that PG&E has demonstrated that it qualifies to recover 50% of the prudently incurred project costs based on the facts and circumstances presented in this proceeding, consistent with Opinion No. 295,” the order stated.
