Energy Storage and the Energy Policy Modernization Act

We may be close to seeing the passage of the first major federal energy legislation since the Energy Policy Act of 2007. With a vote of 18-4, the Senate Energy and Natural Resources Committee on July 30, 2015 voted to advance to the Senate floor the Energy Policy Modernization Act. The proposed act was introduced by the leaders of the Senate Energy and Natural Resources Committee: Chairman Lisa Murkowski (R-AK) and ranking member Democrat Maria Cantwell (D-WA). The broad, bipartisan energy legislation is a result of many hearings over 114 proposed energy bills introduced by committee members, dozens of sessions during which stakeholders provided input on the legislation, and over 94 amendments filed during a three-day markup session. The approximately 357-page legislation has five sections: efficiency, infrastructure, supply, accountability, and conservation reauthorization.

The energy storage provisions included in Subtitle D of Title II of the bill are relatively modest. Senator Cantwell championed Title II in the hope of modernizing U.S. infrastructure and integrating clean energy technologies. The principal measure proposed to accomplish these goals is a $50 million grid storage program. Section 2301 directs the $50 million to be used to:

1. research materials and electrochemical systems;
2. research power conversion technologies;
3. develop industry standards to compare the storage capacity, cycle length and capabilities and reliability of different types of electricity storage;
4. research the widespread deployment of electricity storage;
5. develop devices based upon the results of research;
6. perform grid-scale testing and analysis of storage devices;
7. perform a cost-benefit analysis to inform capital expenditure planning for regulators and owners, as well as operators of the grid;
8. review electricity storage safety and reliability;
9. establish standards for storage device performance, control interface, grid interconnection and inter-operability; and
10. maintain a public database of energy storage projects, policies, codes, standards and regulations.

The other subsections within Title II contain other infrastructure provisions for study, demonstration and planning for grid modernization; advanced grid architecture; microgrids and distribution systems; and cyber-security upgrades. Of note, Section 2303 establishes a grant program for projects aimed to upgrade the distribution system and modernize the grid. Eligible projects must demonstrate secure integration and management of two or more energy resources, one of which may be energy storage.

It is worth mentioning that, in an effort to maintain bipartisan support, some storage proposals were not included in the comprehensive legislation. For example, one of the proposals not included was the “Energy Storage Promotion and Development Act,” sponsored by Sens. Martin Heinrich (D-NM) and Angus King (I-ME). This measure sought to create the first national energy storage standard and establish energy storage standards for electric utility companies. The exclusion of this proposal reflects the decision of Sens. Murkowski and Cantwell’s decision to keep the bill bipartisan in order to enhance its likelihood of passage.

It is anticipated that the proposed Energy Policy Modernization Act will be brought to the full Senate in fall 2015. However, passage may be jeopardized if controversial amendments are proposed and adopted on the Senate floor. Sens. Murkowski and Cantwell are committed to blocking any amendments that may prevent the bill from being passed, but whether they will be able to succeed in doing so is uncertain.

Assuming that the proposed legislation passes the Senate, it is likely to be married up with a smaller, even more modest House companion bill championed by Chairman Fred Upton (R-MI). The Energy and Power Subcommittee of the House Energy and Commerce Committee unanimously approved the House’s bipartisan four-part energy modernization bill on July 22 with no amendments considered. It will likely be marked up by the full Energy and Commerce Committee in September, and perhaps considered on the House floor this fall.

The House companion bill does not currently include an energy storage section, but it does include several energy efficiency and grid modernization provisions similar to the Senate bill. Energy storage provisions could be added during the House full-committee and floor debates or during the ultimate conference with the Senate to iron out a final bill for the President’s signature.

We will keep you updated on the progress of these bipartisan energy bills, and their likely effect on energy storage, as they advance in the Senate and House. A copy of Sens. Murkowski and Cantwell’s legislation can be found here. A copy of the House Energy and Commerce Committee bill can be found here.