Utilization of Electric Storage Resources for Multiple Services When Receiving Cost-Based Rate Recovery

The Commission issues this policy statement to clarify its precedent and provide guidance on the ability of electric storage resources to provide services at and seek to recover their costs through both cost-based and market-based rates concurrently. We are mindful that, by providing electric storage resources the opportunity to receive cost-based rate recovery concurrently with other revenue from market-based services (e.g., through organized wholesale electric markets), there can be implementation details that may need to be addressed, including protections against the potential for double- recovery of costs from cost-based ratepayers, adverse market impacts, and regional transmission organization (RTO)/independent system operator (ISO) independence from market participants. The Commission provides guidance in this policy statement as to how electric storage resources seeking to receive cost-based rate recovery for certain services (such as transmission or grid support services or to address other needs identified by an RTO/ISO) while also receiving market-based revenues for providing separate market-based rate services could address these concerns and also clarifies some past precedent on these issues.