A bill that mandates utility-scale energy storage has passed the California Legislature and, at press time, is awaiting Governor Arnold Schwarzenegger's signature.

The Senate analysis of the bill, AB 2514, clarifies that the legislative intent was to increase the amount of energy storage located within the California grid to (i) encourage load peak leveling, (ii) assist with the “smooth and dispatchable” operation of intermittent renewable generators, and (iii) provide better frequency regulation.

AB 2514 defines an “energy storage system” as “commercially available technology that is capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy.”

AB 2514 requires load-serving entities, including electrical corporations, community-choice aggregators, electric-service providers, and local publicly owned electric utilities to include energy storage systems in their distribution networks. The bill requires the California Public Utilities Commission (CPUC) to implement annual procurement targets for these entities. The CPUC will establish performance benchmarks for the acquisition of “viable and cost-effective energy storage systems” that load-serving entities must meet by 2015 and 2020 and that local publicly owned electric utilities must meet by 2016 and 2021.

Earlier drafts of the legislation mandated civil penalties for failure to meet the benchmarks, though AB 2514 as passed did not include these penalties.

CPUC proceedings to set the initial performance benchmarks must be initiated by March 1, 2012.