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The California Public Utilities Commission (CPUC) has unanimously approved a long-term procurement decision ordering Southern California Edison (SCE) to procure between 1,400 MW and 1,800 MW of energy resource capacity in the Los Angeles basin to meet long-term local capacity requirements by 2021.

Of this amount, at least 50 MW is required by the CPUC to be procured by SCE from energy storage resources, as well as up to an additional total of 600 MW of capacity required to be procured from preferred resources - including energy storage resources.

According to the California Energy Storage Alliance (CESA), under the CPUC's final decision, energy storage resources must be considered "along with preferred resources." These preferred resources include energy efficiency, demand response and distributed generation, consistent with the clean energy resource procurement priorities embodied in California's Energy Action Plan. 

"This landmark decision represents a major breakthrough for energy storage market development in California and nationwide," says Janice Lin, executive director of the CESA and managing partner of Strategen Consulting LLC.

"Required energy storage procurement under this decision provides a much needed market signal that energy storage will be considered as a key asset class to help California address its long-term local reliability and environmental quality needs for clean energy resources," Lin adds. 

CPUC Commissioner Michel Peter Florio, the assigned commissioner responsible for the CPUC's long-term procurement planning rulemaking, described the decision as "monumental" during the discussion. "We need to move beyond paralysis by analysis with respect to energy storage," Florio said.

"Through today's decision, we are taking the forward-looking step of allowing preferred resources, such as energy efficiency and renewables, to be considered in meeting electricity reliability needs right alongside of fossil generation instead of as an afterthought," notes CPUC Commissioner Mark J. Ferron.

CESA adds that this ruling will have an essentially immediate impact because SCE is ordered by the CPUC to file an application to the CPUC seeking approval of negotiated contracts with energy storage resource providers by the end of 2013 or early 2014.

The full proposal is available here.

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