The Missouri Public Service Commission has directed Kansas City Power & Light Co. to offer stand-by electric services to self-generation customers at market-based prices.
to manage the grid.11
The emergence of ISOs will likely increase interest in CAES and HPS plants, which could be dispatched to provide ancillary services and balance supply and demand.
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Industry restructuring presents a two-edged sword to developers of new power plants capable of storing electricity. On the one hand, utilities and other potential customers feel logical concern about making long-term capital investments. On the other, electric storage offers strategic benefits under a regime of open access. The challenge lies in assessing these risks and benefits. Some of these storage technologies should make
the cut. t
Philip O'Connor is principal, and Erik Jacobson manager, of the Utilities/ Energy Division at Coopers & Lybrand Consulting. Mr. O'Connor served previously as chair of the Illinois Commerce Commission. Mr. Jacobson has worked as deputy director of the Division of Ratepayer Advocates at the California Public Utilities Commission. The authors prepared this article with funding from TPC Corp. (Tejas Power), Houston, TX.
1. EAI reports that storage use per field increased significantly from 1989 through 1993 compared to 1982 through 1986. The later period represents the industry after participants assimilated the effects of Order 436. Average monthly injections per field increased from 520 to 642 MMcf. Average monthly withdrawals per field increased from 531 to 644 MMcf, an increase of 23 and 21 percent, respectively, for the two periods. Energy information Administration, The Value of Underground Storage in Today's Natural Gas Industry, DOE/EAI-0591, March 1995, p. 26-27.
2. "Deliverability," the measure of the amount of gas that can be withdrawn from a storage facility over a period of time, has increased about 10 percent, from 61,718 MMcf/day in 1990 to 67,729 MMcf/day in 1993. "Working-gas capacity," the maximum amount of gas that can be stored in a reservoir, increased 4 percent, from 3,550 Bcf in 1990 to 3,695 Bcf in 1993, Ibid, p. 32.
3. Of the 20,746 MMcf added to daily deliver-ability from proposed storage projects for the period 1994-99, 68 percent (14,115 MMcf/day) comes from proposed salt-cavern storage projects. In 1993, total deliverability reached 67,729 MMcf/day (em 7,041, or 10 percent, from salt-cavern storage facilities. Ibid, p. 59.
4. Most salt-cavern facilities can cycle their entire working-gas capacity 5 to 10 times per year, as compared to once a year for storage facilities using depleted reservoirs. Ibid, p. 33.
5. Although interstate pipeline companies have historically dominated the underground storage business, over 53 percent of the 20,746 MMcf/day in proposed additions to storage withdrawal capacity are now made by independent developers, Ibid, p. 60-63.
6. CAES, BESS, SMES, and FES differ in the amount of energy they are likely to store, the rate at which they can deliver the energy, and the limits of their delivery durations. However, they all use "mechanical" or chemical conversions to facilitate storage, and they all provide for regeneration of electricity. SMES is the nearest to a purely electric storage system.
7. In its pro forma tariffs proposed on March 29, 1995, as part of its "Mega-NOPR" proceeding, the FERC defined "ancillary services" as "those services