Incentives for customer-owned batteries among new programs in Austin Energy’s pipeline

After ending last year with a successful vote for its Climate Protection Plan at City Council, Austin Energy is taking no breaks to celebrate, moving right ahead with plans to make good on its promises for a more sustainable and resilient power grid.

Earlier this month, department heads met with the city’s Electric Utility Commission to discuss a program that would compensate customers for connecting their battery storage systems to the energy grid, a move the utility hopes could be a win-win for both its affordability and climate goals. The project is among several in the works laying the groundwork for a robust Distributed Energy Resource Management System, which would see a proliferation of local generation sources across the city working in concert to meet utility demands.

The concept behind this system is currently at play in demand response initiatives like the Power Partner thermostat and electric vehicle charging programs, in which customers agree to adjust their home thermostats or delay charging their vehicles upon receiving the signal from Austin Energy. In exchange for their assistance in alleviating grid stress, participants receive a $50 upfront bill credit along with an annual $25 rebate.

Now, the utility hopes to integrate batteries, hatching plans to incentivize bringing residential and commercial scale storage systems online in a centralized virtual power plant. Currently, customers receive a 30 percent federal tax credit for investing in such systems, which are typically powered by solar panels. 

“We already have 15 MW of batteries in our service territory, but we are learning how to leverage them for the most benefit at a reasonable cost,” said Richard Genece, Austin Energy’s vice president of customer energy solutions. “Weaving multiple distributed energy management systems into one cohesive system which is easy to operate will take time, focus and alignment of multiple groups across the utility.”

The effort could be transformative for Austin Energy, which has in recent years faced an onslaught of financial pressure thanks to worsening ERCOT congestion, rising infrastructure costs and increasingly extreme temperatures. Staffers say expanding their arsenal of distributed resources could provide a new kind of flexibility, alleviating demand and saving money as they face new challenges posed by the shifting landscape.

“The idea is that you’re charging the battery when the market price is low, and discharging it when the market price is high, so it’s easy to see how you gain efficiency there,” said Tim Harvey, customer renewable solutions manager. “But there are also other ways to leverage dollars. There are four days in the summer where ERCOT sets (peak demand tariff) 4CP and it’s a 15-minute window. … To the extent that we can avoid consumption during those 15-minute periods on those four days, we can reduce our costs for the entire next year for transmission. And not only that, but when we reduce our consumption during that time, we also reduce our load shed requirement because it’s based on that consumption.”

As they work on an approach to scale up batteries, the utility is also rolling out a number of other demand response initiatives like Solar for All, which will use federal grant money to fund free solar panels for low-income residential customers. Those earning under $62,000 will qualify for the program, which will afford participants a 20 percent discount to their monthly bill along with an opportunity to purchase the infrastructure at the end of the 15-year contract.

As consumers continue to embrace electric vehicles, Austin Energy is also working to deploy vehicle-to-home and vehicle-to-grid distribution systems, aiming to leverage car batteries as yet another resource to deploy during outages and times of peak demand.

While a concrete timeline for the new battery incentive program is still up in the air, Genece says the utility hopes to roll out a pilot sometime within the calendar year. Readers can learn more about all the programs Austin Energy has to offer at its website.

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