Exelon weighs $3 billion to $7 billion for regulated storage

Exelon's utilities could spend $3 billion to $7 billion building 1.5 GW to 3.5 GW of regulated energy storage, executives said on the company's Friday earnings call. The range excludes a $1 billion, 500-MW project with Invenergy pending before New Jersey regulators, Utility Dive reported.

Three of the states where Exelon's utilities operate — New Jersey, Maryland and Delaware — let them own storage outright, CFO Robert Kleczynski said. "With regulated storage, we have certainty that projects get built, and control over when and how they're deployed," he said. He described utility-owned storage as one option alongside competitive development, not a replacement for it.

For infrastructure allocators, the plan creates a second model for PJM storage: utility-owned assets recovered through customer rates, with the investment tax credit passed back to customers. Kleczynski said customers would gain through lower capacity prices and the credit flow-through would ease the effect on electricity rates. Because spending runs through state commissions rather than PJM's capacity auction, returns will likely be set by regulatory approval and cost recovery rather than market clearing prices.

Atlantic City Electric's 500-MW project with Invenergy, already before New Jersey regulators, would be the largest battery installation in PJM, Kleczynski said. He said it is expected to provide more than $700 million in net benefits to customers.

The storage plan is aimed partly at a supply gap that CEO Calvin Butler says PJM is not closing fast enough. The grid operator's backstop capacity procurement plan and Interim Resource Adequacy Service proposal have been delayed by partial approvals at the Federal Energy Regulatory Commission.

The New Jersey Board of Public Utilities is expected to decide on the Atlantic City Electric project late in the first quarter of next year, the first test of the storage budget.