Battery storage that holds and releases solar and wind power when the sun won’t shine and a breeze doesn’t stir is drawing increased investment from developers as Maine tries to reach its clean energy goals.

The question of who can own energy storage is now before state regulators.

Central Maine Power and Versant Power have asked the Public Utilities Commission for permission to own battery storage, something that hasn’t been possible since the Legislature deregulated the utilities more than 25 years ago.

Critics are pushing back and urging regulators to reject the requests by the state’s two main utilities, which operate the transmission and distribution of electricity, and allow competitive energy storage markets to function undisturbed.

“Competition will be critical to fully leveraging the benefits and continued advances of energy storage technology for Maine ratepayers in the coming decades,” Competitive Energy Services, a Portland consulting business, told the PUC.

CMP’s request to the PUC is broad.

“Utilities should be permitted to own, have a financial interest in or otherwise control energy storage systems in order to perform its obligations as a transmission and distribution utility in an effective, prudent and efficient manner,” it said.

Utility investment in energy storage improves reliability and resiliency for customers and the grid, advances state policy goals and benefits customers with lower project costs due to CMP’s size and reach, it said.

Versant said utility ownership and operation of storage will be the “best and most cost-effective” way to operate the grid and benefit customers. It said it does not produce its own storage systems and in most cases would work with third parties, often competitively.

Legislation enacted last year directs the PUC to solicit comments on whether investor-owned utilities may own or have a financial interest in energy storage and if so, “at what cost and under what conditions.”

Gov. Janet Mills signed legislation in 2021 that established energy storage goals of 300 megawatts of power capacity by the end of 2025, enough to provide electricity to 300,000 homes, and 400 MW, or 20% of Maine’s peak electricity demand in 2021, by the close of 2030.

Already, developers are significantly increasing their requests to connect battery storage to New England’s grid. Projects made up about 35% of the proposed generating capacity in a queue of requests to connect to the grid as of February 2023, compared with 10% in July 2020 and less than 1% in May 2017, according to ISO-New England, the Massachusetts-based regional grid operator.

Locally, construction is set to begin this spring in Gorham on a more than $100 million battery storage project with up to 175 megawatts of capacity. Seven other storage projects have a capacity of about 61 megawatts obligated to be delivered to the New England grid by June 2026, demonstrating a “clear market response for developing energy storage in Maine,” according to Competitive Energy Services.

Critics say utilities view energy storage as a money-maker, which means it will boost revenue at the expense of ratepayers.

With ownership of battery storage, utilities “could unilaterally manipulate development and operation costs that ultimately show up on ratepayers’ bills,” the Maine Chapter of the Sierra Club told the PUC.

The Natural Resources Council of Maine agreed that if it’s allowed by regulators, utilities could exploit battery storage to charge ratepayers for capital expenses, system upgrades and personnel.

Not all environmental groups rule out utility ownership of energy storage. The Conservation Law Foundation said the PUC should “not close the door to utility ownership of energy storage systems but should carefully design and prescribe the conditions under which utilities may advance such systems” to comply with Maine’s restructuring law and prevent “anti-competitive influences on the energy storage market.”

When it deregulated electricity in 1997, the state ended utilities’ role in generating electricity. CMP and Versant were forced to split their work, focusing on transmission and distribution and jettisoning their generating businesses, which were opened to competition.

One focus in the dispute over battery storage ownership is a difference in opinion about how to define electricity generation. CMP told regulators that storage is not generation, which would allow it to enter a segment of the energy market that was closed by deregulation.

“Energy storage does not ‘generate’ energy,” the utility said. “It stores energy that is provided by another source (generation, electrical grid, solar, etc.) for use during periods when needed and enables efficient and cost-effective delivery.”

Storage shifts energy produced by another source “and from a technological perspective, generation and storage are two very different technologies,” CMP said.

Versant said in its PUC filing it does not believe energy storage is “equivalent to generation and it clearly is not generation.”

“Energy storage has capabilities and benefits that are different than, and far more flexible, than generation,” Versant said.

Critics disagree. The local Sierra Club chapter said in its filing with regulators that “energy storage systems of the type addressed by the PUC … are energy generation systems when needed for additional grid power, subject to recharge when not needed for that purpose.”

Advocates who oppose utility ownership of battery storage acknowledge that CMP and Versant will need to control, “in some regulated manner,” energy sent to the grid from storage, it said.

Competitive Energy Services said it would be “prudent for the utility to directly control and operate” energy storage systems in “carefully prescribed” cases.

However, CES said energy storage is not needed to meet Maine’s renewable energy goals or ensure reliable operation of the state’s electricity supply mix. Instead, smart grid technology and targeted expansions of transmission will hit those targets, it said.

The energy storage market is drawing private investment, and state-sponsored development of energy storage systems is a waste of ratepayer money, CES said. In the meantime, it said, regulators should tell utilities that “further meddling and nonsense in this area will not be tolerated.”

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