The California Public Utilities Commission (CPUC) today unanimously established an energy storage target of 1,325 MW that California’s largest investor-owned utilities, Pacific Gas and Electric Company, Southern California Edison, and San Diego Gas & Electric, must meet by 2020.

The decision will help California optimize the grid with measure such as peak reduction, contribute to reliability needs, and defer transmission and distribution upgrade investments, the state regulator said. It will also help the state integrate renewables per its 33% by 2020 renewable portfolio standard and to aid the state in goals to cut greenhouse gas emissions to 80% below 1990 levels by 2050.

The decision directs the utilities to file separate procurement applications containing a proposal for their first energy storage procurement period by March 1, 2014. It also establishes a target for “Community Choice Aggregators” and electric service providers to procure energy storage equal to 1% of their annual 2020 peak load by 2020. Installation for all entities is required no later than 2024.

“This decision represents an important first step in encouraging the storage market and supporting grid reliability,” said Commissioner Carla J. Peterman, the lead commissioner for this proceeding.

Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)