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FERC Issues Final Rule on Electric Storage Participation in Regional Markets

February 21, 2018 By Molly White in

THE FEDERAL ENERGY REGULATORY COMMISSION (FERC) VOTED TO APPROVE A RULE

The Federal Energy Regulatory Commission (FERC) voted to approve a rule that would remove barriers to energy storage to having access to grid resources through the Regional Transmission Organizations and Independent System Operators. The order would essentially put energy storage on an equal playing field with generators and other grid resources. 

This rule is intended to enhance competition and promote greater efficiency in the nation’s electric wholesale markets and will help support the resilience of the bulk power system. 

Source: KMU Dispatch

Through its deliberations, the Commission indicated that market rules designed for traditional generation resources can create barriers to entry for emerging technologies such as electric storage resources. The final rule helps remove these barriers by requiring each regional grid operator to revise its tariff to establish a participation model for electric storage resources that consist of market rules that properly recognize the physical and operational characteristics of electric storage resources.

Each independent system operator and regional transmission organization must have tariff provisions providing a participation model for electric storage resources that meets the following requirements:

  1. Ensures that a resource using the participation model for electric storage resources in an independent system operator or regional transmission organization market is eligible to provide all capacity, energy, and ancillary services that it is technically capable of providing;
  2. Ensures that a resource using the participation model for electric storage resources can be dispatched and can set the wholesale market clearing price as both a wholesale seller and wholesale buyer consistent with rules that govern the conditions under which a resource can set the wholesale price;
  3. Accounts for the physical and operational characteristics of electric storage resources through bidding parameters or other means; and
  4. Establishes a minimum size requirement for resources using the participation model for electric storage resources that does not exceed 100 kW.

The final rule takes effect 90 days after publication in the Federal Register. Compliance filings by the RTOs and ISOs are due 270 days after the effective date, with an additional 365 days to implement the tariff revisions. For a copy of the final rule, click here