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FERC’s Moving Forward With Integration of Electric Storage Into Organized Markets

In November, the Federal Energy Regulatory Commission (FERC) proposed to more effectively integrate “electric storage resources” into organized wholesale markets, as a way to enhance competition and help ensure that these markets produce “just and reasonable rates.”

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The proposal stems from FERC’s concerns that electric storage resources may face barriers that limit them from participating in organized wholesale electric markets. FERC wants to “remove barriers to the participation of electric storage resources and distributed energy resource (DER) aggregations in the capacity, energy, and ancillary service markets.”

In April 2016, FERC issued Data Requests to the six Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs), as well as a Request for Comments to the public, seeking information on the rules that affect the participation of electric storage resources in the organized wholesale electric markets, as well as potential barriers to the participation of electric storage resources in those markets. These responses provided the basis for the reforms that FERC proposed in November.

This new Notice of Proposed Rulemaking would require each RTO and ISO to revise its tariff to:
– Establish a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, accommodates their participation in the organized wholesale electric markets, and
– Define distributed energy resource aggregators as a type of market participant that can participate in the organized wholesale electric markets under the participation model that best accommodates the physical and operational characteristics of its distributed energy resource aggregation.

In a statement announcing the Notice of Proposed Rulemaking, Commissioner Cheryl LaFleur noted that, “(S)uccessfully deploying distributed resources on a large scale…will require close coordination among the RTO/ISOs, the distribution control centers that operate the systems to which they are connected, and the distributed energy resource aggregators. This coordination could include, for example, real-time operating procedures and software-enabled communications among the control centers. Today’s order requires comments on these issues.”

FERC’s deadline for filing comments on this Notice of Proposed Rulemaking is February 13, 2017.

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