FERC Approves First Compliance Filings on Landmark Storage Rule

The Federal Energy Regulatory Commission (FERC) approved two orders to implement Order No. 841, which is a “landmark storage rulemaking aimed at breaking down market barriers to electricity storage.” Order No. 841 was enacted in February 2018, and it “addresses the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by organized wholesale power markets to more effectively integrate electric storage resources, enhance competition and help ensure that those markets produce just and reasonable rates.”

It “requires each organized power market to revise its tariff to establish a participation model consisting of market rules that recognize the physical and operational characteristics of electric storage resources and facilitate their participation in those markets.”

FERC Chairman Neil Chatterjee said “Electricity storage must be able to participate on an even playing field in the wholesale power markets that we regulate. Breaking down these market barriers encourages the innovation and technological advancements that are essential to the future of our grid.”

The orders they ruled in October 2019 address “compliance filings of Southwest Power Pool (SPP) and PJM Interconnection (PJM).” The two operators were found to have generally complied with the rule, but there was a need for further action. FERC “initiated proceedings under section 206 of the Federal Power Act to address the specific issue of minimum run-time requirements.”

“FERC found that both SPP’s and PJM’s proposals generally enable electric storage resources to provide all services they are capable of providing; allow electric storage resources to be compensated for those services in the same manner as other resources; and appropriately recognize the unique physical and operational characteristics of electric storage resources.” They were instructed by FERC to submit compliance filings within 60 days.

The tariffs for both of the operators do “generally satisfy Order No. 841’s directive allowing electric storage resources to de-rate their capacity to meet minimum run-time requirements, FERC also found that neither market includes in its tariff minimum run-time requirements for resource adequacy and capacity.” Since these can impact rates and the terms and conditions of service, FERC “instituted 206 proceedings, and directed SPP and PJM to submit tariff provisions reflecting their rules and practices regarding resource adequacy minimum run-time requirements and capacity minimum run-time requirements, respectively, for all resource types.”

PJM and SPP have to submit the tariff provisions within 45 days of the 206 notice’s publication in the Federal Register.