United States: FERC Staff Seeks Information From RTOs/ISOs On Energy Storage Participation In Wholesale Markets

On April 11, 2016, the Federal Energy Regulatory Commission's (FERC) Office of Energy Policy and Innovation (OEPI) sent identical data requests to each of the nation's six grid operators, requesting information on potential barriers to the participation of energy storage resources1 in capacity, energy and ancillary service markets operated by the Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). To aid in OEPI's examination, a letter requesting comments from market participants and the public was concurrently issued. If the RTO/ISO responses and public comments indicate that potential barriers exist, OEPI notes that it will further investigate "whether any tariff changes are warranted."

OEPI's two requests seek input on five parameters: (i) the eligibility of electric storage resources to be market participants, (ii) qualification criteria and performance requirements, (iii) bid parameters for electric storage resources, (iv) distribution-connected and aggregated electric storage resources, and (v) when electric storage resources are receiving electricity. Regarding eligibility parameters, OEPI states that it wants to identify potential market rules that might prohibit energy storage resources from participating, even if they are otherwise "technically capable of providing services."  If such barriers to participation exist, OEPI urges commenters to propose "potential tariff revisions in specific markets or general rules for all markets that would help clarify the eligibility of electric storage resources as market participants and remove any undue barriers to their participation."

OEPI specifically asked the RTOs/ISOs to identify "any forthcoming or pending proposals or ongoing stakeholder processes that could change or contemplate changing the rules by which electric storage resources" can buy or sell electricity in their respective markets. Only CAISO,2 NYISO3 and MISO4 have initiated ongoing stakeholder processes exploring the role of energy storage resources within their markets, though ISO-NE recently issued a paper to stakeholders on energy storage participation in its markets, and PJM's Markets & Reliability Committee recently approved a problem statement5 on distributed resources, including battery storage, in PJM markets.

As OEPI notes, FERC has been actively exploring energy storage issues for the previous five years, beginning with a 2010 Request for Comments Regarding Rates, Accounting and Financial Reporting for New Electric Storage Technologies and most recently through the convening of an energy storage panel at the November 19, 2015, Open Meeting.6

The data request responses from the RTOs/ISOs are due by May 2, 2016. Comments from market participants and the public, which FERC notes "should take into account" the responses from the RTOs/ISOs, are due May 23, 2016.

Footnotes

1 FERC Staff defines energy storage as "an electric storage resource as a facility that can receive electric energy from the grid and store it for later injection of electricity back to the grid. This includes all types of electric storage technologies, regardless of their size and storage medium, or whether they are interconnected to the transmission system, distribution system or behind a customer meter."

2 CAISO's Energy Storage and Distributed Energy Resources initiative focuses "on enhancing the ability of ISO connected and distribution-connected resources to participate in the ISO market, including . . . energy storage."  CAISO is currently in Phase 2 of its two-part initiative.

3 NYISO notes that its initiative intends to "evaluat[e] its current programs in which energy storage resources can participate and assess[] potential needs for expanding and/or enhancing such existing programs."

4 MISO's Market Subcommittee has conducted several workshops on energy storage as it looks to expand its definition of demand response to include energy storage. See Amanda Durish Cook, MISO Stakeholders Provide Ideas on Incorporating Storage, RTOInsider.com (Apr. 11, 2016), http://www.rtoinsider.com/miso-energy-storage-24839/.

5 A minor revision to this problem statement will be considered at the Markets & Reliability Committee's April 28, 2016, meeting.

6 The four presenters ¾ with links to their presentations ¾ were AES Energy Storage, CAISO, Department of Energy and Southern California Edison. In addition, FERC Staff delivered a presentation on its data request and request for comments at the April 21, 2016, Open Meeting.

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