Federal Energy Regulatory Commission approves first compliance filings on energy storage rule

The Federal Energy Regulatory Commission (FERC) approved yesterday the first two orders implementing Order No. 841, which aims to break down market barriers to electricity storage.

Order No. 841, which was enacted in February 2018, requires that each organized power market revise its tariff to create a participation model with market rules that recognize the physical and operational characteristics of electric storage resources and support their participation in those markets.

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

Yesterday’s orders address the Order No. 841 compliance filings of two market operators, Southwest Power Pool (SPP) and PJM Interconnection (PJM). FERC found that SSP and PJM generally complied with the rule, and the commission largely accepted their filings. FERC also provided additional directives for further action and initiated proceedings under section 206 of the Federal Power Act to address the specific issue of minimum run-time requirements.

FERC found that the tariffs for SSP and PJM generally satisfy Order No. 841’s directive allowing electric storage resources to de-rate their capacity to meet minimum run-time requirements, but the commission also found that neither market includes minimum run-time requirements for resource adequacy and capacity in its tariff. Because of this, FERC instituted rule 206 proceedings and directed the two market operators 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.

SPP and PJM must submit these tariff provisions no later than 45 days after the 206 notice is published in the Federal Register. FERC also established paper hearing procedures to examine PJM’s minimum run-time rules and procedures as applied to capacity storage resources.

FERC also directed both SPP and PJM to submit further compliance filings within 60 days.

“FERC’s decision that PJM must place rules regarding the capacity qualification of energy storage resources in its tariff is a tremendous step in fully removing barriers to energy storage in wholesale markets,” Energy Storage Association (ESA) CEO Kelly Speakes-Backman said. “Further, ESA is pleased to see FERC open a new proceeding on PJM’s proposed 10-hour duration requirement for qualifying energy storage capacity – which ESA has consistently stated is unjust and unreasonable. If consumers are to benefit from the cost savings storage can bring, grid operators must appropriately value that contribution, as intended by Order 841. We commend the leadership of Chairman Chatterjee and the entire Commission for defending market competition and clearing regulatory hurdles for energy storage.”