FERC Signals Interest in Expanding Market Policies to Support Energy Storage

Last week, the Federal Energy storageRegulatory Commission (FERC) initiated a proceeding regarding the applicability of wholesale electricity market rules to energy storage resources. At this point, FERC is only gathering information. The agency requested data from Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs) on “whether barriers exist to the participation of electric storage resources in the capacity, energy, and ancillary service markets in the RTOs and ISOs potentially leading to unjust and unreasonable wholesale rates.” FERC simultaneously requested public comment on these issues.

FERC has been considering the incorporation of energy storage into wholesale markets since at least 2010, when the agency solicited comment on the rates, accounting, and financial reporting for emerging energy storage technologies. The agency also hosted a panel on the participation of electric storage resources in ISO/RTO markets last November.

Understanding that the current rules were designed with conventional generation in mind, FERC now seeks to identify changes that could better facilitate the dispatch of energy storage. FERC identified five areas as warranting particular consideration:

  • the eligibility of electric storage resources to participate in the ISO/RTO markets;
  • the technical qualification and performance requirements for market participants, including whether these requirements create undue barriers for electric storage;
  • the required bid parameters for market participants, including whether these parameters support the characteristics of energy storage;
  • the ability of electric storage resources located on the distribution grid or aggregated into a single resource to participate in the ISO/RTO markets; and
  • the treatment of electric storage resources when they are receiving electricity for later injection to the grid, including whether ISO/RTO tariffs should determine the appropriate price that energy storage resources pay for electricity.

FERC’s inquiries indicate that the agency believes that energy storage has a potentially significant role to play in ensuring reliable, efficient markets. The ISOs/RTOs must respond to FERC’s data request by May 2, 2016. Public comment must be submitted to the agency by May 23, 2016.

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