On April 14, 2017, Renewable Energy Systems Americas (“RES) and Invenergy Storage Development LLC (“Invenergy”) (collectively, the “Complainants”) filed a complaint with FERC against PJM Interconnection, L.L.C. (“PJM”), alleging that changes PJM made to a dispatch signal used in its Regulation market were unjust, unreasonable, and unduly discriminatory, and therefore in violation of the Federal Power Act (“FPA”) and FERC precedent.

Under the terms of the PJM Open Access Transmission Tariff, “Regulation” is a defined ancillary service.  PJM operates a Regulation market, which provides a market-based system for the sale and purchase of Regulation between market participants. PJM uses two distinct signals to dispatch Regulation resources: (i) Regulation A (“RegA”), for resources with limited ramp rates (e.g., traditional generators); and (ii) Regulation D (“RegD”), for energy-limited resources with faster ramp rates (e.g., batteries). PJM uses the RegA and RegD signals to dispatch Regulation resources around set points established by each resource.  The RegD signal was designed to be “energy-neutral,” meaning that over a specific period of time, the amount of energy injected by a resource above its set point would match the amount of reduced injection for a generator, or withdrawal for an energy storage resource, below the set point.

According to the Complainants, on January 9, 2017, PJM unilaterally modified the RegD signal so that it no longer dispatched RegD resources in a manner to maintain energy neutrality over a fifteen-minute period, as had been the case historically, but instead dispatched RegD resources in a manner that is conditionally-neutral over a thirty-minute period.  Complainants stated that the new signal requires storage projects to run through more extended charge/discharge periods, which “will reduce the service lives of these projects” and “mutes the efficiencies of the storage technologies,” which “affects the performance of these resources and reduces their compensation.”  Complainants contended that storage resources in PJM had been designed to respond optimally to a fifteen-minute energy neutral signal, and that the change imposed by PJM caused RES to experience a performance loss of approximately eleven percent.

Complainants argued that PJM’s actions were unduly discriminatory in violation of the FPA because PJM would not require RegA resources or any thermal generation units to operate outside of their design parameters, as PJM had done for storage resources.  Complainants also contended that PJM’s actions violated FERC precedent, as established in a 2014 case in which FERC rejected a proposal by ISO New England, Inc. to modify its dispatch signal for regulation resources.

Accordingly, Complainants requested that FERC: (i) find that PJM’s elimination of energy neutrality failed to recognize the operational characteristics of limited energy resources and has resulted in precluding energy storage resources from participating in the frequency regulation market, in violation of FERC precedent; and (ii) direct PJM to revert the regulation signals to those in effect prior to January 9, 2017.

A copy of the Complaint may be found here.