On April 1, 2019, FERC issued deficiency letters to the six FERC-jurisdictional ISOs and RTOs, asking for additional information about how they intend to comply with the directives of FERC Order No. 841. The specific ISOs and RTOs are: ISO New England Inc. (“ISO-NE”); Midcontinent Independent System Operator, Inc. (“MISO”); California Independent System Operator Corporation (“CAISO”); New York Independent System Operator, Inc. (“NYISO”); PJM Interconnection, L.L.C. (“PJM”); and Southwest Power Pool, Inc. (“SPP”). Each grid operator has thirty days to respond to the deficiency letters.
In February 2018, FERC issued Order No. 841 directing RTOs and ISOs to revise their market participation models to ensure markets rules allow services by energy storage resources (“ESRs”) (see February 20, 2018 edition of the WER).
The six RTOs and ISOs submitted compliance filings in December 2018, detailing a wide range of tariff provisions for storage participation. Upon review, FERC staff issued the deficiency letters, seeking further clarification and more granular detail about their respective proposed energy storage rules. While the deficiency letters varied by region, they each generally requested additional information about how each RTO or ISO’s tariffs provide for storage resources’ participation in their markets. The letters focused on issues such as physical and operational characteristics, charging requirements and metering, make-whole payments, self-scheduling, as well as the ability for storage to participate as both load and generation in wholesale markets.
FERC is asking the RTOs and ISOs to drill down further on the implementation details of how ESRs will participate in the wholesale markets. For example, FERC asked ISO-NE to explain whether a continuous storage facility would be compensated for its lost opportunity costs, if the RTO dispatched for reserves, rather than energy, subsequently experiences lost opportunity costs as the result of the change. FERC asked CAISO to explain how it could reconcile the difference between its own minimum size requirement for storage resources of 500 kW with Order No. 841’s minimum size of 100 kW. FERC asked PJM, for example, to explain how its existing ancillary service-related tariff provisions, generally applicable to many types of resources, will apply to the provision of ancillary services by electric storage resources. FERC asked NYISO to explain, among other things, why it used a narrower definition of ESRs than that adopted in Order No. 841, and whether NYISO’s definition would prevent the aggregation of ESRs. FERC asked MISO to explain how it will prevent ESRs located on the distribution system from being assessed duplicative charges for charging energy. FERC also asked MISO to clarify whether its proposed revisions will ensure that distribution-connected ESRs are not charged twice for the same charging energy for ESRs located behind the meter. FERC has asked SPP to further explain the requirements ESRs must meet to qualify as a capacity resource to satisfy an load serving entity’s resource adequacy requirement.
To read FERC’s deficiency letter to PJM, click here.
To read FERC’s deficiency letter to NYISO, click here.
To read FERC’s deficiency letter to SPP, click here.
To read FERC’s deficiency letter to MISO, click here.
To read FERC’s deficiency letter to CAISO, click here.
To read FERC’s deficiency letter to ISO-NE, click here.