On September 30, 2020, FERC accepted the California Independent System Operator Corporation’s (“CAISO”) proposals to: 1) permit electric vehicle charging stations to participate in CAISO’s demand response program separately from their host facilities (“EV Proposal”); and 2) incentivize behind-the-meter energy storage in CAISO’s demand response programs to “load shift” by consuming energy during over supply conditions and returning that energy to the system during times of need (“Load Shifting Proposal”). FERC held that CAISO’s proposals would enhance its demand response programs, which compensate load, storage, and generation resources for curtailing their demand in response to CAISO’s instructions. FERC also found that the proposals would ensure that CAISO’s policies keep pace with rapidly evolving electric vehicle and behind-the-meter storage technologies, and would permit these resources to participate in the CAISO market under rules that capture their unique characteristics and benefits.

With respect to its EV Proposal, CAISO explained that it is seeing increasing numbers of electric vehicle charging stations at large load centers like grocery stores, movie theaters, and offices. These charging stations can include their own generation and storage facilities, but frequently operate under the same retail meter and account as their host, despite the fact that the host and the charging station may have different load profiles. For example, an office building may have high demand during work hours, but charging station demand generally peaks immediately after morning commutes. Thus, in order to provide transparency and more accurate price signals for charging stations and host facilities participating in CAISO’s demand response programs, CAISO proposed to permit charging stations to be sub-metered and for their demand response performance to be measured separately from the host facility.

The EV Proposal was generally met with support, though certain transmission owners argued that it could not be implemented until the California Public Utilities Commission (“CPUC”) developed complementary rules. FERC rejected these concerns, finding that CAISO’s proposal would better capture electric vehicles’ distinct characteristics, provide more accurate price signals to electric vehicle owners, and create incentives for them to participate in demand response programs. FERC also encouraged CAISO and CPUC to coordinate to ensure consistency on demand response and metering rules for electric vehicles.

With respect to its Load Shifting Proposal, CAISO proposed to require behind-the-meter storage resources to submit separate bids to account for energy storage charging as a consumption resource and discharging as a curtailment resource. FERC agreed that enabling CAISO to incorporate both the charge and discharge functions of behind-the-meter storage resources should enhance reliability and market efficiency and may increase participation in demand response programs.

Click here to read FERC’s September 30 order.