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FERC Approves First Compliance Filings on Landmark Storage Rule

Order No. 841 requires each organized power market to revise its tariff to establish a participation model consisting of market rules that recognize the characteristics of electric storage resources.

The Federal Energy Regulatory Commission (FERC) recently approved the first two orders implementing Order No. 841, the landmark storage rulemaking aimed at breaking down market barriers to electricity storage.

Enacted in February 2018, Order No. 841 addresses the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by organized wholesale power markets to more effectively integrate electric storage resources, enhance competition, and help ensure that those markets produce just and reasonable rates. The rule requires each organized power market to revise its tariff to establish a participation model consisting of market rules that recognize the physical and operational characteristics of electric storage resources, and facilitate their participation in those markets.

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

"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."

The FERC found that both the SPP’s and the PJM’s proposals generally enable electric storage resources to provide all the services they are capable of providing; allow electric storage resources to be compensated for those services in the same manner as other resources; and appropriately recognize the unique physical and operational characteristics of electric storage resources. The FERC also directed both the SPP and the PJM to submit further compliance filings within 60 days.

Though the FERC found that the tariffs for both market operators generally satisfy Order No. 841’s directive allowing electric storage resources to derate their capacity to meet minimum run-time requirements, it also found that neither market includes in its tariff minimum run-time requirements for resource adequacy and capacity. Explaining that such requirements affect rates, terms, and conditions of service, the commission instituted 206 proceedings, and directed the SPP and the PJM 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. The SPP and the PJM must submit these tariff provisions no later than 45 days after the 206 notice is published in the Federal Register. The FERC also established paper hearing procedures to examine the PJM’s minimum run-time rules and procedures as applied to capacity storage resources.

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