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FERC Proposes to Remove Barriers to Wholesale Market Participation for Electricity Storage and Distributed Energy Resource Aggregators

On November 17, 2016, the Federal Energy Regulatory Commission (FERC) issued a notice of proposed rulemaking (NOPR) that, if adopted, would require organized wholesale electricity markets (RTO/ISO markets) to modify their open access transmission tariffs and market rules to accommodate electric storage resources and allow participation of distributed energy resource aggregators. This NOPR is part of FERC’s ongoing efforts to remove barriers to participation in wholesale electric markets. FERC recognizes that electric storage resources and distributed energy resources are often constrained by antiquated wholesale market rules that were, as FERC puts it, “developed in an era when traditional generation resources were the only resources participating in the organized wholesale electricity markets.” This NOPR will promote far greater market participation by storage resources of all types, including batteries, flywheels, compressed air and pumped hydro, as well as distributed resources such as distributed generation, electric storage, thermal storage and electric vehicles.

For electric storage resources, which are defined as resources capable of receiving electric energy from the grid and storing it for later injection of electricity back to the grid, the NOPR would require each RTO/ISO to implement tariff provisions that will:

  • Ensure an electric storage resource is eligible to provide services it is technically capable of providing
  • Incorporate bidding parameters that reflect the physical and operational characteristics of the resources
  • Ensure that electric storage resources can set the market clearing price as a seller or buyer
  • Establish a minimum size requirement that does not exceed 100 kW
  • Specify that sales and purchases must be made at the wholesale locational marginal price


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Inter-regional Plans for the Nation’s High-Voltage Transmission Grid Land on FERC’s Doorstep

by Christopher S. Bloom

Jurisdictional Public Utility Transmission Providers (TP) filed earlier this week with the Federal Energy Regulatory Commission (FERC) inter-regional plans for the efficient and economical coordination of the construction and financing of high-voltage electricity transmission lines pursuant to FERC Order 1000. The inter-regional plans are to address state and regional needs and policies, such as renewable portfolio standards, and are sure to determine how transmission is financed and how both transmission lines and new electric generation are sited.  Once approved by FERC the plans are to be incorporated in the open-access transmission tariffs (OATT) of the plan’s author —either the public utility or, in regions where they exist, the regional transmission organization or independent system operator. 

TPs submitted regional plans to FERC last October.  In the new inter-regional plans, neighboring TPs in separate regions are required to detail in their plans and procedures for coordinating transmission siting.  In particular, Order 1000 demands procedures for:

  • Coordinating and sharing the results of each region’s regional transmission plans to identify possible inter-regional transmission facilities that could address transmission needs more efficiently or cost-effectively than separate regional transmission facilities;
  • Identifying and jointly evaluating transmission facilities that are proposed to be located in neighboring transmission planning regions;
  • Exchanging annually planning data and information;
  • Disseminating to the public information on inter-regional transmission coordination procedures by maintaining a website or email list;
  • Adding to each TP’s OATT language describing the inter-regional transmission coordination procedures; and
  • Adopting inter-regional cost allocation of the costs of new inter-regional transmission. 

Order 1000 instructs that the inter-regional cost allocation methodology allocate costs only to regions hosting the transmission and do so only in amounts “roughly commensurate” with the estimated benefits each transmission planning region receives from the lines.  Insofar as a benefit-to-cost threshold is used to determine regional allocation, Order 1000 directs that the threshold not exceed a ratio of 1.25 without Commission approval.

The inter-regional plans, requiring all potential stakeholders to participate in evaluating future infrastructure additions to more efficiently site expansion, continue a decade of FERC policy initiatives aimed at creating an inclusive electricity grid.  Not every TP has yet submitted its inter-regional plans, as FERC granted 120 day extensions to the Southwest Power Pool, Inc. (SPP), the Midcontinent Independent System Operator, Inc. (MISO), and NorthWestern Corporation.  Upcoming blog posts will focus on specific inter-regional plans.

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