This article, from law firm McGuireWoods LLP, is authored by D. Cameron Prell
A recent story in GreenTech Grid discussed the market import of a recent FERC order. Be warned. The actual FERC order (found here and titled Order No. 784) is definitely written for the sleep-deprived wonk in some of us. Nevertheless, by making minor tweaks to certain transmission tariff requirements for regulated utilities, FERC may have taken great strides through the order to promote a more robust market for energy storage devices. In it, FERC revises certain market oversight regulations to improve scheduling, reporting, accounting and market-based price transparency for certain types of ancillary services (which includes self-supplied battery power by the way).
Among other things, FERC revised its regulations to reflect reforms to its Avista Corp. (See 87 FERC ¶ 61,223 (Avista), order on reh’g, 89 FERC ¶ 61,136 (1999)) policy governing the sale of ancillary services at market-based rates to public utility transmission providers (even for its own use). The Commission is also requiring each public utility transmission provider to add a statement to its Open Access Transmission Tariff (OATT) Schedule 3 indicating that it will take into account the speed and accuracy of regulation resources in its determination of reserve requirements for Regulation and Frequency Response service, including as it reviews whether a self-supplying customer has made “alternative comparable arrangements” as required by the applicable transmission schedule. Finally, the Commission is revising its accounting and reporting requirements to better account for and report transactions associated with the use of energy storage devices in public utility operations. This in turn could ensure that utilities are justly compensated for investing in energy storage products and services.
Fostering a robust market for energy storage has historically been challenging because energy storage technologies have not fit neatly into energy utilities’ traditional regulatory categories of generation, distribution, and load — or into the utility rate recovery structure. However, that has recently started to change, beginning in 2011 with the issuance of FERC Order No. 755, which increased the pay for “fast” responding sources such as batteries or flywheels that are bidding into frequency regulation service markets.
This new Order No. 784 expands the market for energy storage by allowing technologies such as fast batteries, flow batteries, and flywheels to compete against slower gas or coal-fired plants in the ancillary services market.
Filed Under: Energy storage, News, Policy