In February 2018, as part of its efforts to remove barriers for electric storage resources, the Federal Energy Regulatory Commission (FERC) issued its final rule on electric storage participation in organized markets (Order No. 841).  Order No. 841 directed Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) to revise their tariffs to establish a participation model that recognized the physical and operational characteristics of electric storage resources.  FERC required that the participation model: (1) ensure that a resource is eligible to provide all capacity, energy, and ancillary services that the resource is technically capable of providing, (2) ensure that a resource can be dispatched and can set the wholesale market clearing price as both a wholesale seller and wholesale buyer, (3) account for physical and operational characteristics of electric storage resources through bidding parameters or other means, (4) establish a minimum size requirement that does not exceed 100 kW, and (5) specify that the sale of electric energy to an electric storage resource that the resource then resells back must be at the wholesale locational marginal price.

On Thursday, October 17, 2019, FERC issued its first two orders on Order No. 841 compliance filings – largely accepting the PJM Interconnection’s (PJM) and Southwest Power Pool’s (SPP) Order No 841 filings.  FERC found that both PJM (Docket No. ER19-469) and SPP (Docket No. ER19-460) submitted tariff revisions that were consistent with Order No. 841 and proposed market rules that recognized the physical and operational characteristics of electric storage resources and that facilitate their participation in the market.  But, even though it was not directly addressed in Order No. 841, FERC also directed SPP and PJM to further amend their tariffs to specify minimum run-time requirements for resources adequacy and capacity requirements, respectively, for all resources types.  Furthermore, going further outside Order No. 841, FERC also instituted a paper hearing on PJM’s minimum run-time rules for capacity storage resources.

FERC has taken its first steps in establishing the electric storage participation model in individual markets, with more to come in the remaining organized markets.