FERC Seeks Information from RTOs/ISOs on Hybrid (Generation + Storage) Resources

Akin Gump Strauss Hauer & Feld LLP

[co-author: Shawn Whites]

On January 19, 2021, the Federal Energy Regulatory Commission (FERC) directed the nation’s six Regional Transmission Organizations and Independent System Operators (RTOs/ISOs) to submit reports on the integration of “hybrid” generation plus energy storage resources in their markets.1 FERC’s order asks RTOs/ISOs to provide input into their current practices and “any ongoing efforts to develop reforms” within four issue categories: (i) terminology (i.e., what constitutes a “hybrid resource”); (ii) interconnection (processes and requirements); (iii) market participation (including in wholesale energy, ancillary services and capacity markets); and (iv) capacity valuation.2 RTO/ISO reports are due July 19, 2021, and interested parties may submit comments on the reports by August 18, 2021.

FERC’s directive seeks to build the record on potential challenges and barriers to hybrid resource participation in the wholesale power markets, and follows its July 2020 technical conference on the topic, which we addressed here. FERC explained that RTOs/ISOs “are currently undertaking work to address the increase in hybrid resources” in their regions, and several have requested that FERC “allow such work to continue before taking additional action.”3 PJM Interconnection, L.L.C., for example, formed a new subcommittee last year to “identify operational and market enhancements needed to accommodate” the “more than 13,000 MW” of solar-plus-storage projects in its interconnection queue.4 Meanwhile, FERC recently accepted tariff revisions from the California Independent System Operator designed to serve as “an initial step toward developing more robust rules and models to integrate [hybrid] resources and optimize their performance.”5

Should RTO/ISO reports and public comments indicate that barriers exist, FERC’s next step could be a rulemaking proposing similar reforms to those adopted for energy storage and distributed energy resources in Order Nos. 841 and 2222.6

1 Hybrid Resources, 174 FERC ¶ 61,034, at P 1 (2020).

2 Id. P 3.

3 Id.

4 PJM Interconnection, L.L.C., New Subcommittee Focuses on Hybrid Resource Needs, PJM Inside Lines (Aug. 6, 2020), https://insidelines.pjm.com/new-subcommittee-focuses-on-hybrid-resource-needs.

5 Cal. Indep. Sys. Operator Corp., 173 FERC ¶ 61,146, at P 2 (2020).

6 See Elec. Storage Participation in Mkts. Operated by Reg’l Transmission Orgs. and Indep. Sys. Operators, Order No. 841, 162 FERC ¶ 61,127 (2018), order on reh’g and clarification, Order No. 841-A, 167 FERC ¶ 61,154 (2019); Participation of Distributed Energy Resource Aggregations in Mkts. Operated by Reg’l Transmission Orgs. and Indep. Sys. Operators, Order No. 2222, 172 FERC ¶ 61,247 (2020). 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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