[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)]
[Proposed Rules]
[Pages 86522-86550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28194]
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Vol. 81
Wednesday,
No. 230
November 30, 2016
Part IV
Department of Energy
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Federal Energy Regulatory Commission
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18 CFR Part 35
Electric Storage Participation in Markets Operated by Regional
Transmission Organizations and Independent System Operators; Proposed
Rule
Federal Register / Vol. 81 , No. 230 / Wednesday, November 30, 2016 /
Proposed Rules
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Part 35
[Docket Nos. RM16-23-000; AD16-20-000]
Electric Storage Participation in Markets Operated by Regional
Transmission Organizations and Independent System Operators
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Energy Regulatory Commission (Commission) is
proposing to amend its regulations under the Federal Power Act (FPA) to
remove barriers to the participation of electric storage resources and
distributed energy resource aggregations in the capacity, energy, and
ancillary service markets operated by regional transmission
organizations (RTO) and independent system operators (ISO) (organized
wholesale electric markets).
DATES: Comments are due January 30, 2017.
ADDRESSES: Comments, identified by docket number, may be filed in the
following ways:
Electronic Filing through http://www.ferc.gov. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format.
Mail/Hand Delivery: Those unable to file electronically
may mail or hand-deliver comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
Instructions: For detailed instructions on submitting comments and
additional information on this process, see the Comment Procedures
Section of this document.
FOR FURTHER INFORMATION CONTACT:
Michael Herbert (Technical Information), Office of Energy Policy and
Innovation, Federal Energy Regulatory Commission, 888 First Street NE.,
Washington, DC 20426, (202) 502-8929, [email protected].
Heidi Nielsen (Legal Information), Office of the General Counsel,
Federal Energy Regulatory Commission, 888 First Street NE., Washington,
DC 20426, (202) 502-8435, [email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Background
A. Electric Storage Resource and Distributed Energy Resource
Aggregation Participation in Organized Wholesale Electric Markets
B. The Need for Reform
III. Discussion
A. Elimination of Barriers to Electric Storage Resource
Participation in Organized Wholesale Electric Markets
1. Creation of a Participation Model for Electric Storage
Resources
i. Introduction
ii. Current Rules
iii. Comments
iv. Proposed Reforms
2. Requirements for the Participation Model for Electric Storage
Resources
a. Eligibility To Participate in Organized Wholesale Electric
Markets
i. Introduction
ii. Current Rules
iii. Comments
iv. Proposed Reforms
b. Bidding Parameters for Electric Storage Resources
i. Introduction
ii. Current Rules
iii. Comments
iv. Proposed Reforms
c. Eligibility To Participate as a Wholesale Seller and
Wholesale Buyer
i. Introduction
ii. Current Rules
iii. Proposed Reforms
d. Minimum Size Requirement
i. Introduction
ii. Current Rules
iii. Comments
iv. Proposed Reforms
e. Energy Used To Charge Electric Storage Resources
i. Introduction
ii. Current Rules
iii. Comments
iv. Proposed Reforms
B. Participation of Distributed Energy Resource Aggregators in
the Organized Wholesale Electric Markets
1. Introduction
2. Current Rules
3. Comments
4. Proposed Reforms
a. Eligibility To Participate in the Organized Wholesale
Electric Markets Through a Distributed Energy Resource Aggregator
b. Locational Requirements for Distributed Energy Resource
Aggregations
c. Distribution Factors and Bidding Parameters for Distributed
Energy Resource Aggregations
d. Information and Data Requirements for Distributed Energy
Resource Aggregations
e. Modifications to the List of Resources in a Distributed
Energy Resource Aggregation
f. Metering and Telemetry System Requirements for Distributed
Energy Resource Aggregations
g. Coordination Between the RTO/ISO, the Distributed Energy
Resource Aggregator, and the Distribution Utility
h. Market Participation Agreements for Distributed Energy
Resource Aggregators
IV. Compliance
V. Information Collection Statement
VI. Regulatory Flexibility Act Certification
VII. Environmental Analysis
VIII. Comment Procedures
IX. Document Availability
I. Introduction
1. In this Notice of Proposed Rulemaking (NOPR), the Federal Energy
Regulatory Commission (Commission) is proposing reforms to remove
barriers to the participation of electric storage resources \1\ and
distributed energy resource \2\ aggregations in the organized wholesale
electric markets.\3\ Specifically, we propose to require each RTO and
ISO to revise its tariff to (1) establish a participation model
consisting of market rules that, recognizing the physical and
operational characteristics of electric storage resources, accommodates
their participation in the organized wholesale electric markets and (2)
define distributed energy resource aggregators as a type of market
participant that can participate in the organized wholesale electric
markets under the participation model that best accommodates the
physical and operational characteristics of its distributed energy
resource aggregation. We are taking this action pursuant to our legal
authority under section 206 of the FPA to ensure that the RTO/ISO
tariffs are just and reasonable and not unduly discriminatory or
preferential.\4\
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\1\ We define an electric storage resource as a resource capable
of receiving electric energy from the grid and storing it for later
injection of electricity back to the grid regardless of where the
resource is located on the electrical system. These resources
include all types of electric storage technologies, regardless of
their size, storage medium (e.g., batteries, flywheels, compressed
air, pumped-hydro, etc.), or whether located on the interstate grid
or on a distribution system.
\2\ We define distributed energy resources as a source or sink
of power that is located on the distribution system, any subsystem
thereof, or behind a customer meter. These resources may include,
but are not limited to, electric storage resources, distributed
generation, thermal storage, and electric vehicles and their supply
equipment.
\3\ We define, for present purposes, organized wholesale
electric markets as the capacity, energy, and ancillary service
markets operated by regional transmission organizations (RTO) and
independent system operators (ISO).
\4\ 16 U.S.C. 824e (2012).
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2. Resource participation in the organized wholesale electric
markets is currently governed by (1) participation models \5\
consisting of market rules designed for different types of resources
and (2) the technical requirements for
[[Page 86523]]
market services that those resources are eligible to provide. Each RTO/
ISO establishes the participation models for different types of
resources and the technical requirements for providing services in a
slightly different way. Sometimes RTO/ISO participation models place
limitations on the services that certain types of resources are
eligible to provide. For example, Stored Energy Resources are only
allowed to provide regulation service in the Midcontinent Independent
System Operator, Inc. (MISO). In addition, sometimes the technical
requirements for providing a service may limit the types of resources
that are able to provide it, such as the requirement for a resource to
be running and synchronized to the grid to provide spinning reserves.
Many tariffs were originally developed in an era when traditional
generation resources were the only resources participating in the
organized wholesale electric markets. As new and innovative resources
have reached commercial maturity, RTOs/ISOs have updated their tariffs
to establish participation models for these resources and, to some
degree, reviewed the technical requirements for each service or
determined which service the new resource could provide. If an RTO/ISO
is not able to update its market rules before a new resource becomes
commercially able to sell into the organized wholesale electric
markets, the new resource may need to participate under one of the
existing participation models developed for some other type of
resource. Doing so may limit the market opportunities for new resources
and correspondingly limit the potential supply of some services. For
instance, some electric storage resources have chosen to participate as
demand response resources simply because, absent other participation
models, that is the participation model that more closely resembles the
manner in which electric storage resources might participate in the
organized wholesale electric markets. Further, new resources may have
difficulty creating momentum for the market rule changes necessary to
facilitate their participation and may thus need to spend considerable
time and effort to gain entry to the organized wholesale electric
markets. Where rules designed for traditional generation resources are
applied to new technologies, where new technologies are required to fit
into existing participation models, and where participation models
focus on the eligibility of resources to provide services more so than
the technical ability of resources to provide services, barriers can
emerge to the participation of new technologies in the organized
wholesale electric markets. We are therefore issuing this NOPR to
address these barriers to the participation of electric storage
resources and distributed energy resource aggregations in the organized
wholesale electric markets.
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\5\ We define a participation model as a set of tariff
provisions that accommodate the participation of resources with
particular physical and operational characteristics in the organized
wholesale electric markets of the RTOs and ISOs.
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3. First, we propose to require each RTO/ISO to revise its tariff
to establish a participation model consisting of market rules that,
recognizing the physical and operational characteristics of electric
storage resources, accommodates their participation in the organized
wholesale electric markets. As noted above, in this NOPR, we define a
participation model as a set of tariff provisions that accommodate the
participation of resources with particular physical and operational
characteristics in the organized wholesale electric markets of the RTOs
and ISOs.\6\ For example, the California Independent System Operator
Corporation's (CAISO) tariff defines several participation models,
including those for Participating Generators, Proxy Demand Resources,
Reliability Demand Response Resources, and Non-Generator Resources.
These participation models create unique rules for these different
types of resources where they need to be distinguished from other types
of market participants. For example, the CAISO Tariff defines Non-
Generator Resources as ``[r]esources that operate as either Generation
or Load and that can be dispatched to any operating level within their
entire capacity range but are also constrained by a MWh limit to (1)
generate Energy, (2) curtail the consumption of Energy in the case of
demand response, or (3) consume Energy.'' \7\ Since Non-Generator
Resources are operationally unique, CAISO has created rules for them
that include, but are not limited to, the requirement to enter into
participating generator and participating load agreements to
participate in the CAISO markets,\8\ the ability to participate in the
Regulation Energy Management program,\9\ the conditions under which
payments are rescinded due to MWh constraints,\10\ and the relevant
bidding parameters.\11\ Given the unique attributes of electric storage
resources, establishing a participation model consisting of market
rules that acknowledge their unique attributes will enable them to
effectively participate in the organized wholesale electric markets.
This participation model could adapt existing market rules to
incorporate the reforms proposed below and/or create a new set of rules
to accommodate the participation of electric storage resources,
depending on the existing market construct in each RTO/ISO.
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\6\ See supra note 5.
\7\ CAISO Response at 3 (citing CAISO Tariff, App. A).
\8\ See CAISO Tariff, sections 4.6 and 4.7.
\9\ See CAISO Tariff, section 8.4.1.2. Regulation Energy
Management is a market feature for resources located within the
CAISO Balancing Authority Area that require Energy from the Real-
Time Market to offer their full capacity as Regulation. CAISO
Tariff, App. A (Definitions).
\10\ See CAISO Tariff, sections 8.10.8.4 and 8.10.8.6.
\11\ See CAISO Tariff, section 30.5.6.
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4. The proposed participation model must (1) ensure that electric
storage resources are eligible to provide all capacity, energy and
ancillary services that they are technically capable of providing in
the organized wholesale electric markets; (2) incorporate bidding
parameters \12\ that reflect and account for the physical and
operational characteristics of electric storage resources; (3) ensure
that electric storage resources can be dispatched and can set the
wholesale market clearing price as both a wholesale seller and
wholesale buyer consistent with existing market rules that govern when
a resource can set the wholesale price; (4) establish a minimum size
requirement for participation in the organized wholesale electric
markets that does not exceed 100 kW; and (5) specify that the sale of
energy from the organized wholesale electric markets to an electric
storage resource that the resource then resells back to those markets
must be at the wholesale locational marginal price (LMP).
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\12\ We refer to bidding parameters as the physical and
operational constraints that a resource would identify per RTO/ISO
requirements when submitting offers to sell capacity, energy, or
ancillary services or bids to buy energy in the organized wholesale
electric markets. Commission Staff referred to these as ``bid
parameters'' in the Data Requests and Request for Comments issued on
April 11, 2016 in Docket No. AD16-20-000.
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5. Second, we propose to require each RTO/ISO to revise its tariff
to allow distributed energy resource aggregators,\13\ including
electric storage resources, to participate directly in the organized
wholesale electric markets. Specifically, we propose to require each
RTO/ISO to establish distributed energy resource aggregators as a type
of market participant and allow the distributed energy resource
aggregators to register distributed energy resource aggregations under
the participation model in the
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RTO/ISO tariff that best accommodates the physical and operational
characteristics of the distributed energy resource aggregation. We also
propose to require that each RTO/ISO, to accommodate the participation
of distributed energy resource aggregations in the organized wholesale
electric markets, establish market rules on: (1) Eligibility to
participate in the organized wholesale electric markets through a
distributed energy resource aggregator; (2) locational requirements for
distributed energy resource aggregations; (3) distribution factors and
bidding parameters for distributed energy resource aggregations; (4)
information and data requirements for distributed energy resource
aggregations; (5) modifications to the list of resources in a
distributed energy resource aggregation; (6) metering and telemetry
system requirements for distributed energy resource aggregations; (7)
coordination between the RTO/ISO, distributed energy resource
aggregator, and the distribution utility; and (8) market participation
agreements for distributed energy resource aggregators.
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\13\ We define distributed energy resource aggregator as an
entity that aggregates one or more distributed energy resources for
purposes of participation in the organized wholesale capacity,
energy, and ancillary service markets of the RTOs and ISOs.
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II. Background
A. Electric Storage Resource and Distributed Energy Resource
Aggregation Participation in Organized Wholesale Electric Markets
6. The Commission has an ongoing interest in removing barriers to
resources that are technically capable of participating in the
organized wholesale electric markets and has been monitoring electric
storage resource participation in these markets for some time. In 2010,
Commission Staff issued a Request for Comments Regarding Rates,
Accounting and Financial Reporting for New Electric Storage
Technologies related to alternatives for categorizing and compensating
storage services and, in particular, ideas on how best to develop rate
policies that accommodate the flexibility of storage, consistent with
the FPA.\14\ Following that request, the Commission issued several
rulemakings that have helped alleviate some of the barriers to electric
storage resource participation in organized wholesale electric
markets.\15\ In addition, the Commission has addressed electric
storage-related issues on a case-by-case basis.\16\
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\14\ Request for Comments Regarding Rates, Accounting and
Financial Reporting for New Electric Storage Technologies, Docket
No. AD10-13-000 (June 11, 2010).
\15\ See, e.g., Frequency Regulation Compensation in the
Organized Wholesale Power Markets, Order No. 755, FERC Stats. &
Regs. ] 31,324 (2011), reh'g denied, Order No. 755-A, 138 FERC ]
61,123 (2012) (addressing the provision of frequency regulation in
organized wholesale electric markets); Third-Party Provision of
Ancillary Services; Accounting and Financial Reporting for New
Electric Storage Technologies, Order No. 784, FERC Stats. & Regs. ]
31,349 (2013), order on clarification, Order No. 784-A, 146 FERC ]
61,114 (2014) (addressing third-party sales of ancillary services in
bilateral markets); Small Generator Interconnection Agreements and
Procedures, Order No. 792, 145 FERC ] 61,159 (2013), clarifying,
Order No. 792-A, 146 FERC ] 61,214 (2014) (addressing
interconnection for small generators, including electric storage
resources).
\16\ See, e.g., California Indep. Sys. Operator Corp., 156 FERC
] 61,110 (2016); Nev. Hydro Co., Inc., 122 FERC ] 61,272 (2008),
reh'g denied, 133 FERC ] 61,155 (2010); Western Grid Development,
LLC, 130 FERC ] 61,056, reh'g denied, 133 FERC ] 61,029 (2010);
Midwest Indep. Trans. Sys. Operator, Inc., 129 FERC ] 61,303 (2009);
New York Indep. Sys. Operator, Inc., 127 FERC ] 61,135 (2009);
California Indep. Sys. Operator Corp., 132 FERC ] 61,211 (2010); PJM
Interconnection L.L.C., 151 FERC ] 61,208, order on reh'g, 152 FERC
] 61,064 (2015), order on reh'g and compliance, 155 FERC ] 61,157,
order on reh'g and compliance, 155 FERC ] 61,260 (2016); PJM
Interconnection, L.L.C., 132 FERC ] 61,203 (2010); Commonwealth
Edison Co., 129 FERC ] 61,185, at P 8 (2009).
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7. As the capabilities of electric storage resources and
distributed energy resources continue to improve and their costs
continue to decline, the Commission has become concerned that these
resources may face barriers that limit them from participating in
organized wholesale electric markets. To further examine this issue,
the Commission hosted a panel to discuss electric storage resources at
the November 19, 2015 Commission meeting. Subsequently, on April 11,
2016, Commission Staff issued data requests to each of the six RTOs/
ISOs, seeking information about the rules in the organized wholesale
electric markets that affect the participation of electric storage
resources (Data Requests).\17\ Concurrently, Commission Staff issued a
Request for Comments, seeking comments on whether barriers exist to the
participation of electric storage resources in the organized wholesale
electric markets that may potentially lead to unjust and unreasonable
wholesale rates (Request for Comments). In addition to the responses
from the RTOs/ISOs, Commission Staff received 44 sets of comments from
the entities identified in Appendix A.
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\17\ Specifically, Commission Staff requested information
related to (1) the eligibility of electric storage resources to
participate in the capacity, energy, and ancillary service markets
in the RTOs/ISOs; (2) the technical qualification and performance
requirements for market participants; (3) the bidding parameters for
different types of resources; (4) opportunities for distribution-
level and aggregated electric storage resources to participate in
the organized wholesale electric markets; (5) the treatment of
electric storage resources when they are receiving electricity for
later injection to the grid; and (6) any forthcoming rule changes or
other stakeholder initiatives that may affect the participation of
electric storage resources in the organized wholesale electric
markets.
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8. A number of RTOs/ISOs allow participation of distributed energy
resources, including electric storage resources, in the organized
wholesale electric markets through distributed energy resource
aggregations. For example, CAISO's Distributed Energy Resource Provider
model allows for the participation of aggregated distributed energy
resources in the energy and ancillary service markets.\18\ Other RTOs/
ISOs, including PJM Interconnection, L.L.C. (PJM), MISO, New York
Independent System Operator, Inc.'s (NYISO), and SPP, allow aggregation
in limited circumstances, typically linked to the requirement that the
demand-side, generation, and electric storage resources are located
behind the same point of interconnection or pricing node.\19\ ISO New
England Inc. (ISO-NE) also allows limited aggregations of generators,
Alternative Technology Regulation Resources, Asset Related Demands, and
demand resources subject to certain parameters.\20\
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\18\ See California Indep. Sys. Operator Corp., 155 FERC ]
61,229 (2016) (conditionally accepting tariff provisions to
facilitate participation of aggregations of distribution-connected
or distributed energy resources in CAISO's energy and ancillary
service markets).
\19\ See PJM Response at 20; MISO Response at 16; SPP Response
at 7.
\20\ ISO-NE Response at 26.
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B. The Need for Reform
9. The Commission must ensure that the rates, terms and conditions
of jurisdictional services under the FPA are just and reasonable and
not unduly discriminatory or preferential. Our proposal in this
proceeding is a continuation of efforts pursuant to our authority under
the FPA to ensure that the RTO/ISO tariffs and market rules produce
just and reasonable rates, terms and conditions of service.\21\ The
Commission has observed that market rules designed for traditional
generation resources can create barriers to entry for emerging
technologies. The Commission has responded by promulgating rules that
recognize the operational characteristics of non-traditional resources
such as variable energy
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resources and demand response.\22\ For example, in Order No. 719, the
Commission required each RTO/ISO to accept bids from demand response
resources, on a basis comparable to any other resources, for ancillary
services that are acquired in a competitive bidding process, if the
demand response resources met certain criteria.\23\ In Order No. 764,
the Commission took action to remedy operational and other challenges
associated with the integration of variable energy resources caused by
existing practices as well as the ancillary services used to manage
system variability that were developed at a time when virtually all
generation on the system could be scheduled with relative precision and
when only load exhibited significant degrees of intra-hour
variation.\24\
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\21\ See, e.g., Integration of Variable Energy Resources, Order
No. 764, FERC Stats. & Regs. ] 31,331, order on reh'g, Order No.
764-A, 141 FERC ] 61,232 (2012), order on reh'g, Order No. 764-B,
144 FERC ] 61,222 (2013); Wholesale Competition in Regions with
Organized Electric Markets, Order No. 719, FERC Stats. & Regs. ]
31,281 (2008), order on reh'g, Order No. 719-A, FERC Stats. & Regs.
] 31,292 (2009), order on reh'g, Order No. 719-B, 129 FERC ] 61,252
(2009).
\22\ See, e.g., Order No. 764, FERC Stats. & Regs. ] 31,331;
Order No. 719, FERC Stats. & Regs. ] 31,281.
\23\ Order No. 719, FERC Stats. & Regs. ] 31,281 at PP 19, 47-
48.
\24\ Order No. 764, FERC Stats. & Regs. ] 31,331.
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10. In this proceeding, we propose to require RTOs/ISOs to address
barriers to participation of electric storage resources in the
organized wholesale electric markets. As noted above, in this NOPR, we
define an electric storage resource as a resource capable of receiving
electric energy from the grid and storing it for later injection of
electricity back to the grid regardless of where the resource is
located on the electrical system.\25\ These resources include all types
of electric storage technologies, regardless of their size, storage
medium (e.g., batteries, flywheels, compressed air, pumped-hydro,
etc.), or whether located on the interstate grid or on a distribution
system.\26\ Electric storage resources include a number of different
technologies that can serve as a sink for, or source of, electricity.
Electric storage resources' ability to charge and discharge electricity
provides these resources with significant operational flexibility, and
they can be designed to provide a variety of grid services, including
bulk energy services (e.g., capacity and energy) and ancillary services
(e.g., regulation and reserves).\27\
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\25\ See supra note 1.
\26\ Id.
\27\ Sandia National Laboratories, DOE/EPRI Electricity Storage
Handbook in Collaboration with NRECA, Report No. SAND2015-1002,
Chapter 1 (Feb. 2015) (Sandia Report).
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11. The RTOs/ISOs have taken different approaches to integrating
electric storage resources into their organized wholesale electric
markets. While electric storage resources (including batteries,
flywheels, and pumped-hydro facilities) are already providing energy
and ancillary services in some organized wholesale electric markets,
these resources often must use existing participation models designed
for traditional generation or load resources that do not recognize
electric storage resources' unique physical and operational
characteristics. Some organized wholesale electric markets have defined
participation models in their tariffs for electric storage resources,
but those models limit the services that electric storage resources may
provide.\28\ For example, these models often allow eligible electric
storage resources to participate only in the regulation market. Other
organized wholesale electric market rules are designed for electric
storage resources with very specific characteristics, such as pumped-
hydro facilities or resources with less than a one-hour maximum run
time. Smaller electric storage resources are also generally restricted
to participating in the organized wholesale electric markets as demand
response, which can limit their ability to employ their full
operational range, prohibit them from injecting power onto the grid,
and preclude them from providing certain services that they are capable
of providing such as operating reserves.
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\28\ See, e.g., Midwest Indep. Trans. Sys. Operator, Inc., 129
FERC ] 61,303 at PP 40, 64 (Commission ``note[d] that the Midwest
ISO [SER] proposal is intended to implement a specific technology,
the fly-wheel technology developed by Beacon Power''; and SER
category was ``specifically designed for a specific technology that
provides short-term Stored Resources only in the regulating reserve
market''); MISO FERC Electric Tariff, section 1.S (Stored Energy
Resources); NYISO Services Tariff, section 2.12 (defining Limited
Energy Storage Resource as a ``Generator authorized to offer
Regulation Service only and characterized by limited Energy storage,
that is, the inability to sustain continuous operation at maximum
Energy withdrawal or maximum Energy injection for a minimum period
of one hour.''). NYISO limits Limited Energy Storage Resources to
providing regulation service only and Demand Side Resources and
Generators that can sustain operation for longer than one hour are
not eligible to be Limited Energy Storage Resources. NYISO Response
at 3-4.
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12. We take action in this NOPR so that electric storage resources
will be able to participate in the organized wholesale electric markets
to the extent they are technically capable of doing so based on rules
that take into account their unique characteristics and not based on
market rules designed for the unique characteristics of other types of
resources. Requiring electric storage resources to use participation
models designed for a different type of resource may fail to recognize
electric storage resources' physical and operational characteristics
and their capability to provide energy, capacity and ancillary services
in the organized wholesale electric markets. Current tariffs that do
not recognize the operational characteristics of electric storage
resources serve to limit the participation of electric storage
resources in the organized wholesale electric markets and result in
inefficient use of these resources (i.e., electric storage resources
may be dispatched to provide one service when they could, absent market
rule limitations, provide another service more economically). As a
result, resources, including electric storage resources, do not get
dispatched efficiently, thereby impacting the competitiveness of the
market outcomes. Limiting the services an electric storage resource is
eligible to provide and limiting the efficiency in which it is
dispatched to provide services may also inhibit developers' incentives
to design their electric storage resources to provide all capacity,
energy and ancillary services these resources could otherwise provide.
This further reduces competition for providing those services in the
organized wholesale electric markets. Effective integration of electric
storage resources into the organized wholesale electric markets would
enhance competition and, in turn, help to ensure that these markets
produce just and reasonable rates.
13. We are also concerned that existing RTO/ISO tariffs impede the
participation of distributed energy resources in the organized
wholesale electric markets by providing limited opportunities for
distributed energy resource aggregations. Distributed energy resources
include a variety of constantly evolving technologies (including, but
not limited to, electric storage resources, distributed generation,
thermal storage, and electric vehicles and their supply equipment) that
are connected to the power grid at distribution-level voltages. While
these distributed energy resources can at times effectively supply the
capacity, energy, and ancillary services that are exchanged in the
organized wholesale electric markets, they can at times be too small to
participate in these markets individually. In addition, responses to
the Data Requests and Request for Comments demonstrate that current
organized wholesale electric market rules often limit the services
distributed energy resources are eligible to provide, in many cases
only allowing these resources to be used as demand response or load-
side resources when they are located behind a customer
[[Page 86526]]
meter \29\ or by imposing prohibitively expensive or otherwise
burdensome requirements.\30\
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\29\ See, e.g., MISO Response at 15 (noting that electric
storage resources connected to the distribution system can
participate in its markets as Load Modifying Resources and Demand
Response Resources--Types I or II); PJM Response at 3-6 (stating
that, if an electric storage resource is located behind a customer
meter, then PJM considers it demand response, which is not studied
for deliverability and is not eligible to inject energy into the
distribution or PJM transmission system and noting that any
injection would subject it to generator interconnection
obligations).
\30\ See Energy Storage Association Comments at 29 (stating that
metering and telemetry requirements and interconnection processes
can pose prohibitively high transaction costs for the small project
sizes that characterize behind-the-meter storage, which creates
undue burdens on behind-the-meter storage participation in most
RTOs/ISOs and noting that the ability to bid aggregated distributed
resources into wholesale markets is not possible in some RTOs/ISOs
and is unclear in others (such as NYISO, which does not allow
aggregations to meet the 1 MW size for a Limited Energy Storage
Resource)). Energy Storage Association also asserts that at present
most RTOs/ISOs do not allow behind-the-meter storage to net inject
power to provide wholesale generator services. Id. See also NextEra
Comments at 11 (stating that every RTO/ISO prohibits behind-the-
meter resources from having net injections to the grid).
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14. As with electric storage resources, we preliminarily find that
the barriers to the participation of distributed energy resources
through distributed energy resource aggregations in the organized
wholesale electric markets may, in some cases, unnecessarily restrict
competition, which could lead to unjust and unreasonable rates.
Effective wholesale competition encourages entry and exit and promotes
innovation, incentivizes the efficient operation of resources, and
allocates risk appropriately between consumers and producers. Removing
these barriers will enhance the competitiveness, and in turn the
efficiency, of organized wholesale electric markets and thereby help to
ensure just and reasonable and not unduly discriminatory or
preferential rates for wholesale electric services. We also note that
participation of electric storage resources in the organized wholesale
electric markets allows for more efficient operation of large thermal
generators, enhances reliability, provides congestion relief, improves
integration of variable energy resources, and reduces the burden on the
transmission system.\31\
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\31\ Among the benefits cited by a recent report by the Lawrence
Berkeley National Laboratory are (1) a less costly, cleaner, and
more competitive bulk power system and (2) greater reliability
through consumer reliance upon distributed energy resources to
provide resilience from bulk power and system and distribution
service interruptions. Lawrence Berkeley National Laboratory,
Electric Industry Structure and Regulatory Responses in a High
Distributed Energy Resources Future, at 26-28 (Report 1, Nov. 2015),
https://emp.lbl.gov/sites/all/files/lbnl-1003823_0.pdf (Berkeley Lab
Report). See also DNV-GL, A Review of Distributed Energy Resources:
New York Independent System Operator, at 18 (Sept. 2014) (DNV-GL
Report), http://www.nyiso.com/public/webdocs/media_room/publications_presentations/Other_Reports/Other_Reports/A_Review_of_Distributed_Energy_Resources_September_2014 (``Benefit
streams commonly attributed to distributed energy resources include,
among others: Avoided expansion of generation, transmission, or
distribution facilities, power outage mitigation or critical power
support during power outages (resiliency) and power quality
improvement (enhanced reliability); U.S. Department of Energy, The
Potential Benefits of Distributed Generation and Rate-related Issues
that May Impede Their Expansion: A Study Pursuant to Section1817 of
the Energy Policy Act of 2005 (Feb. 2007), https://www.ferc.gov/legal/fed-sta/exp-study.pdf.; IEA, Re-powering Markets: Market
design and regulation during the transition to low-carbon power
systems, at 33 (2016) (``active management of renewable resources
connected to distribution networks can help reduce or delay
distribution network investments'').
---------------------------------------------------------------------------
15. Distributed energy resource aggregations are often limited to
participating in organized wholesale electric markets as demand
response, which can limit the aggregations' design and operations, as
well as the services they may provide. However, advancements in
metering, telemetry, and communication technologies support the
aggregation of distributed energy resources, allowing these resources
to meet the minimum size requirements to participate in the organized
wholesale electric markets under participation models other than demand
response. Additionally, demand response models often prohibit
distributed energy resources from injecting power back onto the grid or
increasing consumption if there is an operational requirement for such
performance.\32\ By requiring RTOs/ISOs to allow the participation of
distributed energy resource aggregations, aggregators will be able to
bundle distributed energy resources to meet RTO/ISO qualification and
performance requirements, and the RTOs/ISOs will be able to capitalize
on the aggregation's full operational range. The recent proliferation
of, and technological advancements in, distributed energy technologies,
as well as their decreasing costs, create opportunities for distributed
energy resource aggregations to be eligible to provide a variety of
services to the organized wholesale electric markets.\33\
---------------------------------------------------------------------------
\32\ See PJM Response at 5 (stating that, like other types of
resources that participate in PJM's markets only by providing load
reductions, demand-side electric storage resources are not studied
by PJM through the generation interconnection process and are not
allowed to inject energy beyond the customer's meter and onto the
distribution or transmission system, as applicable).
\33\ The Berkeley Lab Report notes that technological and
procedural innovation and advancements are leading to substantial
reduction in the cost of some of these resources, such as through a
continued long-term downward trend in the installed cost of solar
PV. Berkeley Lab Report at 50, App. A. It adds that there is a wide
range of forecasts of the potential for distributed energy resources
over the coming decades, some of which suggest that penetrations
could be significant. Estimated increases range from a current 11
percent distributed energy resource penetration rate to 19 percent
of required capacity (MW) in the Eastern Interconnection under a
base case analysis by 2030; and a projection of a 37.5 percent
penetration in the Western Interconnection by 2032. Id. at 51
(citing Western Electricity Coordinating Council, SPSC Study High
EE/DR/DG (Sept. 19, 2013), https://www.wecc.biz/_layouts/15/WopiFrame.aspx?sourcedoc=/Reliability/2032_HighEEDSMDG_StudyReport.docx&action=default&DefaultItemOpen=1;
Navigant Consulting, Inc., Assessment of Demand-Side Resources
Within the Eastern Interconnection, March 2013, http://bit.ly/EISPCdsr).
---------------------------------------------------------------------------
16. Accordingly, we propose to require the RTOs/ISOs to revise
their tariffs to: (1) Establish a participation model consisting of
market rules that, recognizing the physical and operational
characteristics of electric storage resources, accommodates their
participation in the organized wholesale electric markets and (2)
define distributed energy resource aggregators as a type of market
participant that can participate in the organized wholesale electric
markets under the participation model that best accommodates the
physical and operational characteristics of its distributed energy
resource aggregation. These proposed requirements will clarify how
electric storage resources and distributed energy resources of all
types and sizes may provide services in the organized wholesale
electric markets that they are technically capable of providing.
III. Discussion
A. Elimination of Barriers to Electric Storage Resource Participation
in Organized Wholesale Electric Markets
1. Creation of a Participation Model for Electric Storage Resources
i. Introduction
17. Resource participation in organized wholesale electric markets
is currently governed by (1) participation models consisting of market
rules designed for different types of resources and (2) the technical
requirements for market services that those resources are eligible to
provide. As noted above, in this NOPR, we define a participation model
as a set of tariff provisions that accommodate the participation of
resources with particular physical and operational characteristics in
the organized wholesale electric markets of the RTOs and ISOs.\34\
While these participation models are designed to
[[Page 86527]]
accommodate the unique characteristics of different resources, new
technologies may be required to fit into existing participation models
when market rules for their unique characteristics have not been
developed. Moreover, even where participation models for new
technologies, such as electric storage resources, do exist, they may
unnecessarily limit a resource's ability to qualify for the
participation model or to provide certain services using it, despite
the technical capabilities of the resource.
---------------------------------------------------------------------------
\34\ See supra note 5.
---------------------------------------------------------------------------
18. The Commission previously has allowed flexibility for each RTO/
ISO to approach the integration of electric storage resources in its
organized wholesale electric markets differently. RTOs/ISOs developed
most of their participation models before electric storage resources
achieved their current technical capability and commercial viability,
so some markets rely on these existing models for the participation of
electric storage resources. For example, ISO-NE indicates that, for an
electric storage resource to be eligible to provide all wholesale
services, it must register as a Generator Asset,\35\ which is a
participation model designed for traditional generation and which may
not reflect the distinct operational characteristics or capabilities of
electric storage resources. Alternatively, some RTOs/ISOs have created
participation models for electric storage resources that limit the
participation of those resources to the regulation market or are
designed for electric storage resources with very specific
characteristics, such as pumped-hydro facilities or resources with less
than a one-hour maximum run time.\36\ However, other RTOs/ISOs have
created participation models for electric storage resources to provide
a wider variety of services in the organized wholesale electric markets
(such as PJM's Energy Storage Resource model \37\ and CAISO's Non-
Generator Resource model \38\). Establishing a robust participation
model for electric storage resources will help remove barriers to the
participation of electric storage resources in the organized wholesale
electric markets and ensure that electric storage resources can provide
the services that they are technically capable of providing.
---------------------------------------------------------------------------
\35\ ISO-NE Response at 3-5.
\36\ MISO Response at 2 (stating that MISO's Stored Energy
Resource model is limited to regulation service); and NYISO Response
at 3-4 (stating that NYISO limits Limited Energy Storage Resources
to providing regulation service only).
\37\ An Energy Storage Resource is defined as a ``flywheel or
battery storage facility solely used for short term storage and
injection of energy at a later time to participate in the PJM energy
and/or Ancillary Services markets as a Market Seller.'' PJM Response
at 6 (citing PJM Tariff, Att. K, section 1.3.).
\38\ See supra note 7.
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ii. Current Rules
19. In their responses to the Data Requests, the RTOs/ISOs describe
opportunities for electric storage resources to provide various energy
and ancillary service market services. For example, in CAISO, electric
storage resources are eligible to participate in the energy and
ancillary service markets as Participating Generators, Non-Generator
Resources, Pumped Storage Hydro Units, or Demand Response Resources,
even as part of distributed energy resource aggregations.\39\ Under
ISO-NE's market rules, electric storage resources can provide all
services when they qualify as a generator, provide all services except
10-minute spinning and 10-minute non-spinning reserves when they
qualify as demand response, and provide regulation as an Alternative
Technology Regulation Resource.\40\
---------------------------------------------------------------------------
\39\ CAISO Response at 2-8. See California Indep. Sys. Operator
Corp., 155 FERC ] 61,229.
\40\ ISO-NE Response at 3-5.
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20. In MISO, electric storage resources are eligible to participate
as a Stored Energy Resource (which is only eligible to provide
regulation), a Generation Resource, a Use-Limited Resource that is
unable to operate continuously on a daily basis, and several types of
demand response resources (some of which are limited in the products
that they are eligible to provide).\41\ NYISO allows electric storage
resources to qualify as Energy Limited Resources, Limited Energy
Storage Resources (which are eligible to provide regulation service
only), or demand response resources.\42\ PJM allows electric storage
resources to participate as generation resources or demand-side
resources (which are not eligible to provide non-synchronized
reserves).\43\ Finally, SPP allows electric storage resources to
qualify as Demand Response Resources, Dispatchable Resources, External
Resources, External Dynamic Resources, and Quick-Start Resources, if
they can sustain output for 60 minutes.\44\
---------------------------------------------------------------------------
\41\ MISO Response at 7-8.
\42\ NYISO Response at 1-6.
\43\ PJM Response at 4.
\44\ SPP Response at 3-4.
---------------------------------------------------------------------------
21. Some RTOs/ISOs concede that their existing participation models
may fail to address the characteristics of certain electric storage
resources.\45\ CAISO urges the Commission to preserve some flexibility
for the RTOs/ISOs to develop market rules and participation models that
respond to electric storage developments.\46\
---------------------------------------------------------------------------
\45\ MISO Response at 3; NYISO Response at 17.
\46\ CAISO Response at 1-2.
---------------------------------------------------------------------------
iii. Comments
22. Numerous commenters argue that the lack of a participation
model that accommodates the participation of electric storage resources
creates barriers to their participation in organized wholesale electric
markets. For example, Alevo asserts that the lack of a defined asset
class for electric storage resources poses a barrier to their
participation, limiting market efficiency and competition and
increasing costs.\47\ Advanced Energy Economy claims that the failure
to account for the unique attributes, characteristics, and benefits of
advanced energy technologies prevents projects from obtaining
financing.\48\ More specifically, Energy Storage Association asserts
that NYISO's Behind-the-Meter Net Generator design still effectively
excludes participation of electric storage resources because it does
not account for electric storage functionality.\49\
---------------------------------------------------------------------------
\47\ Alevo Comments at 4, 7-17 (pointing to its analyses of the
benefits that electric storage resource participation could provide
to energy, capacity, and ancillary service markets).
\48\ Advanced Energy Economy Comments at 7.
\49\ Energy Storage Association Comments at 29-30.
---------------------------------------------------------------------------
23. Many commenters request that the Commission require the RTOs/
ISOs to establish a participation model for electric storage resources
that allows them to provide all services.\50\ Alevo argues that such a
participation model should not limit duration of discharge or services
provided,\51\ while NY Battery and Energy Storage Consortium states
that it should utilize appropriate bidding parameters and resource
modeling for electric storage resources.\52\ California Energy Storage
Alliance asks the Commission to direct the RTOs/ISOs to develop a
market model specific to behind-the-meter electric storage resources,
which would allow them to respond to market signals to provide any
wholesale market service (e.g., frequency regulation, demand response,
spinning reserve) without restrictions, with its market participation
governed by minimum performance requirements.\53\ Electric Vehicle R&D
Group supports the creation of a separate participation model for
electric storage resources that
[[Page 86528]]
allows for bidirectional power flow.\54\ Duke Energy also encourages
modifications to market rules to facilitate electric storage resource
deployment, subject to reliability requirements and non-preferential
treatment.\55\
---------------------------------------------------------------------------
\50\ Id. at 8-9, 24; NY Battery and Energy Storage Consortium
Comments at 5; Ormat Comments at 2-3; Electric Vehicle R&D Group
Comments at 3.
\51\ Alevo Comments at 8.
\52\ NY Battery and Energy Storage Consortium Comments at 5.
\53\ California Energy Storage Alliance Comments at 4-5.
\54\ Electric Vehicle R&D Group Comments at 3.
\55\ Duke Energy Comments at 4.
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Other commenters explain how the existing participation models for
demand response resources, under which electric storage resources
sometimes participate in the organized wholesale electric markets, do
not adequately accommodate electric storage resource participation.
Advanced Microgrid Solutions asserts that the compensation methods
under demand response resource participation models should not be
applied to electric storage resources because, unlike the demand
reductions that demand response resources provide, the energy that
electric storage resources deliver is purchased in the form of energy
consumed during another time such that any net-benefit test is
unnecessary.\56\ Energy Storage Association, SolarCity, and California
Energy Storage Alliance contend that the baselines used to measure
demand response resource deliveries present a barrier to electric
storage resource participation under demand response participation
models and can limit the ability of behind-the-meter electric storage
resources to provide their full capability into wholesale markets.\57\
SolarCity further argues that requiring behind-the-meter electric
storage resources to participate as demand response creates a barrier
for these resources, as they are physically and economically capable of
providing electricity beyond the customer's load.\58\ Tesla contends
that customer-sited resources (such as electric storage resources) are
interactive grid resources that are often relegated to act as less
flexible demand response resources when participating in organized
wholesale electric markets.\59\ Energy Storage Association argues that
wholesale demand response constructs can prohibit behind-the-meter
electric storage resources from offering other services.\60\
---------------------------------------------------------------------------
\56\ Advanced Microgrid Solutions Comments at 5.
\57\ Energy Storage Association Comments at 28; SolarCity
Comments at 8; California Energy Storage Alliance Comments at 4.
\58\ SolarCity Comments at 4.
\59\ Tesla Comments at 4.
\60\ Energy Storage Association Comments at 28.
---------------------------------------------------------------------------
24. Many commenters also state that behind-the-meter electric
storage resources should be permitted to inject power beyond the retail
meter. Energy Storage Association and NextEra argue that no RTO/ISO
allows behind-the-meter storage to net inject power to provide
wholesale generator services.\61\ Similarly, Advanced Energy Economy
and Solar Grid Storage argue that PJM's restriction on the injection of
energy past a customer's retail meter during operations for providing
ancillary services in their markets is a barrier to storage.\62\ Solar
Grid Storage argues that PJM's ``no injection'' barrier effectively
excludes all residential customers with storage from participation in
the PJM ancillary service markets, despite the growing potential of
this customer segment to provide meaningful resources to that organized
market.\63\
---------------------------------------------------------------------------
\61\ Id. at 29; NextEra Comments at 11. NextEra explains that a
net injection is when the output of an electric storage resource
exceeds the customer's load that it is sited with and the electric
storage resource exports power back to the grid.
\62\ Advanced Energy Economy Comments at 16-17; Solar Grid
Storage Comments at 2.
\63\ Solar Grid Storage Comments at 3.
---------------------------------------------------------------------------
25. Some commenters call for the creation of a ``load increase''
participation model for electric storage resources that allows electric
storage resources to be dispatched to receive electricity from the
grid. For example, National Hydropower Association states that pumped-
storage projects are not adequately valued because they are regarded as
either a generator or a load, which results in the undervaluation of
these projects and no new major plants being built in the last 30
years.\64\ National Hydropower Association asks the Commission to
consider adding pumped-storage as a dispatchable ``load increase''
demand response resource.\65\
---------------------------------------------------------------------------
\64\ National Hydropower Association Comments at 5-6.
\65\ Id. at 6.
---------------------------------------------------------------------------
iv. Proposed Reforms
26. As numerous commenters state, existing RTO/ISO rules that
govern participation of electric storage resources in some organized
wholesale electric markets fail to ensure that electric storage
resources that are technically capable of providing specific services
are permitted to do so. Providing a participation model that recognizes
the unique characteristics of electric storage resources will help
eliminate barriers to their participation in the organized wholesale
electric markets and promote competition and economic efficiency. We
therefore propose to require each RTO/ISO to revise its tariff to
include a participation model consisting of market rules that,
recognizing the physical and operational characteristics of electric
storage resources, accommodates their participation in organized
wholesale electric markets.
27. As the costs of electric storage resources continue to decline
and their technical potential expands, the ability of these resources
to provide operational and economic benefits to the organized wholesale
electric markets will increase. We preliminarily find that it is
important to remove barriers to participation now so that the
competitive benefits are realized without delay.
28. We thus preliminarily find that it is necessary to take action
to remove barriers to the participation of electric storage resources
in organized wholesale electric markets by requiring that the RTOs/ISOs
revise their tariffs to establish a participation model consisting of
market rules that, recognizing the physical and operational
characteristics of electric storage resources, accommodates their
participation in the organized wholesale electric markets. In addition,
to accommodate the physical and operational characteristics of electric
storage resources, we propose to require that this participation model
satisfy each of the following requirements (as discussed in detail in
Section III.A.2 of this NOPR):
a. Electric storage resources must be eligible to provide all
capacity, energy and ancillary services that they are technically
capable of providing in the organized wholesale electric markets;
b. The bidding parameters incorporated in the participation
model must reflect and account for the physical and operational
characteristics of electric storage resources;
c. Electric storage resources can be dispatched and can set the
wholesale market clearing price as both a wholesale seller and a
wholesale buyer consistent with existing rules that govern when a
resource can set the wholesale price;
d. The minimum size requirement for electric storage resources
to participate in the organized wholesale electric markets must not
exceed 100 kW; and
e. The sale of energy from the organized wholesale electric
markets to an electric storage resource that the resource then
resells back to those markets must be at the wholesale LMP.
29. To further ensure that the proposed participation model for
electric storage resources will accommodate both existing and future
electric storage resource technologies, we propose that each RTO/ISO
define the criteria in its tariff that a resource must meet to qualify
to use this participation model based on the physical and operational
attributes of electric storage resources, namely their ability to both
charge and discharge energy. As such, the qualification
[[Page 86529]]
criteria for the proposed participation model must not limit
participation to any particular type of electric storage resource or
other technology. In addition, those qualification criteria should
ensure that the RTO/ISO is able to dispatch the resource in a way that
recognizes its physical constraints and optimizes its benefits to the
RTO/ISO. We do not at this time propose to define the qualification
criteria that each RTO/ISO use but rather propose to provide the RTOs/
ISOs with flexibility to propose qualification criteria that best suit
their proposed participation models. However, we invite comment on
whether the Commission should establish the qualification criteria and,
if so, what specific qualification criteria the Commission should
require.
30. We are not proposing to limit the use of this participation
model exclusively to electric storage resources as defined herein.
While the requirements for the proposed participation model set forth
here are designed to accommodate the physical and operational
characteristics of electric storage resources, we acknowledge that
there may be other types of resources whose physical or operational
characteristics could qualify under the proposed participation model.
This may be particularly true for the distributed energy resource
aggregations considered in Section III.B below.\66\
---------------------------------------------------------------------------
\66\ For example, resources such as thermal storage that can
both increase and decrease their energy consumption could aggregate
with other distributed energy resources with common physical or
operational characteristics and qualify as a market participant
using the participation model proposed here.
---------------------------------------------------------------------------
31. In addition to including a participation model for electric
storage resources in its tariff, we propose that each RTO/ISO propose
any necessary additions or modifications to its existing tariff
provisions to specify: (1) Whether resources that qualify to use the
participation model for electric storage resources will participate in
the organized wholesale electric markets through existing or new market
participation agreements; and (2) whether particular existing market
rules apply to resources participating under the electric storage
resource participation model. CAISO, for example, has adopted numerous
tariff revisions for its Non-Generator Resource participation
model.\67\
---------------------------------------------------------------------------
\67\ See, e.g., CAISO Tariff, sections 4.6 (Relationship Between
CAISO and supply resources), 4.7 (Relationship between CAISO and
participating loads), 8.4.1.2 (availability of Regulation Energy
Management to Scheduling Coordinators for Non-Generator Resources),
8.10.8.4 (Rescission of Ancillary Service Capacity Payments for Non-
Generator Resources), 8.10.8.6 (Rescission of Payments for
Regulation Up and Regulation Down Capacity), 11.8 (Bid cost recovery
for scheduling coordinators for Non-Generator Resources), 27.9 (MWh
Constraints for Non-Generator Resources), 30.5.6 (bid components of
Non-Generator Resource bids), 31.2 (Day-ahead market power
mitigation process), 34.1.5 (Mitigating of Bids in the real time
market), 40.10.3.2 Flexible Capacity Category--Base Ramping
Resources (addressing inclusion of Non-Generator Resources),
40.10.3.3 Flexible Capacity Category--Peak Ramping Resources
(addressing inclusion of Non-Generator Resources), 40.10.3.4
Flexible Capacity Category--Super-Peak Ramping Resources (addressing
inclusion of Non-Generator Resources), 40.10.6.1 (Day-Ahead and
Real-Time Availability providing for certain Non-Generator Resources
bidding requirements).
---------------------------------------------------------------------------
32. Finally, we recognize that there are implementation costs for
creating a new participation model for electric storage resources.
While we believe the participation model and its characteristics
described below will benefit the participation of electric storage
resources in the organized wholesale electric markets, we acknowledge
that the RTOs/ISOs will need to develop rules that govern the
participation model as well as make software changes to reflect how
these resources will be modeled and dispatched when they participate in
the markets. We therefore seek comment from the RTOs/ISOs on the
changes that would be required to implement the proposed participation
model for electric storage resources as well as the associated costs
and how those costs could be minimized.
2. Requirements for the Participation Model for Electric Storage
Resources
a. Eligibility To Participate in Organized Wholesale Electric Markets
i. Introduction
33. Electric storage resources have the potential to provide a
diverse array of services to the organized wholesale electric markets
and to be designed to meet various technical requirements. However, in
many cases, the existing participation models that electric storage
resources are eligible to use in the RTOs/ISOs preclude electric
storage resources from providing all of the services that they are
technically capable of providing. In other instances, barriers may
emerge as a result of the existing technical requirements for providing
certain services that may not be appropriate for fast and controllable
technologies such as electric storage resources. Market rules that were
designed for traditional generation technologies or that otherwise
prevent new technologies from providing services that they are
technically capable of providing can have detrimental impacts on the
competitiveness of the organized wholesale electric markets.
ii. Current Rules
34. Several of the RTOs/ISOs identify limitations on the services
that electric storage resources may provide, depending on the
participation model an electric storage resource elects to use. ISO-NE
states that the non-dispatchability of Settlement Only Resources and
non-dispatchable generators prohibits such resources from providing
operating reserves. In addition, resources that cannot provide energy
within 10 minutes cannot provide 10-minute spinning or 10-minute non-
spinning reserves.\68\ ISO-NE also states that demand response
resources with one or more controllable generators, including storage
resources, are not eligible to provide 10-minute spinning reserve. In
ISO-NE, electric storage resources can only provide regulation as an
Alternative Technology Regulation Resource.\69\
---------------------------------------------------------------------------
\68\ ISO-NE Response at 11.
\69\ Id. at 3-5.
---------------------------------------------------------------------------
35. MISO states that a Stored Energy Resource is not qualified for
capacity, energy, ramp capability and contingency reserves.\70\ MISO
states that Demand Response Resource--Type I is not eligible for
regulating reserve and ramp capability products and that Dispatchable
Intermittent Resources are a subset of Generation Resources that are
not eligible to provide regulating reserves and contingency reserves.
MISO states that the Load Modifying Resource category is designed to
provide energy in emergency conditions and is only intended for the
provision of capacity. MISO also states that Emergency Demand Response
can only provide emergency energy, on a voluntary basis.
---------------------------------------------------------------------------
\70\ MISO Response at 7-8.
---------------------------------------------------------------------------
36. NYISO states that Limited Energy Storage Resources are limited
to selling only regulation service in the ancillary service market.\71\
NYISO further states that Emergency Demand Response Program resources
are only eligible to provide energy, Special Case Resources are only
eligible to provide energy and capacity, and Demand Side Ancillary
Services Program Resources are only eligible to provide ancillary
services. PJM states that demand response resources, including electric
storage resources, are ineligible to provide non-synchronized reserves
because demand response resources are already synchronized to the grid
when consuming power, and so would always
[[Page 86530]]
be classified as sync reserves when curtailing.\72\
---------------------------------------------------------------------------
\71\ NYISO Response at 6-7.
\72\ PJM Response at 4.
---------------------------------------------------------------------------
iii. Comments
37. Many commenters point to organized wholesale electric markets
where electric storage resources cannot participate, or cannot
participate fully, because market rules are either designed for
traditional generation or they place unnecessary limitations on
electric storage resources. Both Advanced Energy Economy and NextEra
argue that a resource's eligibility to provide a particular service
should be based on whether it has the technical attributes necessary to
provide that service rather than on its participation model.\73\ EEI
argues that RTOs/ISOs may need to modify their tariffs to account for
electric storage resources because many existing market rules went into
place prior to the relatively recent advances in electric storage
technology.\74\ Likewise, Alevo contends that applying market rules to
electric storage resources that were designed for transmission,
generation, and demand assets unfairly disadvantages electric storage
resources.\75\ SolarCity claims that market rules that prevent the
participation of electric storage resources in multiple markets,
particularly for ancillary services, discriminate against behind-the-
meter electric storage resources that can provide multiple services
concurrently by preventing them from stacking multiple value
streams.\76\ SolarCity suggests that the provision of one wholesale
market product should not preclude provision of other wholesale market
products when resources are technically capable of providing multiple
services.
---------------------------------------------------------------------------
\73\ Advanced Energy Economy Comments at 10-11; NextEra Comments
at 5.
\74\ EEI Comments at 4.
\75\ Alevo Comments at 8.
\76\ SolarCity Comments at 5.
---------------------------------------------------------------------------
38. Some commenters note concerns with the eligibility of electric
storage resources to provide services in specific markets. According to
AES Companies, Indianapolis Power & Light Company's Harding Street
Battery Energy Storage System, a fully-developed grid-scale battery,
cannot participate in MISO's markets because of the limitations placed
on the services Stored Energy Resources are eligible to provide and the
way they are dispatched.\77\ AES Companies further note that MISO's
Stored Energy Resource definition specifically disallows capacity
accreditation, even though some electric storage resources have
sufficient discharge duration to provide capacity and ancillary
services.\78\ Similarly, Minnesota Energy Storage Alliance contends
that none of the participation models that allow electric storage
resources to participate in MISO's capacity, energy, and ancillary
service markets facilitate participation of battery storage
technologies and, in some cases, they limit the products an electric
storage resource can provide.\79\ In contrast, Manitoba Hydro, which
operates hydroelectric facilities with reservoir storage that
participate in the MISO market as Use-Limited Resources, states that
MISO's current market rules are not barriers to electric storage
resource participation.\80\
---------------------------------------------------------------------------
\77\ AES Companies Comments at 9-10 (citing MISO Response at 3).
\78\ Id. at 2, 14.
\79\ Minnesota Energy Storage Alliance Comments at 2, 4. For
example, Minnesota Energy Storage Alliance contends that MISO's
Demand Response Resource--Type I classification is inappropriate for
advanced electric storage resources because it is designed for
resources that respond as a single block, on or off, and cannot
provide regulating reserve and ramping products.
\80\ Manitoba Hydro Comments at 4.
---------------------------------------------------------------------------
39. NY Battery and Energy Storage Consortium asserts that NYISO's
market rules prevent electric storage resources from fully
participating in NYISO's markets, noting that electric storage
resources with less than 60 minutes of output duration can only
participate as Limited Energy Storage Resources and can only provide
regulation.\81\ NY Transmission Owners also argue that NYISO's rules do
not reflect the ability of certain electric storage resources to
provide their maximum output for regulation service over a multi-hour
period and do not allow them to participate in the energy and ancillary
service markets.\82\
---------------------------------------------------------------------------
\81\ NY Battery and Energy Storage Consortium Comments at 5.
\82\ NY Transmission Owners Comments at 3.
---------------------------------------------------------------------------
40. According to Energy Storage Association, resources that
participate under CAISO's Proxy Demand Response participation model are
prohibited from providing frequency regulation, even though they may be
technically capable of doing so.\83\ Finally, NextEra notes that ISO-
NE, NYISO, and MISO prohibit an electric storage resource offering
regulation from offering any other service, even though a longer-
duration electric storage resource could provide regulation from a
portion of its capacity while providing other reserve services or
energy from the remainder of its capacity.\84\
---------------------------------------------------------------------------
\83\ Energy Storage Association Comments at 28.
\84\ NextEra Comments at 5 (citing MISO Response at 7; ISO NE
Response at 3; NYISO Response at 7).
---------------------------------------------------------------------------
41. Other commenters focus on technical requirements that limit the
ability of electric storage resource to provide certain services. NRECA
states that minimum technical requirements should not create undue
barriers to resources capable of performing a service.\85\ Similarly,
APPA states that RTOs/ISOs should establish reasonable qualification
criteria on a resource-specific basis.\86\ NY Battery and Energy
Storage Consortium argues that distributed electric storage resources,
both grid-connected and customer-sited, face barriers to market
participation due to eligibility rules and qualification/performance
requirements that should be eliminated.\87\
---------------------------------------------------------------------------
\85\ NRECA Comments at 6-7.
\86\ APPA Comments at 10-11.
\87\ NY Battery and Energy Storage Consortium Comments at 6.
---------------------------------------------------------------------------
42. Some commenters focus on the technical requirements in the
regulation markets. Viridity explains that, while the rapid ramp rates
of electric storage resources allow them to provide regulation service,
their discharge is of limited duration, so RTOs/ISOs should utilize
these resources for short periods.\88\ According to Viridity, requiring
such resources to provide regulation service over longer periods is
inconsistent with the nature of frequency response and is detrimental
to the life span and effectiveness of these resources. NextEra contends
that, despite implementation of Order No. 755 (which removed certain
barriers to the ability of fast-acting resources to provide frequency
regulation service), MISO and SPP continue to rely on the slow ramping
automatic generation control signal developed for traditional
generation resources for regulation service.\89\ NextEra notes that
advanced electric storage technologies can respond faster than these
slower regulation signals allow. NextEra points out that, in contrast,
NYISO matches the dispatch of regulation resources to the specific
ramping capabilities of each resource.\90\
---------------------------------------------------------------------------
\88\ Viridity Comments at 3-4.
\89\ NextEra Comments at 9 (citing https://www.misoenergy.org/Library/Repository/Communication%20Material/Market%20Enhancements/Market%20Roadmap/Market%20Roadmap%20Priorities.pdf) (noting that
MISO is pursuing an automatic generation control enhancement that
would implement a faster signal similar to those used by other RTOs/
ISOs).
\90\ Id. at 9.
---------------------------------------------------------------------------
43. Other commenters contend that reliability standards may
preclude electric storage resources from providing certain ancillary
services. Specifically, Energy Storage Association states that NYISO
suggested that the Northeast Power Coordinating Council's (NPCC)
qualification criteria may prohibit grid-connected electric storage
[[Page 86531]]
resources from providing synchronized reserves because inverter-based
resources like electric storage cannot comply with the required
settings inherent to synchronous generators.\91\ Similarly, ISO-NE
states that demand response resources are precluded from providing 10-
minute spinning reserve per the ISO-NE tariff definition, which is
based on the NPCC requirement that loads cannot provide synchronized
reserve if the reduction in load is dependent on starting a
generator.\92\
---------------------------------------------------------------------------
\91\ Energy Storage Association Comments at 14, 27.
\92\ ISO-NE Response at 11.
---------------------------------------------------------------------------
44. National Electrical Manufacturers Association argues that, in
ancillary service markets, spinning reserves are limited to online,
synchronized spinning generation resources. According to National
Electrical Manufacturers Association, electric storage systems capable
of providing fast-reacting, synchronized electricity should be allowed
to compete fully to provide spinning reserves.\93\ Wellhead asks the
Commission to require changes to NERC definitions so that non-
synchronous resources are not categorically excluded from providing
reserves. Wellhead notes that, under the NERC definition of ``Spinning
Reserves,'' the phrase ``unloaded generation that is synchronized''
does not clearly allow electric storage resources to participate as
spinning reserves. Wellhead also notes that NERC's definition of
``Operating Reserves--Spinning'' also does not clearly allow for market
participation of electric storage resources because they are not
generation synchronized to the system.\94\
---------------------------------------------------------------------------
\93\ National Electrical Manufacturers Association Comments at
3.
\94\ Wellhead Comments at 3-4.
---------------------------------------------------------------------------
45. Commenters also note that the requirement in some RTOs and ISOs
to have an energy schedule to provide ancillary services is a barrier
to electric storage resource participation in ancillary service
markets. Commenting on MISO's market rules, Energy Storage Association
argues that electric storage resources should not have to offer energy
to participate in certain ancillary service markets because, unlike
traditional generators, electric storage resources are able to ramp
immediately to provide spinning reserve and ramping service without
having to provide energy to do so.\95\ Energy Storage Association
explains that requiring an electric storage resource to offer energy
greatly diminishes its capability to provide services in the ancillary
service markets because storage resources are energy-limited.
---------------------------------------------------------------------------
\95\ Energy Storage Association Comments at 13-14 (citing MISO
Response at 11, n.9 (referring to Business Practice Manual sections
that describe requirements for these products, which state
``Committed Generation Resources'' are eligible to provide these
products), 14, 27).
---------------------------------------------------------------------------
46. For the capacity markets, commenters ask the Commission to
clarify that an electric storage resource should be allowed to de-rate
its capacity (i.e., offer a quantity less than its nameplate capacity)
to ensure it can satisfy the minimum run-time requirement.\96\ Energy
Storage Association states, for example, that, in the NYISO and MISO
capacity markets, an electric storage resource with a run-time duration
of less than four hours relative to its nameplate capacity should be
able to qualify for capacity at a lower power level than it would be
able to sustain for four hours at nameplate output. More specifically,
NY Battery and Energy Storage Consortium states that a 10 MW/2-hour
storage resource should be able to qualify for 5 MW of capacity as long
as it can sustain 5 MW for 4 hours.
---------------------------------------------------------------------------
\96\ Id. at 22-23; NY Battery and Energy Storage Consortium
Comments at 6; RES Americas Comments at 4.
---------------------------------------------------------------------------
47. In contrast, some commenters, such as APPA, state that
eligibility is not a significant problem for electric storage
resources.\97\ Similarly, Electric Power Supply Association argues that
the RTO/ISO responses to the Data Requests show that electric storage
resources can fully participate in the organized wholesale electric
markets.\98\ The PJM Market Monitor also claims there are no market
rules that artificially preclude participation by electric storage
resources in any of PJM's markets.\99\ The PJM Market Monitor states
that electric storage resources can make offers directly into PJM's
wholesale markets to provide energy, capacity, and ancillary services
or can participate as demand response resources.
---------------------------------------------------------------------------
\97\ APPA Comments at 10.
\98\ Electric Power Supply Association Comments at 9.
\99\ PJM Market Monitor Comments at 4.
---------------------------------------------------------------------------
iv. Proposed Reforms
48. We propose to require RTOs/ISOs to modify their tariffs to
establish a participation model consisting of market rules for electric
storage resources under which a participating resource is eligible to
provide any capacity, energy, and ancillary service that it is
technically capable of providing in the organized wholesale electric
markets. In addition, we propose that electric storage resources should
be able, as part of the participation model, to be eligible to provide
services that the RTOs/ISOs do not procure through a market mechanism,
such as blackstart, primary frequency response, and reactive power, if
they are technically capable. Where compensation for these services
exists, electric storage resources should also receive such
compensation commensurate with the service provided.
49. We also propose to require each RTO/ISO to revise its tariff to
clarify that an electric storage resource may de-rate its capacity to
meet minimum run-time requirements to provide capacity or other
services. This proposed requirement will help ensure that electric
storage resources are able to provide all services that they are
technically capable of providing by accommodating their physical and
operational characteristics, while still maintaining the quality and
reliability of services they seek to provide. In RTOs/ISOs with
capacity markets, we propose that the de-rated capacity value for
electric storage resources be consistent with the quantity of energy
that must be offered into the day-ahead energy market for resources
with capacity obligations. We preliminarily find that this reform will
remove a barrier to the participation of electric storage resources in
the organized wholesale electric markets related to minimum run-time
requirements and help ensure that the resources that do de-rate their
capacity will be able to meet their capacity supply obligations if
called upon.
50. We preliminarily conclude that a market participant's
eligibility to provide a particular reserve service should not be
conditioned on requirements that were designed for synchronous
generators, specifically the requirement to be online and synchronized
to the grid to be eligible to provide ancillary services. Newer
technologies, particularly electric storage resources, tend to be
capable of faster start-up times and higher ramp rates than traditional
synchronous generators and are therefore able to provide ramping,
spinning, and regulating reserve services without already being online
and running. Therefore, we preliminarily find that participation in
ancillary service markets should be based on a resource's ability to
provide services when it is called upon rather than on the real-time
operating status of the resource.
51. However, we acknowledge that all of the RTOs/ISOs co-optimize
energy and ancillary services dispatch and pricing and therefore may
condition eligibility to provide ancillary services on having an energy
schedule. As a result, it is not clear whether
[[Page 86532]]
eliminating the requirement for a resource to be online and
synchronized to the grid would be impactful given the continued need to
have an energy schedule. Therefore we seek comment on whether the
requirement to have an energy schedule to provide ancillary services
could be adjusted so that electric storage resources and other
technically-capable resources could participate in the ancillary
service markets independent of offering energy to the RTO/ISO.
Specifically, we seek comment on whether dispatch and pricing of energy
and ancillary services would continue to be internally consistent if a
resource were not required to offer to provide energy in order to offer
to provide ancillary services. Further, we seek comment on whether the
capability of resources to provide an ancillary service absent an
energy schedule can be determined in the regular performance tests that
the RTO/ISO conducts and whether a resource's start-up time and ramp
capability are generally represented in bidding parameters and would
adequately guarantee the resource's ability to provide other services
absent energy market participation. Additionally, we seek comment on
the extent of software changes necessary to factor the elimination of
such an energy schedule requirement into the RTO/ISO co-optimization
models.
52. Several commenters also identified concerns with how
definitions in the Glossary of Terms used in NERC reliability standards
could potentially limit participation of electric storage resources and
other non-synchronous resources in the reserve markets. While it
appears that some of the Glossary of Terms definitions were created for
synchronous generation, it is unclear the extent to which these
definitions could potentially limit participation of non-synchronous
resources in the organized wholesale electric markets. Therefore, we
seek comment on whether and to what extent the Commission-approved NERC
Glossary of Terms and associated Reliability Standards or regional
reliability requirements may create barriers to the participation of
electric storage resources or other non-synchronous technologies in the
organized wholesale electric markets.
b. Bidding Parameters for Electric Storage Resources
i. Introduction
53. Bidding parameters allow resources participating in the
organized wholesale markets to identify their physical and operational
characteristics so that the RTO/ISO can model and dispatch the resource
consistent with its operational constraints. Due to an electric storage
resource's ability to both receive and provide electricity at varying
speeds and duration and to transition between operating modes, it may
be more efficient for the RTOs/ISOs to model, optimize, and dispatch
electric storage resources differently than they do traditional
generation. By requiring electric storage resources to use bidding
parameters developed for traditional generators or other supply
resources, RTOs/ISOs may fail to effectively utilize these resources,
possibly precluding electric storage resources from providing all of
the services that they are physically and technically capable of
providing in a way that optimizes their operational capabilities and
maximizes the benefits they provide. This barrier to electric storage
resource participation in organized wholesale electric markets could
lead to over-procurement of less efficient resources and increased cost
to load.
ii. Current Rules
54. Under current market rules, resource bidding parameters vary
greatly between the RTOs/ISOs. Some RTOs/ISOs require the same bidding
parameters from all resources offering into a specific market,
regardless of the participation model under which these resources
participate, while others tie bidding parameters to specific
participation models. For example, ISO-NE requires the same bidding
parameters from all resources, including electric storage resources,
participating in its capacity, forward reserve, and regulation
markets.\100\ In ISO-NE's energy market, bidding parameters reflect the
physical characteristics of each participation model such as maximum
daily starts, maximum consumption for dispatch asset related demand,
and minimum time between reduction for demand response resources.
Similarly, SPP requires all resources participating in its day-ahead
and real-time markets under any participation model to provide a
specific set of bidding parameters to validate their offers.\101\
---------------------------------------------------------------------------
\100\ ISO-NE Response at 24-25.
\101\ SPP Response at 5-6.
---------------------------------------------------------------------------
55. CAISO's market rules also require a defined list of parameters
for all bids. In addition, however, CAISO requires supplemental
parameters depending on the participation model under which a resource
is participating in its market (i.e., Participating Generator,
Participating Load, or Non-Generator Resource).\102\ Specifically,
CAISO explains that bids for participating loads, which include pumping
load or Pumped-Storage Hydro Units, may include pumping level (in
megawatts (MW)), minimum load bid (generation mode of a pumped-storage
hydro unit), load distribution factor, ramp rate, energy limit, pumping
cost, and pump shut-down costs.\103\ CAISO notes that, unlike under the
generator resource model, these resources must submit lower and upper
charge limits. Moreover, the Commission recently accepted revisions to
CAISO's tariff to allow scheduling coordinators representing non-
generator resources to include state-of-charge as a bidding
parameter.\104\
---------------------------------------------------------------------------
\102\ CAISO Response at 13-14 (citing CAISO Tariff, section 30).
\103\ Id. at 13-14 (citing CAISO Tariff, section 30.5.2.3).
\104\ California Indep. Sys. Operator Corp., 156 FERC ] 61,110.
---------------------------------------------------------------------------
56. Electric storage resources participating in NYISO's markets
must generally submit the same bidding parameters as other resources,
with some exceptions.\105\ Limited Energy Storage Resources providing
regulation service exchange a ``state of charge management'' signal
with the NYISO to facilitate the efficient use of their capabilities.
NYISO does not require Limited Energy Storage Resources, unlike other
generators, to provide regulation capacity response rates, normal
response rates, or emergency response rates with their regulation
service bids. In addition, in NYISO, electric storage resources acting
as a component of a Demand Side Ancillary Services Program resource may
only submit one normal response rate equaling the electric storage
resource's emergency response rate, while traditional generators may
submit up to three normal response rates.
---------------------------------------------------------------------------
\105\ NYISO Response at 12 (citing NYISO's Market Participant
User's Guide (Dec. 2015)).
---------------------------------------------------------------------------
57. In MISO, bidding parameters vary between markets and
participation models. MISO's market rules allow common bidding
parameters for each participation model, with a few exceptions.\106\
For example, since MISO manages the state of charge for Stored Energy
Resources, it requires the following additional bidding parameters for
these resources: Hourly maximum energy storage level; hourly maximum
energy charge rate; hourly maximum energy discharge rate; hourly energy
[[Page 86533]]
storage loss rate; and hourly full charge energy withdrawal rate.
---------------------------------------------------------------------------
\106\ MISO Response at 14-15 (citing MISO FERC Electric Tariff,
section 4.2.6 (Stored Energy Resource Offer)).
---------------------------------------------------------------------------
58. Bidding parameters in PJM also vary between markets and
participation models.\107\ Additionally, pumped storage resources
offering into the PJM energy markets may either self-schedule or have
PJM dispatch their unit pursuant to the pumped storage optimization
tool. In either case, the resource must submit the following
parameters: initial storage; final storage; maximum storage; minimum
storage; pumping efficiency factor; and min/max generating and pumping
limits.\108\
---------------------------------------------------------------------------
\107\ PJM Response at 18 (citing PJM Operating Agreement,
Schedule 1, section 6.6(f)).
\108\ Id. (citing PJM Manual 11, Attachment B).
---------------------------------------------------------------------------
iii. Comments
59. Some commenters focus on the current bidding parameters for
electric storage resources. NRECA states that the Commission should not
mandate bidding parameters for specific electric storage
resources.\109\ APPA states that, at this early stage of electric
storage resource development, the required bidding parameters should
not be so prescriptive as to determine the technologies allowed to
deploy, which may constrain the ability of load-serving entities to
adopt the least-cost solution.\110\
---------------------------------------------------------------------------
\109\ NRECA Comments at 7.
\110\ APPA Comments at 11.
---------------------------------------------------------------------------
60. In contrast, NextEra suggests that each RTO/ISO evaluate how
bidding parameters could allow electric storage resources to
participate fully in the energy, ancillary service, and capacity
markets.\111\ NextEra states that the specific bidding parameters
developed for pumped hydro are inadequate for batteries and other
advanced electric storage technologies. California Energy Storage
Alliance also urges evaluation of existing market bidding parameters to
identify revisions focused on the unique characteristics of electric
storage resources and their ability to act as both generation and
load.\112\ Energy Storage Association and NY Battery and Energy Storage
Consortium agree, recommending that RTOs/ISOs establish a participation
model that incorporates appropriate bidding parameters and resource
modeling for electric storage resources.\113\
---------------------------------------------------------------------------
\111\ NextEra Comments at 10-11.
\112\ California Energy Storage Alliance Comments at 1-2.
\113\ Energy Storage Association Comments at 8-12; NY Battery
and Energy Storage Consortium Comments at 5.
---------------------------------------------------------------------------
61. Some commenters address the physical and operational
characteristics of electric storage resources that create a need for
bidding parameters in a participation model for electric storage
resources that may differ from those required under participation
models for more traditional resources. For example, Alevo argues that
electric storage resources are not certain that they can participate in
RTO/ISO markets given modeling and bidding parameter limitations in the
current RTO/ISO market clearing and dispatch engines.\114\ Alevo and
Energy Storage Association state that the RTOs'/ISOs' market modeling,
which Alevo argues is based on traditional resource types that only
withdraw electricity from or inject electricity to the grid, does not
accommodate electric storage resources' charge and discharge
cycles.\115\ Alevo further contends that no current bidding parameters
offer charge and discharge signals that would allow electric storage
resources to provide peaking services.\116\ Similarly, RES Americas
contends that accounting for injections and withdrawals of energy to
and from the grid in bidding parameters would improve optimization and
dispatch across all asset classes.\117\
---------------------------------------------------------------------------
\114\ Alevo Comments at 20.
\115\ Id.; Energy Storage Association Comments at 9.
\116\ Alevo Comments at 20.
\117\ RES Americas Comments at 4.
---------------------------------------------------------------------------
62. A few commenters address bidding parameters in specific
organized wholesale electric markets. Energy Storage Association states
that MISO's Stored Energy Resource, ISO-NE's Alternative Technology
Regulation Resource, and NYISO's Limited Energy Storage Resource
participation models explicitly allow electric storage resource
participation.\118\ According to Energy Storage Association, these
participation models offer the bidding parameters and modeling
mechanisms (such as energy-neutral signal or state-of-charge
management) necessary for electric storage resource participation.
Minnesota Energy Storage Alliance and AES Companies, however, believe
that MISO's current dispatch algorithms do not effectively use electric
storage resources because they were designed for flywheels, while
advanced battery systems have the ability to continuously charge and
discharge.\119\
---------------------------------------------------------------------------
\118\ Energy Storage Association Comments at 9-10.
\119\ Minnesota Energy Storage Alliance Comments at 4; AES
Companies Comments at 21.
---------------------------------------------------------------------------
63. Other commenters discuss bidding parameters that relate to
specific services in the organized wholesale electric markets. National
Hydropower Association states that bidding parameters should reflect
electric storage resources' ability to respond to transients with
automatic voltage regulation, power system stability, and generator
droop.\120\ National Hydropower Association claims that the NERC
standards often require these services, but RTOs/ISOs do not include
them in any bid evaluation parameters.
---------------------------------------------------------------------------
\120\ National Hydropower Association Comments at 4.
---------------------------------------------------------------------------
64. Some commenters focus on state of charge as a bidding parameter
for electric storage resources. Alevo, NextEra, SolarCity, and Energy
Storage Association agree that bidding parameters need to reflect an
electric storage resource's state of charge.\121\ Alevo states that the
inability of the RTOs'/ISOs' dispatch and clearing engines to manage
hourly and sub-hourly dispatch and consider electric storage resources'
states of charge is a barrier to electric storage resource
participation.\122\ Alevo and Energy Storage Association recommend
including a state of charge bidding parameter in market engine
optimization and dispatch modeling because an electric storage
resource's energy level at any given moment affects the services it is
capable of providing in the subsequent interval.\123\ NextEra asserts
that, although some RTOs/ISOs manage batteries' state of charge when
providing regulation service, it is unclear how electric storage
resources (or the RTOs/ISOs) can reflect their state of charge in the
unit commitment and dispatch algorithms when providing other
services.\124\
---------------------------------------------------------------------------
\121\ Alevo Comments at 20; NextEra Comments at 10; SolarCity
Comments at 9; Energy Storage Association Comments at 11.
\122\ Alevo Comments at 20.
\123\ Id.; Energy Storage Association Comments at 11.
\124\ NextEra Comments at 10-11. NextEra points to CAISO's
proposal to allow energy storage resources to submit their state of
charge as a bid parameter in the day-ahead market. This proposal was
accepted by the Commission. See California Indep. Sys. Operator
Corp., 156 FERC ] 61,110 at P 10.
---------------------------------------------------------------------------
65. Some commenters focus on the ability of electric storage
resources to manage their own state of charge. SolarCity states that
RTOs/ISOs should allow electric storage resources to manage their state
of charge rather than relying on RTO/ISO accounting estimates of their
state of charge, which could lead to faulty dispatch instructions.\125\
Likewise, NextEra recommends that the RTOs/ISOs should allow electric
storage resources to choose between RTO/ISO-management and self-
management of state of charge.\126\ Energy Storage Association asks
that RTOs/ISOs clarify how they would model, optimize, dispatch, and
settle electric storage resources using
[[Page 86534]]
negative generation and state of charge parameters so that electric
storage resources understand how they will bid into the market, receive
dispatch signals, respond to those signals, and be compensated.\127\
AES Companies state that electric storage resources should be permitted
to optimize their own state of charge because MISO's operating software
ignores the benefits of constant charge and availability.\128\
---------------------------------------------------------------------------
\125\ SolarCity Comments at 9.
\126\ NextEra Comments at 10-11. See also Ormat Comments at 3.
\127\ Energy Storage Association Comments at 7.
\128\ AES Companies Comments at 21.
---------------------------------------------------------------------------
iv. Proposed Reforms
66. We propose to require each RTO/ISO to revise its tariff to
include a participation model for electric storage resources that
incorporates bidding parameters that reflect and account for the
physical and operational characteristics of electric storage resources.
The lack of a state-of-charge bidding parameter and the lack of ability
for electric storage resources to identify their maximum energy charge
rate and maximum energy discharge rate could result in electric storage
resources being dispatched in a manner that limits their operational
effectiveness. While some existing bidding parameters were developed
for older electric storage technologies (such as pumped-hydro
facilities), newer storage technologies (such as battery storage) have
greater flexibility to transition between charging and discharging.
Therefore, bidding parameters designed for slower storage technologies
or other types of generation resources that are not capable of charging
and discharging energy may limit the opportunity for faster electric
storage resources to participate in the organized wholesale electric
markets. Appropriate bidding parameters will allow electric storage
resources to provide all services they are technically capable of
providing and allow the RTOs/ISOs to procure these services more
efficiently.
67. Specifically, we propose that the RTOs/ISOs establish state of
charge, upper charge limit, lower charge limit, maximum energy charge
rate, and maximum energy discharge rate as bidding parameters for the
participation model for electric storage resources that participating
resources must submit, as applicable. The state of charge will allow
resources using the participation model for electric storage resources
to identify their forecasted state of charge at the end of a market
interval,\129\ as defined by the RTO/ISO, while the upper and lower
charge limits will prevent the operator from trying to give or take too
much energy from the resource. We expect that the state of charge would
be telemetered in real time when the RTO/ISO is managing the state of
charge, as discussed further below, so that the upper and lower charge
limits are not exceeded, but do not propose any specific telemetry
requirements. The maximum energy charge rate and maximum energy
discharge rate will be used to indicate how quickly the resource can
receive electricity from or inject it back to the grid. We
preliminarily find that these are the minimum bidding parameters
necessary for RTOs/ISOs to effectively dispatch electric storage
resources because they provide the RTOs/ISOs with the information about
the physical and operational characteristics of electric storage
resources that allow these resources to provide the services that they
are technically capable of providing.
---------------------------------------------------------------------------
\129\ See, e.g., CAISO Tariff, Att. A, section 30.5.6 (stating
that scheduling coordinators representing Non-Generator Resources
may submit bids including the state of charge for the day-ahead
market to indicate the forecasted starting physical position of the
Non-Generator Resource.).
---------------------------------------------------------------------------
68. We also propose to require that the participation models for
electric storage resources include the following bidding parameters
that market participants may submit, at their discretion, for their
resource based on its physical constraints or desired operation:
minimum charge time, maximum charge time, minimum run time, and maximum
run time.\130\ We preliminarily conclude that these optional bidding
parameters are necessary to reflect the wide range of physical and
operational characteristics of existing and future electric storage
technologies. Specifically, electric storage technologies such as
pumped-hydro facilities that seek to provide energy in the organized
wholesale electric markets have some physical and operational
characteristics that are closer to those of traditional generation than
those of small electric storage resources designed primarily to provide
regulation service. The optional bidding parameters that we propose
here would allow electric storage resources to indicate their
operational constraints to the RTO/ISO and would help these resources
to manage any costs or operational constraints that they incur when
transitioning between charging and discharging electricity. For
example, the opportunity to submit these optional bidding parameters
could allow an electric storage resource to prevent excessive
variability in its operations to help optimize the services that it is
available to provide and to preserve the life of the electric storage
resource.
---------------------------------------------------------------------------
\130\ We acknowledge that some of these optional bidding
parameters may not be necessary for resources participating under
the proposed participation model for electric storage resources that
provide certain information to the RTO/ISO through telemetry.
---------------------------------------------------------------------------
69. Also, where the RTO/ISO has reserved for itself the right to
manage the state of charge of an electric storage resource, we propose
to require that the RTOs/ISOs allow electric storage resources to self-
manage their state of charge and upper and lower charge limits. An
electric storage resource that opts to self-manage its state of charge
and upper and lower charge limits would keep its state of charge at an
optimal level through its own bidding strategy, rather than the RTO/ISO
market processes ensuring that dispatch does not violate its physical
constraints. The Commission recently accepted revisions to the CAISO
tariff that allow non-generator resources to self-manage their energy
limits and state-of-charge in real-time.\131\
---------------------------------------------------------------------------
\131\ California Indep. Sys. Operator, Corp., 156 FERC ] 61,110
at P 10.
---------------------------------------------------------------------------
70. Of course, an electric storage resource that self-manages its
state of charge is subject to any penalties for deviating from a
dispatch schedule to the extent the resource manages its state of
charge by deviating from the dispatch schedule. While RTOs/ISOs may be
in a better position to effectively manage the state of charge for an
electric storage resource that, for example, exclusively provides
regulation service in the organized wholesale electric markets, some
electric storage resources may be interested in providing multiple
service or providing services to another party, such as to a load with
which it is co-located. Affording electric storage resources the option
to manage their state of charge would allow these resources to optimize
their operations to provide all of the services that they are
technically capable of providing, similar to the operational
flexibility that traditional generators have to manage the wholesale
services that they offer. However, we seek comment on whether there are
conditions under which an RTO/ISO should not allow an electric storage
resource to manage its state of charge and upper and lower charge
limits.
71. While the inclusion of these bidding parameters would allow for
more efficient use of electric storage resources, their implementation
also requires the RTOs/ISOs to program these bidding parameters into
their modeling and dispatch software. The difficulty of implementing
these bidding parameters would likely vary from RTO/ISO to RTO/ISO.
Therefore, we seek
[[Page 86535]]
comment on the time and resources that would be necessary for the RTOs/
ISOs to incorporate these bidding parameters, including the optional
bidding parameters, into their modeling and dispatch software.
c. Eligibility To Participate as a Wholesale Seller and Wholesale Buyer
i. Introduction
72. The ability of electric storage resources to receive and
provide electricity positions them to be both buyers and sellers in the
organized wholesale electric markets. As the Commission has previously
recognized, a market functions effectively only when both supply and
demand can meaningfully participate.\132\ Improving electric storage
resources' opportunity to participate as both wholesale sellers of
services and wholesale buyers of energy could improve market efficiency
by allowing the RTO/ISO to dispatch these resources in accordance with
their most economically efficient use (i.e., as supply when the market
clearing price for energy is higher than their offer and as demand when
the market clearing price is lower than their bid). Moreover, allowing
electric storage resources to participate in the organized wholesale
electric markets as dispatchable load would allow these resources,
under certain circumstances, to set the price in these markets, better
reflecting the value of the marginal resource and ensuring that
electric storage resources are dispatched in accordance with the
highest value service that they are capable of providing during a set
market interval.
---------------------------------------------------------------------------
\132\ Demand Response Compensation in Organized Wholesale Energy
Markets, Order No. 745, FERC Stats. & Regs. ] 31,322, at P 1, order
on reh'g, Order No. 745-A, 137 FERC ] 61,215 (2011).
---------------------------------------------------------------------------
ii. Current Rules
73. Each RTO's/ISO's market rules that govern the eligibility of
electric storage resources to participate in the organized wholesale
electric markets as a demand resource are different. For example, CAISO
explains that an electric storage resource interconnected to the CAISO
grid with a participating generator agreement and participating load
agreement can submit offers to sell and bids to buy energy in the
wholesale market.\133\ According to SPP, submitting bids to purchase
energy in its market is within the resource owner's discretion.\134\
SPP notes that electric storage resources may submit virtual bids in
the day-ahead market at any location and a fixed or price-sensitive bid
at their registered load. In contrast, PJM explains that electric
storage resources do not submit wholesale bids to buy electricity.\135\
---------------------------------------------------------------------------
\133\ CAISO Response at 16.
\134\ SPP Response at 7.
\135\ PJM Response at 22.
---------------------------------------------------------------------------
74. ISO-NE states that, because it is dispatchable, an electric
storage resource participating as a Dispatchable Asset Related Demand
resource may submit bids to buy energy in both the day-ahead and real-
time energy markets; however, if it is participating as a load asset or
an Asset Related Demand, it may submit bids to buy energy in the day-
ahead market but would be a price taker in real-time.\136\
---------------------------------------------------------------------------
\136\ ISO-NE Response at 28 (citing ISO-NE Tariff, section
I.2.2).
---------------------------------------------------------------------------
75. MISO explains that, in the day-ahead market, electric storage
resources may submit bids to buy energy at the LMP when they need to
recharge as dispatchable demand or may submit virtual bids.\137\ MISO
further explains that in the real-time market, most load buys energy as
fixed demand and only Demand Response Resources--Type II can submit
demand response offers to buy energy.
---------------------------------------------------------------------------
\137\ MISO Response at 16.
---------------------------------------------------------------------------
76. NYISO states that Energy Limited Resources obtain charging
energy through negative MW value generation offers, rather than a bid
to buy energy.\138\ NYISO explains that demand-side resources
participating in the Special Case Resource Program, Emergency Demand
Response Program, Demand Side Ancillary Services Program, or Day-Ahead
Demand Response Program do not submit bids to buy energy in the
wholesale markets unless the resource is a load-serving entity, in
which case it purchases its entire load. NYISO states that a demand-
side resource may submit price-responsive load bids to take advantage
of off-peak prices to charge its electric storage resource. NYISO adds
that electric storage resources are not required to bid to buy
electricity from the NYISO market, but, like any load, may bid into the
day-ahead market as a price cap load bid.\139\
---------------------------------------------------------------------------
\138\ NYISO Response at 14-15.
\139\ Id. at 15 (citing NYISO Services Tariff, section 21.1).
---------------------------------------------------------------------------
77. The eligibility for an electric storage resource to set the
price in the organized wholesale electric markets also varies among the
RTOs/ISOs. For example, CAISO states that an electric storage resource
that is the marginal resource may set the price of energy and ancillary
services in CAISO's markets based on its economic bid.\140\ PJM states
that, with the exception of demand-side resources in the non-
synchronized reserve market, electric storage resources may set the
price as either a generation or as a demand-side resource in the
capacity, energy, and ancillary service markets.\141\ SPP states that
any resource, including an electric storage resource, qualified to
participate in an SPP market may set the price for the relevant
market.\142\
---------------------------------------------------------------------------
\140\ CAISO Response at 10.
\141\ PJM Response at 10.
\142\ SPP Response at 4.
---------------------------------------------------------------------------
78. ISO-NE states that, in each of its markets, electric storage
resources may be able to set the clearing price, depending on the
participation model that they are using to participate.\143\ ISO-NE
explains that only dispatchable resources (i.e., dispatchable generator
assets and dispatchable asset related demand) may set the clearing
price in the real-time energy market. ISO-NE explains that, in the day-
ahead energy market, an electric storage resource may set the price by
offering into the market as a generator resource, Asset Related Demand,
or Dispatchable Asset Related Demand. ISO-NE adds that, by qualifying
as a new generator resource or as a demand resource, an electric
storage resource may bid its qualified MWs into the capacity market and
set the clearing price. ISO-NE notes that an electric storage resource
or aggregation of electric storage resources may set the regulation
market clearing prices by offering as an Alternative Technology
Regulation Resource. ISO-NE states that an electric storage resource
may also set the market-clearing regulation price by offering into the
regulation market as a generator resource or Dispatchable Asset Related
Demand.
---------------------------------------------------------------------------
\143\ ISO-NE Response at 12-13. ISO-NE explains that, today,
Real-Time Demand Response assets are price-takers in the real-time
energy market but that, with the full integration of demand response
into the energy market scheduled for June 1, 2018, demand response
resources will have the potential to set market clearing prices.
---------------------------------------------------------------------------
79. MISO states that electric storage resources may set prices for
products in the market(s) in which they are eligible to participate.
MISO explains that, for example, an electric storage resource
registered as a Load Modifying Resource may set the price in the
capacity market. MISO states that an electric storage resource
registered as a Stored Energy Resource may set the price for regulating
reserve.\144\
---------------------------------------------------------------------------
\144\ MISO Response at 10.
---------------------------------------------------------------------------
80. NYISO explains that supply offers of electric storage resources
that participate as Energy Limited Resources may set the price for
capacity, energy, and ancillary services; Limited Energy Storage
Resources may set the price for regulation service. NYISO explains that
Special Case Resources and Emergency
[[Page 86536]]
Demand Response Program resource energy offers do not directly set the
price; rather, when these resources are dispatched, the NYISO's
scarcity pricing rules are triggered in the zone(s) in which they are
activated and may alter energy and certain ancillary services
prices.\145\
---------------------------------------------------------------------------
\145\ NYISO Response at 8.
---------------------------------------------------------------------------
iii. Proposed Reforms
81. We propose to require each RTO/ISO to revise its tariff to
ensure that electric storage resources can be dispatched and can set
the wholesale market clearing price as both a wholesale seller and
wholesale buyer consistent with existing rules that govern when a
resource can set the wholesale price. This proposal includes the
requirements that the RTOs/ISOs accept wholesale bids from electric
storage resources to buy energy so that the economic preferences of the
electric storage resources are fully integrated into the market, the
electric storage resource can set the price as a load resource where
market rules allow, and the electric storage resource can be available
to the RTO/ISO as a dispatchable demand asset. However, we note that
these requirements must not prohibit electric storage resources from
participating in organized wholesale electric markets as price takers,
consistent with the existing rules for self-scheduled load resources.
We also clarify that, while resources are not dispatched when they
clear the capacity markets, we are proposing that resources using the
participation model for electric storage resources be able to set the
price in the capacity markets, where applicable.
82. To optimize the capabilities of electric storage resources and
for the RTOs/ISOs to use them efficiently, it is important for the
RTOs/ISOs to be able to symmetrically utilize the capabilities of these
resources to both receive electricity from the grid and inject it back
to the grid. In other words, they must be able to dispatch electric
storage resources as supply when the market clearing price exceeds
their offers to sell and to dispatch electric storage resources as
demand when their bids to buy exceed the market clearing price. The
bidirectional capabilities of electric storage resources are what make
them unique, and allowing electric storage resources to participate in
the organized wholesale electric markets as both wholesale sellers and
wholesale buyers will help optimize the value that they provide and
enhance price formation, as they will be dispatched in accordance with
their most economic use.
83. We preliminarily conclude that the proposed requirement to
participate as a supply and demand resource simultaneously (i.e.,
submit bids to buy and offers to sell during the same market interval)
is necessary to maximize the value that electric storage resources can
provide in the organized wholesale electric markets, allowing the
markets to identify whether it is more economic to dispatch an electric
storage resource as supply or demand during a given market interval. We
expect that, through its bidding strategy, a resource using the
electric storage resource participation model would be able to prevent
any conflicting dispatch signals to itself. However, we seek comment on
whether there should be a mechanism that identifies bids and offers
coming from the same resource that ensures the price for the offer to
sell is not lower than the price for the bid to buy during the same
market interval so that an RTO/ISO does not accept both the offer and
bid of a resource using the electric storage resource participation
model for that interval.
84. Generally, in the organized wholesale electric markets,
resources that cannot be dispatched by the RTO/ISO do not set wholesale
prices. This is because the marginal clearing prices are based on the
shadow price of the next unit of incremental production, and a resource
that cannot be dispatched by the RTO/ISO cannot provide that
incremental unit of production. Therefore, we propose that, for a
resource using the proposed participation model for electric storage
resources to be able to set prices in the organized wholesale electric
markets as either a wholesale seller or a wholesale buyer, it must be
available to the RTO/ISO as a dispatchable resource. We believe this
proposal is consistent with RTO/ISO rules on price setting and are
further proposing that the ability for resources using the
participation model for electric storage resources to set the price be
consistent with existing rules that govern when a resource can set the
wholesale price. However, we seek comment on whether any existing RTO/
ISO rules may unnecessarily limit the ability of resources using the
participation model for electric storage resources to set prices in the
organized wholesale electric markets.
85. We note that resources using the proposed participation model
for electric storage resources that elect to submit economic bids as a
wholesale buyer and participate as dispatchable demand resources would
still be able to self-schedule their charging and be price takers.
However, it is also possible that the RTO/ISO could dispatch an
electric storage resource as load when the wholesale price for energy
is above the price of their bid to buy (a circumstance under which they
would lose the opportunity to earn greater revenues as a supply
resource). Therefore, to help alleviate any potential financial risk to
these resources when being dispatched as a demand resource, we seek
comments on whether the proposed participation model for electric
storage resources should allow make-whole payments when a resource
participating under this participation model is dispatched as load and
the price of energy is higher than the resource's bid price.
d. Minimum Size Requirement
i. Introduction
86. Depending on the technology, electric storage resources range
in size from 1 kW to 1 GW,\146\ and most of them tend to be under 1
MW.\147\ RTO/ISO market rules may restrict electric storage resources
from participating in the organized wholesale electric markets based on
minimum size requirements \148\ that may have been designed for
different types of resources. This is particularly true for smaller
electric storage resources, which may be limited to participating in
the organized wholesale electric markets as demand response resources.
Such restrictions can limit these resources' ability to employ their
full operational range because they are prohibited from injecting
electricity into the grid in excess of their host load and preclude
them from providing services such as reserves.
---------------------------------------------------------------------------
\146\ Sandia Report at 29, Figure 19 (Positioning of Energy
Storage Technologies).
\147\ U.S. Department of Energy, Grid Energy Storage at 12 (Dec.
2013) (stating that most storage systems are in the 10 kW to 10 MW
range, with the largest proportion of those resources in the 100 kW
to 1 MW range).
\148\ We use the term ``minimum size requirement'' to
collectively describe minimum capacity requirements to qualify to
use a given participation model, ``minimum offer requirements'' for
offers to sell services in the organized wholesale electric markets,
and ``minimum bid requirements'' for bids to buy energy in these
markets. When we are referring to a specific category of minimum
size requirement, we will use that specific term.
---------------------------------------------------------------------------
ii. Current Rules
87. Under existing market rules, minimum capacity, minimum offer
and minimum bid requirements for electric storage resources to
participate in the organized wholesale electric markets vary across the
RTOs/ISOs, with minimum size requirements ranging from 100 kW to 5 MW.
PJM and SPP have minimum offer requirements of 100 kW for all
resources, with other
[[Page 86537]]
RTO/ISO minimum size requirements varying across participation models
and markets.\149\
---------------------------------------------------------------------------
\149\ PJM Response at 10 (citing PJM Tariff, Att. DD, section
5.6); SPP Response at 5 (citing SPP Tariff, Att. AE section 1.1
(definition of ``Offer'')).
---------------------------------------------------------------------------
88. CAISO states that the minimum capacity requirement for demand
response resources is 100 kW and that all resources other than demand
response have minimum capacity requirements of 500 kW. Resources can
meet these minimum capacity requirements through aggregation.\150\
Alternatively, ISO-NE minimum capacity requirements range from 100 kW
for demand response resources, to 1 MW for Alternative Technology
Regulation Resources, to 5 MW for generators seeking to provide demand
response in the regulation market.\151\ Under MISO tariff rules,
minimum capacity requirements vary from 100 kW for Load Modifying
Resources, to 1 MW for demand response resources, to 5 MW for
generators.\152\ MISO states that it has not determined a minimum size
for Stored Energy Resources but believes a minimum of 1 MW is
appropriate.\153\ In NYISO, the minimum size requirement is 100 kW for
demand response resources and 1 MW for Energy Limited Resources and
Limited Energy Storage Resources.\154\
---------------------------------------------------------------------------
\150\ CAISO Response at 10-11 (citing CAISO Tariff, App. K, Part
A 1.1.1; Part B1.1; Part C1.1).
\151\ ISO-NE Response at 13-14 (citing ISO-NE Tariff, App. E2,
section I-III).
\152\ MISO Response at 10.
\153\ Id. at 16-17.
\154\ NYISO Response at 9.
---------------------------------------------------------------------------
89. The RTOs/ISOs also define minimum bid requirements for load
resources to buy energy from the organized wholesale electric markets.
In CAISO, the minimum bid requirement is 10 kW, the same as for
traditional generators.\155\ In MISO and SPP, the minimum bid
requirements are 100 kW.\156\ In ISO-NE, energy market bids cannot be
smaller than 100 kW.\157\ In NYISO, the minimum bid requirement is 1
MW, with the option to aggregate to meet that requirement.\158\
Electric storage resources do not submit bids to buy energy in the PJM
wholesale markets.\159\
---------------------------------------------------------------------------
\155\ CAISO Response at 16.
\156\ MISO Response at 17; SPP Response at 8.
\157\ ISO-NE Response at 29.
\158\ NYISO Response at 15.
\159\ PJM Response at 22.
---------------------------------------------------------------------------
iii. Comments
90. Several commenters address the minimum size requirements to
participate in the RTO/ISO markets, questioning whether the RTOs/ISOs
based those standards on technological requirements and system needs.
For example, NY Battery and Energy Storage Consortium argues that the
minimum size requirement for participation in organized wholesale
electric markets should be lowered.\160\ Public Interest Organizations
claim that minimum size requirements for electric storage resources to
participate in the organized wholesale electric markets may be a
barrier to distributed electric storage resources, especially those
that are small. Public Interest Organizations contend that, while the
opportunity to offer distributed energy resource aggregations into the
markets could help mitigate this concern, that opportunity is lacking
or unclear in some RTOs/ISOs.\161\
---------------------------------------------------------------------------
\160\ NY Battery and Energy Storage Consortium Comments at 6.
\161\ Public Interest Organizations Comments at 5.
---------------------------------------------------------------------------
91. Several commenters specifically cite the variability in the
minimum size requirements of the various RTO/ISO market participation
models as a barrier to electric storage resource participation. Energy
Storage Association contends that minimum size requirements for
electric storage resources may prohibit storage participation and lead
to inconsistencies across regions.\162\ Advanced Energy Economy argues
that it is not clear why the minimum size requirements for providing
services should vary from RTO/ISO to RTO/ISO and that these market rule
variations are a barrier to electric storage resource participation in
the organized wholesale electric markets.\163\ Public Interest
Organizations assert that disparate requirements in the RTO/ISO reports
indicate that some of these minimum limits may be arbitrary.\164\
---------------------------------------------------------------------------
\162\ Energy Storage Association Comments at 29.
\163\ Advanced Energy Economy Comments at 10-11.
\164\ Public Interest Organizations Comments at 5.
---------------------------------------------------------------------------
92. Other commenters identify specific minimum size requirements in
certain RTO/ISO markets as barriers to the participation of electric
storage resources in those markets. Minnesota Energy Storage Alliance
claims that MISO's 1 MW minimum size requirement for demand response
resources is not appropriate due to the lower minimum size requirements
in other RTOs/ISOs.\165\ Minnesota Energy Storage Alliance further
states that removing this requirement would allow electric storage
resources to more readily participate, providing economic justification
for project development and increasing MISO's operational flexibility.
NY Battery and Energy Storage Consortium asserts that NYISO's 1 MW size
requirement limits behind-the-meter electric storage resources from
participating in NYISO's day-ahead market, despite having the technical
capability to perform.\166\
---------------------------------------------------------------------------
\165\ Minnesota Energy Storage Alliance notes that size
restrictions do not apply to the load-modifying resource
classification, but such resources are only eligible to provide
capacity for MISO-declared emergency events and cannot provide
energy or ancillary services. Minnesota Energy Storage Alliance
Comments at 3-4.
\166\ NY Battery and Energy Storage Consortium Comments at 5-6.
---------------------------------------------------------------------------
93. Solar City and Viridity ask the Commission to consider
requiring all RTOs/ISOs to set a minimum requirement of 100 kW for
electric storage resource participation in their markets.\167\ Solar
City argues that a 100 kW minimum size requirement will ensure that
electric storage resources can provide value to markets at relatively
modest levels of penetration and participate in organized wholesale
energy markets even when locational requirements reduce the area over
which resources can be aggregated.\168\
---------------------------------------------------------------------------
\167\ SolarCity Comments at 9; Viridity Comments at 3.
\168\ SolarCity Comments at 9.
---------------------------------------------------------------------------
iv. Proposed Reforms
94. We propose that the minimum size requirement to participate in
the organized wholesale electric markets under the proposed electric
storage resource participation model must not exceed 100 kW. While we
acknowledge that minimum size requirements may be necessary to ensure
that the RTOs/ISOs can effectively model and dispatch the resources
participating in their markets, large minimum size requirements create
a barrier to the participation of smaller electric storage resources.
We preliminarily conclude that requiring that the minimum size
requirement not exceed 100 kW balances the benefits of increased
competition with the ability of RTO/ISO market clearing software to
effectively model and dispatch smaller resources often located on the
distribution system. Thus, we propose to require each RTO/ISO to revise
its tariffs to include a participation model for electric storage
resources that establishes a minimum size requirement for participation
in the organized wholesale electric markets that does not exceed 100
kW. This would include any minimum capacity requirements, minimum offer
requirements, and minimum bid requirements for resources participating
in these markets under the electric storage resource participation
model.
[[Page 86538]]
e. Energy Used To Charge Electric Storage Resources
i. Introduction
95. Electric storage resources must absorb electricity (i.e.,
charge) to sell that electricity, net of losses, back to an RTO/ISO as
energy or ancillary services. The manner in which an electric storage
resource charges (consumes) energy and discharges (produces) energy
will determine whether the electric storage resource is engaging in a
sale for resale subject to our jurisdiction.
ii. Current Rules
96. For the most part, the RTOs/ISOs indicate that electric storage
resources that are charging to later provide wholesale services in
their markets already pay LMP for that electricity. CAISO states that
all electric storage resources participating in its wholesale markets
pay LMP for their charging energy.\169\ ISO-NE states that electric
storage resources purchasing energy directly from the wholesale market
pay the LMP for the electricity they receive.\170\ MISO states that any
resources eligible to participate in MISO's capacity, energy, and
ancillary service markets pay LMP for the electricity they
receive.\171\ NYISO states that Energy Limited Resources using electric
storage resource technology and Limited Energy Storage Resources will
pay the wholesale price for the electricity they consume to meet a
regulation service schedule or to charge the resource if the resource
is either in front-of-the-meter (a generator) or a direct NYISO
customer (a load-serving entity). NYISO notes that, if the resource is
behind-the-meter and served by a separate load-serving entity, then it
would pay the load-serving entity's retail rate.\172\ PJM states that
an electric storage resource would pay wholesale LMP if the resource is
taking power off the system solely to inject into the energy or
ancillary service markets at a later time.\173\ SPP states that, in its
real-time market, electric storage resources pay the real-time LMP for
their load consumption, although they may also be subject to retail
rules for electric consumption.\174\
---------------------------------------------------------------------------
\169\ CAISO Response at 17.
\170\ ISO-NE Response at 29-30.
\171\ MISO Response at 17.
\172\ NYISO Response at 16.
\173\ PJM Response at 23.
\174\ SPP Response at 7.
---------------------------------------------------------------------------
iii. Comments
97. Several commenters address the issue of the price that electric
storage resources should pay for charging electricity when that
electricity is for later use in the organized wholesale electric
markets. For example, Alevo argues that it is not clear whether an
electric storage resource connected at the distribution level will pay
the LMP for its charging electricity, even if it is charging to provide
a wholesale service.\175\ Electric Vehicle R&D Group and NextEra
contend that current RTO/ISO tariffs do not provide enough clarity on
the price that storage pays for electricity,\176\ and that the RTOs/
ISOs should revise their tariffs to settle discharging and recharging
resources at LMP.\177\ Similarly, Tesla asks the Commission to clarify
that electricity stored for resale is not a retail sale and thus should
be settled at the wholesale LMP.\178\
---------------------------------------------------------------------------
\175\ Alevo Comments at 29.
\176\ Electric Vehicle R&D Group Comments at 13.
\177\ NextEra Comments at 13.
\178\ Tesla Comments at 5-6.
---------------------------------------------------------------------------
98. In contrast, Manitoba Hydro asserts that dispatchable electric
storage resources should either pay a lower LMP than non-dispatchable
resources or should receive a storage capacity credit for their
services because a MWh received by a storage resource for later
injection is different than a MWh consumed by traditional load.\179\
Minnesota Energy Storage Alliance similarly requests that dispatchable
electric storage resources pay a lower LMP or be compensated for the
service.\180\ AES Companies contend that it is inappropriate for an
electric storage resource to pay LMP when it is directed to charge and
that such a payment is a disincentive to new storage installation.\181\
---------------------------------------------------------------------------
\179\ Manitoba Hydro Comments at 10-12.
\180\ Minnesota Energy Storage Alliance Comments at 5.
\181\ AES Companies Comments at 23.
---------------------------------------------------------------------------
99. SoCal Edison argues that behind-the-meter electric storage
resources should not be allowed to charge at a wholesale rate and
discharge to serve a retail customer to allow the retail customer to
avoid paying the retail rate for its consumption.\182\ Addressing this
concern, some commenters suggest that metering and accounting practices
can be designed to delineate between wholesale and retail
activities.\183\
---------------------------------------------------------------------------
\182\ SoCal Edison Comments at 8.
\183\ Independent Energy Producers Association Comments, Att. at
7; Minnesota Energy Storage Alliance Comments at 5.
---------------------------------------------------------------------------
iv. Proposed Reforms
100. The Commission has found that the sale of energy from the grid
that is used to charge electric storage resources for later resale into
the energy or ancillary service markets constitutes a sale for
resale.\184\ As such, the just and reasonable rate for that wholesale
sale of energy used to charge the electric storage resource is the RTO/
ISO market's wholesale price for energy or LMP. We thus propose to
require each RTO/ISO to revise its tariff to specify that the sale of
energy from the organized wholesale electric markets to an electric
storage resource that the resource then resells back to those markets
must be at the wholesale LMP.
---------------------------------------------------------------------------
\184\ See Norton Energy Storage, L.L.C., 95 FERC ] 61,476, at
62,701-02 (2001) (citations omitted) (``[T]he use of compressed air
as a medium for the storage of energy in an energy storage facility
is a new technology. However, we find that a compressed air energy
storage facility is analogous to a pumped storage hydroelectric
facility, in that compressed air is used in a conversion/storage
cycle just as water is used in a pumped storage hydroelectric
facility in the conversion/storage cycle. . . . [T]he Commission
views the pumping energy not as being consumed, but rather as being
converted and stored, as water in the upper reservoir, for later re-
conversion . . . back to electric energy. It is this conversion/
storage cycle that distinguishes energy storage facilities, whether
pumped storage hydroelectric facilities or compressed air energy
storage facilities, from facilities that consume electricity (in the
form of station power or otherwise). The fact that pumping energy or
compression energy is not consumed means that the provision of such
energy is not a sale for end use that this Commission cannot
regulate. Rather, based on Norton's representations in its petition,
we find that deliveries of compression energy to the Norton energy
storage facility as part of energy exchange transactions employing
the conversion/storage cycle are wholesale transactions subject to
our exclusive authority under the FPA.''). See also PJM
Interconnection, L.L.C., 132 FERC at 62,053 (``Like pumping energy
and compression energy, the energy used to charge Energy Storage
Resources will be stored for later delivery and not used for
operating the electric equipment on the site of a generation
facility or associated buildings as Station Power is used.'').
---------------------------------------------------------------------------
101. The proposed clarification also provides developers and
operators of electric storage resources certainty about the price that
they will be charged for purchasing charging electricity in the
organized wholesale electric markets when they will use that
electricity to provide wholesale services. We note that this proposed
clarification is consistent with most current RTO/ISO practices as
reflected in their responses.
102. We recognize SoCal Edison's concern that behind-the-meter
electric storage resources should not be allowed to charge at a
wholesale rate and discharge to serve a retail customer as a means for
the retail customer to avoid paying the retail rate. This situation
could be even more complex if the retail customer in question also uses
a behind-the-meter generator in conjunction with its storage device.
Given the comments in the record indicating that metering and
accounting practices can be designed to delineate between
[[Page 86539]]
wholesale and retail activities,\185\ we seek comment on whether such
metering and accounting practices would need to be established in the
RTO/ISO tariffs to facilitate compliance with this proposal or whether
it is possible to determine the end use for energy used to charge an
electric storage resource under existing requirements.
---------------------------------------------------------------------------
\185\ Independent Energy Producers Association Comments, Att. at
7; Minnesota Energy Storage Alliance Comments at 5.
---------------------------------------------------------------------------
B. Participation of Distributed Energy Resource Aggregators in the
Organized Wholesale Electric Markets
1. Introduction
103. There has been significant industry attention paid to the
development of distributed energy resources and the potential for such
resources to contribute to grid services. More recently, the discussion
has focused on new distributed energy resources that are smaller,
interconnected to lower voltage networks, and geographically dispersed.
These new distributed energy resources are enabled by increasing
deployment of and improvements in metering, telemetry, and
communication technologies. With such advances, more localized power
and energy services and more supply resources and potential market
participants have emerged. We are interested in removing barriers in
current RTO/ISO market rules that would prevent these new, smaller
distributed energy resources that are technically capable of
participating in the organized wholesale electric markets from doing
so.
104. As noted above, in this NOPR, we define distributed energy
resources as a source or sink of power that is located on the
distribution system, any subsystem thereof, or behind a customer
meter.\186\ These resources may include, but are not limited to,
electric storage resources, distributed generation, thermal storage,
and electric vehicles and their supply equipment.\187\
---------------------------------------------------------------------------
\186\ See supra note 2.
\187\ Id.
---------------------------------------------------------------------------
105. As a general matter, distributed energy resources tend to be
too small to participate directly in the organized wholesale electric
markets on a stand-alone basis. First, they often do not meet the
minimum size requirements to participate in these markets under
existing participation models. Second, they may have difficulty
satisfying all of the operational performance requirements of the
various participation models due to their small size. Allowing these
resources to participate in the organized wholesale electric markets
through distributed energy resource aggregations can help to remove
these barriers to their participation, providing a means for these
resources to, in the aggregate, satisfy minimum size and performance
requirements that they could not meet on a stand-alone basis.
106. The Commission recently accepted CAISO's proposal \188\ to
allow distributed energy resource aggregations in its markets. In
addition, the RTOs/ISOs have implemented some models for aggregated
resources to participate in their organized wholesale electric markets.
These are described in more detail below but are generally for demand
response resources, with a few exceptions. As a result, the majority of
distribution-connected electric storage and other distributed energy
resources that seek to access the organized wholesale electric markets
must do so by participating as behind-the-meter demand response. While
these demand response programs have helped reduce barriers to load
curtailment resources, they often limit the operations of other types
of distributed energy resources, such as electric storage or
distributed generation, as well as the services that they are eligible
to provide.
---------------------------------------------------------------------------
\188\ See California Indep. Sys. Operator Corp., 155 FERC ]
61,229.
---------------------------------------------------------------------------
2. Current Rules
107. The RTOs/ISOs describe the opportunities for electric storage
resources connected to the distribution system and electric storage
resource aggregations to participate in their capacity, energy, and
ancillary service markets. CAISO supports the aggregation of
distributed energy resources, including storage, seeking to participate
in the CAISO markets.\189\ In addition, CAISO states that electric
storage resources that wish to aggregate into a resource that can
participate in the wholesale markets can participate by providing load
curtailment as Proxy Demand Resources or Reliability Demand Response
Resources.\190\
---------------------------------------------------------------------------
\189\ CAISO Response at 2-3. See also California Indep. Sys.
Operator Corp., 155 FERC ] 61,229.
\190\ CAISO Response at 7.
---------------------------------------------------------------------------
108. ISO-NE explains that, under each participation model, a single
resource may be composed of multiple resources if those resources are
either physically in the same location or require coordinated
control.\191\ ISO-NE explains that Alternative Technology Regulation
Resources may include aggregations of multiple end-use customers, each
with less than 1 MW of regulation capacity.\192\ ISO-NE adds that Asset
Related Demands may be aggregated if they are served by the same point
of electrical connection and meet a 1 MW threshold.\193\
---------------------------------------------------------------------------
\191\ ISO-NE Response at 26 (citing ISO-NE Operating Procedure
14, section II.A).
\192\ Id. (citing ISO-NE Tariff, section III.14.2(c)).
\193\ Id. at 27 (citing ISO-NE Operating Procedure 14, section
I.2.2).
---------------------------------------------------------------------------
109. ISO-NE states that electric storage resources that meet its
definition of Distributed Generation (i.e., behind-the-meter resources
with an aggregate nameplate capacity of less than 5 MW or the demand of
the end-use customer, whichever is greater) may qualify as Real-Time
Demand Response Assets, which allows for participation in the forward
capacity market, the transitional price-responsive demand program, and
the regulation market if it is also registered as an Alternative
Technology Regulation Resource.\194\ ISO-NE explains that, for the
capacity market, demand resources may consist of an aggregation of
multiple end-use customers, though they must be at least 100 kW and
located within a dispatch zone or load zone as required under the
participation model through which they are participating.\195\ ISO-NE
further explains that for the energy and reserve markets, demand
response resources may also be aggregated as long as they are
individually at least 10 kW, have an expected maximum interruptible
capacity of 5 MW or less, and are located within a dispatch zone and
reserve zone.\196\
---------------------------------------------------------------------------
\194\ Id. at 6-7.
\195\ Id. at 27 (citing ISO-NE Operating Procedure 14, section
III.13.1.4.1).
\196\ Id. (citing ISO-NE Operating Procedure 14, section
III.E2.1.1).
---------------------------------------------------------------------------
110. MISO states that Stored Energy Resources and Demand Response
Resources--Type II are allowed to aggregate under a single elemental
pricing node. MISO adds that Demand Response Resources--Type I and Load
Modifying Resources are allowed to aggregate within one local balancing
authority.\197\
---------------------------------------------------------------------------
\197\ MISO Response at 15.
---------------------------------------------------------------------------
111. NYISO states that aggregated resources can participate in the
Emergency Demand Response Program, Day-Ahead Demand Response Program,
Demand Side Ancillary Services Program, and Special Case Resource
Programs. NYISO notes that aggregated electric storage resources may be
used to generate demand reductions in any of those programs.\198\
---------------------------------------------------------------------------
\198\ NYISO Response at 13.
---------------------------------------------------------------------------
112. PJM states that aggregated electric storage resources can
participate in the capacity, energy, and ancillary service markets. In
the capacity market, PJM states that demand-side resources
[[Page 86540]]
can be aggregated to provide load reductions.\199\ Under PJM's capacity
performance proposal, electric storage resources are eligible to
aggregate with other electric storage resources, Intermittent
Resources, Demand Resources, Energy Efficiency Resources, and
Environmentally-Limited Resources to provide capacity.\200\ In the PJM
regulation market, PJM states that all resources, including electric
storage resources, may elect to be part of a performance group for the
purpose of improving their overall performance score.\201\ In the PJM
energy market, PJM adds that multiple batteries located behind a single
node and owned by the same entity would be eligible to offer into the
energy market as one resource.\202\
---------------------------------------------------------------------------
\199\ PJM Response at 20 (citing PJM Tariff, Attachment DD,
sections 11, 11A).
\200\ Id. (citing PJM Tariff, Attachment DD, section 5.6.1(h)).
\201\ Id. at 20-21 (citing PJM Manual 12, section 4.5.7).
\202\ Id. at 21.
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113. SPP states that resources at the same point of injection may
register at the unit or plant level and electric storage resources may
be aggregated if the resources are electrically equivalent from the
transmission system perspective (i.e., use the same point of
injection).\203\
---------------------------------------------------------------------------
\203\ SPP Response at 7.
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3. Comments
114. Many commenters note that it is important for distributed
energy resources to be allowed to fully participate in organized
wholesale electric markets. For example, Advanced Energy Economy
contends that, absent legitimate technical needs, distributed energy
resources should be allowed to fully participate in organized wholesale
electric markets.\204\ Advanced Energy Economy claims that certain
RTOs/ISOs have excluded these resources through artificial
classifications (e.g., the inability of multiple behind-the-meter
generation and electric storage resources to provide frequency
regulation in PJM). Similarly, SolarCity asks the Commission to require
RTOs/ISOs to revise or implement rules to ensure that behind-the-meter
resources, including electric storage resources, have a clear path for
participation in all wholesale energy markets.\205\
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\204\ Advanced Energy Economy Comments at 16-18.
\205\ SolarCity Comments at 4.
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115. Energy Storage Association agrees that distribution-connected
electric storage resources, including aggregation across multiple
storage assets and sites, should be able to participate in the
organized wholesale electric markets to enhance competition needed for
just and reasonable rates.\206\ Energy Storage Association asks the
Commission to consider extending the best practices learned in CAISO to
all organized wholesale electric markets to address common barriers in
metering, telemetry, and resource eligibility. RES Americas supports
Energy Storage Association's comments and encourages the Commission to
investigate the barriers to the participation of distributed energy
resources in organized wholesale electric markets.\207\ NY Battery and
Energy Storage Consortium argues that behind-the-meter energy storage
resources should be able to participate in organized wholesale electric
markets directly or in aggregate form, and points out that behind-the-
meter storage participating in NYISO as a demand side ancillary
services program resource is not allowed to bid into the day-ahead
demand response market, even though it is technically capable of doing
so.\208\
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\206\ Energy Storage Association Comments at 30 (citing
California Indep. Sys. Operator Corp., 155 FERC ] 61,229).
\207\ RES Americas Comments at 4-5.
\208\ NY Battery and Energy Storage Consortium Comments at 6.
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116. Some commenters cite the inability for distributed energy
resources to inject energy when participating as demand response as a
barrier to distributed energy resources. SolarCity states that this
inability hinders the ability of behind-the-meter resources to provide
energy services and limits their capacity.\209\ Advanced Energy Economy
and Solar Grid Storage argue that PJM's restriction on the injection of
energy past a customer's retail meter during operations for providing
ancillary services in its markets is a barrier to electric storage
resources.\210\ Energy Storage Association and NextEra argue that no
RTO/ISO allows behind-the-meter storage to net inject power to provide
wholesale generator services.\211\ NextEra agrees that this prohibition
effectively limits the size of electric storage resources designed for
customer applications. Energy Storage Association notes that NYISO
recently received the Commission's conditional acceptance of its
behind-the-meter net generator enhancement, but Energy Storage
Association asserts that it still effectively excludes participation of
electric storage resources because it does not include electric storage
functionality (e.g., state of charge management).\212\
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\209\ SolarCity Comments at 4.
\210\ Advanced Energy Economy Comments at 16-17; Solar Grid
Storage Comments at 2.
\211\ Energy Storage Association Comments at 29; NextEra
Comments at 12.
\212\ Energy Storage Association Comments at 29-30.
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117. Other comments focus on the benefits of allowing distributed
energy resources to participate in the organized wholesale markets as
aggregations. RES Americas contends that aggregation of electric
storage resources, either within the asset class or across other
resources that can be limited in their ability to offer a breadth of
market products (i.e., renewables or demand response), could be a means
to realize market efficiencies and other policy objectives without
creating entirely new market products or otherwise disrupting grid
operations.\213\ Electric Vehicle R&D Group states that third-party
aggregators are the most practical approach to utilizing distributed
electric storage resources connected to the low- and medium-voltage
system.\214\ Electric Vehicle R&D Group argues that, given the value
that distributed electric storage resources provide to both
transmission and distribution system operators and the lack of
technical abilities of a distribution system operator to-date to build,
qualify, and cost-effectively operate a distributed storage system
aggregator, rules should not prohibit third-party aggregators or
require distribution operators to manage them. Electric Vehicle R&D
Group adds that the Commission should allow third-party aggregators to
provide service to both RTOs and distribution system operators.
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\213\ RES Americas Comments at 5.
\214\ Electric Vehicle R&D Group Comments at 2.
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118. National Electrical Manufacturers Association states that
organized wholesale electric markets should accommodate aggregated
electric storage resources, including electric storage resources
installed behind-the-meter, without imposing excessive requirements
that would preclude the participation of smaller resources (e.g.,
arduous study processes and/or expensive data telemetry
requirements).\215\ Similarly, NY Battery and Energy Storage Consortium
argues that NYISO should avoid creating metering and telemetry
requirements with prohibitively high transaction costs and imposing
undue burdens on behind-the-meter storage participation.\216\ Energy
Storage Association agrees that metering and telemetry requirements and
[[Page 86541]]
interconnection processes can pose prohibitively high transaction costs
for the small project sizes that characterize behind-the-meter electric
storage resources, creating undue burdens on their participation in
most RTOs/ISOs.\217\
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\215\ National Electrical Manufacturers Association Comments at
5.
\216\ NY Battery and Energy Storage Consortium Comments at 6.
\217\ Energy Storage Association Comments at 29.
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119. Similarly, California Energy Storage Alliance claims that the
overhead costs of registering individual resources within an
aggregation can be burdensome and costly.\218\ Specifically, California
Energy Storage Alliance argues that the registration of individual
customer sites with load-serving entities, the California Public
Utilities Commission, and CAISO can impose significant costs that
discourage participation as proxy demand response and other wholesale
market resources. California Energy Storage Alliance asserts that a
separate administrative process under a behind-the-meter electric
storage resource-specific model, or a streamlined version under
existing constructs, could reduce these administrative costs by
standardizing forms and processes across all individual resources and
allowing the submission of a single application.
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\218\ California Energy Storage Alliance Comments at 7.
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120. Some commenters identify problems with opportunities for
aggregations in the RTOs/ISOs. Energy Storage Association is concerned
that aggregated distributed energy resources are not permitted to offer
into some RTO/ISO markets, while it is not clear how they can offer
into others.\219\ Energy Storage Association claims that market rules
present barriers to aggregation (particularly minimum size
requirements) because they are often designed around individual sites
as a resource, rather than the capabilities of an aggregated set of
sites.\220\ NextEra asserts that, to enable aggregators to participate
effectively in the organized wholesale electric markets, more work is
needed by the RTOs/ISOs, like the recent CAISO initiative that led to
new aggregation opportunities for small distributed resources.\221\
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\219\ Energy Storage Association Comments at 29 (citing ISO-NE
Response at 26; NYISO Response at 13).
\220\ Id. at 27-28.
\221\ NextEra Comments at 12-13 (citing California Indep. Sys.
Operator Corp., 155 FERC ] 61,229 at P 60).
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121. Public Interest Organizations agree that the opportunity to
aggregate distributed energy resources could help mitigate minimum size
or duration requirements, but state that this opportunity is lacking or
unclear in some RTOs/ISOs.\222\ NY Battery and Energy Storage
Consortium and NY Transmission Owners point out that NYISO rules do not
allow smaller resources with a capacity less than 1 MW to aggregate and
provide generation above their host loads, though they can participate
as an aggregated demand response resource.\223\ Similarly, Minnesota
Energy Storage Alliance states that MISO's market rules prevent robust
participation of distributed electric storage resources in its energy
and ancillary service markets because they do not permit the
aggregation of these resources to meet the 5 MW minimum capacity
requirement for a Demand Response Resource.\224\
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\222\ Public Interest Organizations Comments at 5.
\223\ NY Battery and Energy Storage Consortium Comments at 6; NY
Transmission Owners Comments at 3 (citing NYISO Installed Capacity
Manual at 108, 110).
\224\ Minnesota Energy Storage Alliance Comments at 4.
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122. Solar Grid Storage states that, while PJM's 100 kW minimum
size requirement to participate in its ancillary service markets allows
electric storage resources to aggregate their dispatch, aggregated
resources must be part of a ``performance group'' in the same
location.\225\ Solar Grid Storage asserts that, because some ancillary
services like frequency regulation are not site specific and can be
provided with equal value to PJM over vastly different areas within the
ISO, this locational restriction is unreasonable.
---------------------------------------------------------------------------
\225\ Solar Grid Storage Comments at 4.
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123. Some commenters stress the need to ensure that grid
reliability concerns are addressed in rules governing behind-the-meter
resources, including aggregations of such resources. EEI states that,
because behind-the-meter resources are interconnected to the
distribution grid and ultimately impact the transmission system, EEI
members are interested in ensuring that any actions the RTOs/ISOs take
to allow these resources, including aggregated resources, to
participate in the organized wholesale electric markets do not
negatively affect the electric distribution company's ability to
maintain the reliability of the distribution system.\226\ EEI claims
that electric distribution utilities need to have visibility and input/
control of the resources that are integrated to the distribution system
for planning and operating purposes. SoCal Edison states that safety
and reliability needs must take precedence over wholesale market
dispatch and asks the Commission to consider the safe and reliable
operation of the distribution system as a key principle when addressing
the participation of distribution system-connected electric storage
resources in the organized wholesale electric markets.\227\
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\226\ EEI Comments at 5.
\227\ SoCal Edison Comments at 2, 5-6.
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4. Proposed Reforms
124. We are interested in removing barriers in current RTO/ISO
market rules that would prevent these new, smaller distributed energy
resources that are technically capable of participating in the
organized wholesale electric markets from doing so. It is clear from
the comments that the ability to meaningfully participate in the
organized wholesale electric markets for these smaller distributed
energy resources is through aggregations. Thus, we propose to require
each RTO/ISO to revise its tariff as necessary to allow distributed
energy resource aggregators to offer to sell capacity, energy, and
ancillary services in the organized wholesale electric markets.
Specifically, we propose to require each RTO/ISO to revise its tariff
to define distributed energy resource aggregators as a type of market
participant that can participate in the organized wholesale electric
markets under the participation model that best accommodates the
physical and operational characteristics of its distributed energy
resource aggregation. This proposal is similar to CAISO's market rules
that establish a distributed energy resource provider as a new type of
market participant.\228\ Our proposal would expand the types of
resources that are eligible to participate in the organized wholesale
electric markets through aggregators and require the RTOs/ISOs to
remove any unnecessary limitations on how the distributed energy
resources that participate in such aggregations must be operated.
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\228\ See, e.g., California Indep. Sys. Operator Corp., 155 FERC
] 61,229 at PP 3-7.
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125. Distributed energy resources may be unable or unwilling to
participate in the organized wholesale electric markets absent the
opportunity to participate as part of a distributed energy resource
aggregation. Distributed energy resources are generally smaller than
other resources connected to the grid and therefore may be unable to
meet all of the qualification or performance requirements for
participation in the organized wholesale electric markets.
Specifically, they may be too small to satisfy minimum size
requirements on a stand-alone basis and, as small resources, may face
operational constraints that prevent them from satisfying minimum
performance
[[Page 86542]]
requirements.\229\ However, if these distributed energy resources were
permitted to aggregate with other distributed energy resources to
participate in the organized wholesale electric markets, they may be
able to, in the aggregate, meet any minimum size and performance
requirements, particularly if the operational characteristics of
different distributed energy resources in a given distributed energy
resource aggregation complement each other.
---------------------------------------------------------------------------
\229\ For example, combining the discharge times of multiple
electric storage resources and/or combining them with distributed
generation resources could allow aggregated resources to meet
minimum run-time requirements that individual electric storage
resources may not be able to meet.
---------------------------------------------------------------------------
126. Distributed energy resource aggregations will also help to
address the commercial and transactional barriers to distributed energy
resource participation in the organized wholesale electric markets.
Owners and operators of individual distributed energy resources may be
reluctant to incur the significant costs of participating in the
organized wholesale electric markets, such as the costs of the
necessary metering, telemetry and communication equipment. The smaller
a resource is, the more likely the transaction costs to sell services
into the organized wholesale electric markets outweigh the benefits
that the prospective market participant may realize from selling
wholesale services. However, some of these costs can be reduced by
participating in the organized wholesale electric markets through a
distributed energy resource aggregation, for example the time and
resources necessary to learn the market rules and actively submit bids
and/or offers into the organized wholesale electric markets.
127. We also believe that some of the restrictions placed on
aggregators in the RTOs/ISOs, such as the types of resources that can
participate in those aggregations and the inability to inject energy
onto the grid, may limit the operation and effectiveness of existing
RTO/ISO programs for aggregations. Therefore, as discussed further
below, we propose to expand the types of distributed energy resources
that are eligible to participate in the organized wholesale electric
markets through aggregators and require RTOs/ISOs to remove any
unnecessary limitations on how the distributed energy resources that
participate in such aggregations must be operated.
128. Our proposal requires the RTOs/ISOs to define distributed
energy resource aggregators as a type of market participant that can
participate in the organized wholesale electric markets under the
participation model that best accommodates the physical and operational
characteristics of its distributed energy resource aggregation. This
proposed requirement means that the distributed energy resource
aggregator would register as, for example, a generation asset if that
is the participation model that best reflects its physical
characteristics. While we expect efficiencies to be gained by allowing
distributed energy resources aggregations to participate under existing
participation models, we also acknowledge that the use of existing
participation models may not be possible in every RTO/ISO based on how
market participation is structured. However, where this is possible, we
emphasize that the distributed energy resource aggregation must still
satisfy any eligibility requirements of the applicable participation
model before it can participate in the organized wholesale electric
markets under that participation model. Therefore, to accommodate the
participation of distributed energy resource aggregations under the
various participation models, we propose that each RTO/ISO modify the
eligibility requirements for existing participation models as necessary
to allow for the participation of distributed energy resource
aggregators.
129. The costs of distributed energy resources have decreased
significantly,\230\ which when paired with alternative revenue streams
and innovative financing solutions, is increasing these resources'
potential to compete in and deliver value to the organized wholesale
electric markets. Moreover, integrating these resources' capabilities
into the organized wholesale electric markets will help the RTOs/ISOs
to account for their impacts on installed capacity requirements and
day-ahead energy demand, thereby reducing uncertainty in load forecasts
and reducing the risk of over procurement of resources and the
associated costs.
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\230\ See, e.g., Revolution . . . No, The Future Arrives for
Five Clean Energy Technologies, 2016 Update, at 1; and Tracking the
Sun VIII, Lawrence Berkeley National Lab, at 15 (Aug. 2015).
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130. We believe that our proposal will provide numerous
supplementary benefits to the RTO/ISO systems. For example, by removing
barriers to the participation of distributed energy resources in
organized wholesale electric markets through aggregators, these
resources may locate where price signals indicate that new capacity is
most needed, potentially helping to alleviate congestion and congestion
costs during peak load conditions and to reduce transmission investment
costs for transmitting energy into persistently high-priced load
pockets. Moreover, unlike larger fossil fuel generators that often are
not able to locate in load pockets due to environmental or other citing
concerns, distributed energy resources are more able to co-locate with
load and provide associated benefits. We also believe that the shorter
lead time to develop many forms of distributed energy resources
compared to traditional generators or transmission lines allows them to
rapidly respond to near-term generation or transmission reliability-
related requirements, further improving their ability to enhance
reliability and reduce system costs.
131. Additionally, we agree with the comments of Advanced Energy
Economy and Public Interest Organizations that electric storage
resources and other resources connected to the distribution system
should be able to participate in all of the organized wholesale
electric markets in which they are technically capable of participating
and that barriers that unnecessarily prevent distributed energy
resources from providing certain services may be caused by market rules
that are unduly discriminatory. The most commonly cited example of
these barriers to participation in the comments we received are market
rules that relegate electric storage resources, particularly behind-
the-meter electric storage resources, to market participation using
demand response programs. We agree with commenters that existing RTO/
ISO demand response programs may restrict the ability of electric
storage and other distributed energy resources from providing the full
suite of services that they are capable of providing, and therefore
propose this alternative path for distributed energy resources to
access the organized wholesale electric markets.
132. As such, we propose to require each RTO/ISO to revise its
tariff to allow distributed energy resource aggregators to participate
directly in the organized wholesale electric markets and to establish
market rules to accommodate the participation of distributed energy
resource aggregations, consistent with the following:
a. Eligibility to participate in the organized wholesale electric
markets through a distributed energy resource aggregator;
b. Locational requirements for distributed energy resource
aggregations;
c. Distribution factors and bidding parameters for distributed
energy resource aggregations;
[[Page 86543]]
d. Information and data requirements for distributed energy
resource aggregations;
e. Modifications to the list of resources in a distributed energy
resource aggregation;
f. Metering and telemetry system requirements for distributed
energy resource aggregations;
g. Coordination between the RTO/ISO, the distributed energy
resource aggregator, and the distribution utility; and
h. Market participation agreements for distributed energy resource
aggregators.
a. Eligibility To Participate in the Organized Wholesale Electric
Markets Through a Distributed Energy Resource Aggregator
133. We preliminarily find that limiting the types of technologies
that are allowed to participate in the organized wholesale electric
markets through distributed energy resource aggregator would create a
barrier to entry for emerging or future technologies, potentially
precluding them from being eligible to provide all of the capacity,
energy and ancillary services that they are technically capable of
providing. While some individual resources or certain technologies may
not be able to meet the qualification or performance requirements to
provide services to the organized wholesale electric markets on their
own, they may satisfy such requirements as part of a distributed energy
resource aggregation where resources complement one another's
capabilities.\231\ To help ensure that the market rules that the RTOs/
ISOs develop to comply with any Final Rule issued in this proceeding
are sufficiently flexible to accommodate the participation of new
distributed energy resources as technology continues to evolve and to
acknowledge the potential for distributed energy resources to satisfy
qualification or performance requirements through a distributed energy
resource aggregator, we propose that each RTO/ISO revise its tariff so
that it does not prohibit the participation of any particular type of
technology in the organized wholesale electric markets through a
distributed energy resource aggregator. However, to the extent existing
rules or regulations explicitly prohibit certain technologies from
participating in the organized wholesale electric markets, we do not
intend to overturn those rules or regulations.
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\231\ Combining electric storage resources with distributed
generation could allow the aggregate resource to achieve performance
requirements (such as minimum run times) that an electric storage
resource could not meet on its own and provide services (such as
regulation) that distributed generation may not be able to provide
on its own.
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134. We also propose that it is appropriate for each RTO/ISO to
limit the participation of resources in the organized wholesale
electric markets through a distributed energy resource aggregator that
are receiving compensation for the same services as part of another
program. Since resources able to register as part of a distributed
energy resources aggregation will be located on the distribution
system, they may also be eligible to participate in retail compensation
programs, such as net metering, or other wholesale programs, such as
demand response programs. Therefore, to ensure that there is no
duplication of compensation, we propose that distributed energy
resources that are participating in one or more retail compensation
programs such as net metering or another wholesale market participation
program will not be eligible to participate in the organized wholesale
electric markets as part of a distributed energy resource aggregation.
135. With respect to the capacity of the individual distributed
energy resources that can participate in the wholesale electric markets
through a distributed energy resource aggregator, we propose not to
establish a minimum or maximum capacity requirement. We believe
participation in the organized wholesale electric markets through a
distributed energy resource aggregator should not be conditioned on the
size of the resource, but we recognize that existing organized
wholesale electric market rules may require resources to meet certain
minimum or maximum capacity requirements under certain participation
models. Therefore, we seek comment on whether we should establish a
minimum or maximum capacity limit for individual resources seeking to
participate in the organized wholesale electric markets through a
distributed energy resource aggregator, or whether we should allow each
RTO/ISO to propose such a minimum or maximum capacity requirement on
compliance with any Final Rule issued in this rulemaking proceeding. To
the extent that commenters think that we should adopt a minimum or
maximum capacity requirement for individual distributed energy
resources participating in the organized wholesale markets through a
distributed energy resource aggregator, we seek comment on what that
requirement should be.
136. With respect to the size of the distributed energy resource
aggregations themselves, we propose that these aggregations meet any
minimum size requirements of the participation model under which they
elect to participate in the organized wholesale electric markets. For
example, if a distributed energy resource aggregator decides to
register using the participation model for electric storage resources
proposed above given the cumulative physical and operational
characteristics of the distributed energy resources in its aggregation,
then its distributed energy resource aggregation would be required to
meet the 100 kW minimum size requirement we propose for that
participation model. Alternatively, if the distributed energy resource
aggregator decides to register as a generator, then its aggregation
would be required to meet the minimum size requirement for the
generator participation model in the relevant RTO/ISO market. We seek
comment on this proposal to require distributed energy resource
aggregations to meet the minimum size requirements of the participation
model that they use to participate in the organized wholesale electric
markets.
137. Consistent with Order No. 719, we also propose that each RTO/
ISO revise its tariff to allow a single qualifying distributed energy
resource to avail itself of the proposed distributed energy resource
aggregation rules by serving as its own distributed energy resource
aggregator.\232\
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\232\ See Order No. 719, FERC Stats. & Regs. ] 31,281 at P
158(d) (``An [aggregator of retail customers] can bid demand
response either on behalf of only one retail customer or multiple
retail customers.'').
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b. Locational Requirements for Distributed Energy Resource Aggregations
138. Some RTO/ISO market rules permit only those resources that are
located behind the same point of interconnection or at a single pricing
node to aggregate. These limitations could be the result of several
concerns. For instance, an RTO/ISO may be concerned that geographically
dispersed resources participating in the organized wholesale electric
markets through a distributed energy resource aggregation may
exacerbate a transmission constraint or otherwise cause a reliability
concern if dispatched as a single resource by the RTO/ISO. Similarly,
an RTO/ISO may be concerned about price formation for services with
geographically specific prices if geographically dispersed resources
participating in the organized wholesale electric markets through a
distributed energy resource aggregation were dispatched as a single
resource by the RTO/ISO. That said, we are concerned that some existing
[[Page 86544]]
requirements for aggregations to be located behind a single point of
interconnection or pricing node may be overly stringent and may
unnecessarily restrict the opportunities for distributed energy
resources to participate in the organized wholesale electric markets
through a distributed energy resource aggregator. We also note that
recent improvements in metering, telemetry, and communication
technology should facilitate better situational awareness and enable
management of geographically disperse distributed energy resource
aggregations, potentially rendering such restrictive locational
requirements unnecessary.
139. Therefore, we propose to require each RTO/ISO to revise its
tariff to establish locational requirements for distributed energy
resources to participate in a distributed energy resource aggregation
that are as geographically broad as technically feasible. Our proposal
would give each RTO/ISO flexibility to adopt locational requirements
that both allow for the participation of geographically disperse
distributed energy resources in the organized wholesale electric
markets through a distributed energy resource aggregation, where
technically feasible, and account for the modeling and dispatch of the
RTO's/ISO's transmission system. We further acknowledge that the
appropriate locational requirements may differ based on the services
that a distributed energy resource aggregator seeks to provide (e.g.,
the locational requirements for participation in the day-ahead energy
market may differ from those for participation in the ancillary service
markets).
140. To the extent that commenters would prefer that we require the
RTOs/ISOs to adopt consistent locational requirements, we seek further
comment on what locational requirements we could require each RTO/ISO
to adopt that would allow distributed energy resources to be aggregated
as widely as possible without threatening the reliability of the
transmission grid or the efficiency of the organized wholesale electric
markets. We note that, in some RTOs/ISOs and for some services, the
only geographic limitations imposed on distributed energy resource
aggregations are by zone or due to modeled transmission
constraints.\233\
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\233\ See, e.g., CAISO Tariff, Att. A, section 4.17.3 (e)
(``Each Distributed Energy Resource Aggregation must be located in a
single Sub-LAP.''). CAISO defines a sub-LAP as a subset of pricing
nodes within a default load aggregation point. See CAISO Tariff,
Appendix A, Master Definitions and Supplement. See also NYISO Market
Administration and Control Area Service Tariff, section 2.4
(Definitions-D) (``Demand Side Ancillary Service Program Resource
(DSASP Resource): A Demand Side Resource or an aggregation of Demand
Side Resources located in the [New York Control Area (NYCA)] with at
least 1 MW of load reduction that is represented by a point
identifier (PTID) and is assigned to a Load Zone or Subzone by the
ISO . . . .''); NYISO Day-Ahead Demand Response Program Manual at
2.16.4 (``A process and procedures will be drawn to . . . set limits
to aggregation projects by zone, provider, program, or any other
category.'').
---------------------------------------------------------------------------
141. We seek comment on potential concerns about dispatch, pricing,
or settlement that the RTOs/ISOs must address if the distributed energy
resources in a particular distributed energy resource aggregation are
not limited to the same pricing node or behind the same point of
interconnection. We also note that, as discussed in Section III.B.4.g,
we propose to allow the relevant distribution utility or utilities to
review the list of distributed energy resources in a distributed energy
resource aggregation, which will also help ensure that dispatch of the
aggregated distributed energy resources as a single resource will not
cause any reliability concerns.
c. Distribution Factors and Bidding Parameters for Distributed Energy
Resource Aggregations
142. RTOs/ISOs need to know which resources in a distributed energy
resource aggregation will be responding to their dispatch signals and
where those resources are located. This information is particularly
important if the resources in a distributed energy resource aggregation
are located across multiple points of interconnection, multiple
transmission or distribution lines, or multiples nodes on the grid.
143. We, therefore, propose that the market rules governing
distributed energy resource aggregations allow the RTOs/ISOs to require
sufficient information from the resources in a distributed energy
resource aggregation to reliably operate their systems. Specifically,
we propose to require each RTO/ISO to revise its tariff to include the
requirement that distributed energy resource aggregators (1) provide
default distribution factors \234\ when they register their distributed
energy resource aggregation and (2) update those distribution factors
if necessary when they submit offers to sell or bids to buy into the
organized wholesale electric markets. In turn, we propose to require
each RTO/ISO to revise the bidding parameters for each participation
model in its tariff to allow distributed energy resource aggregators to
update their distribution factors when participating in the organized
wholesale electric markets. In addition to comments on this proposal,
we seek comment on alternative approaches that may provide the RTOs/
ISOs with the information from geographically or electrically disperse
resources in a distributed energy resource aggregation necessary to
reliably operate their systems.
---------------------------------------------------------------------------
\234\ For purposes of this NOPR, distribution factors indicate
how much of the total response from a distributed energy resource
aggregation would be coming from each pricing node at which one or
more resources participating in the aggregation are located.
---------------------------------------------------------------------------
144. Moreover, we preliminarily find that the bidding parameters
for each participation model in the RTO/ISO tariffs may have to account
for the physical and operational characteristics of distributed energy
resource aggregations. Therefore, we seek comment on whether bidding
parameters in addition to those already incorporated into existing
participation models may be necessary to adequately characterize the
physical or operational characteristics of distributed energy resource
aggregations.
d. Information and Data Requirements for Distributed Energy Resource
Aggregations
145. The RTOs/ISOs need sufficient information about the
distributed energy resource aggregation and the individual resources in
a distributed energy resource aggregation to effectively model,
dispatch, and settle the aggregation. We preliminarily find that the
information and data requirements that apply to distributed energy
resource aggregations must not pose barriers to the participation of
small distributed energy resources or distributed energy resources
relying on any specific technology in the organized wholesale electric
markets through a distributed energy resource aggregator. We refer to
information and data requirements as the information that the
distributed energy resource aggregator is required to provide to the
RTO/ISO when the distributed energy resource aggregator and its list of
resources register as a market participant as well as the information
and data necessary for settlement and auditing purposes. In this NOPR,
we seek to balance the information needs of RTOs/ISOs with information
requirements so burdensome that they could limit the benefit of these
proposed changes. The RTO/ISO will require certain information for the
distributed energy resource aggregation as a whole, as well as the
individual resources in the aggregation. While some of this information
may be replicated in bidding parameters, we propose that the
distributed energy resource aggregator
[[Page 86545]]
initially provide to the RTO/ISO a description of the physical
parameters of the distributed energy resource aggregation, including
(1) the total capacity; (2) the minimum and maximum operating limits;
(3) the ramp rate; (4) the minimum run time; and (5) the default
distribution factors, if applicable. We propose to require each RTO/ISO
to revise its tariff to require distributed energy resource aggregators
to provide the RTO/ISO with a list of the distributed energy resources
in the distributed energy resource aggregation that includes
information about each of those distributed energy resources, including
each resource's capacity, location on the distribution system, and its
operating limits.
146. Electric Vehicle R&D Group identifies PJM's requirement for
resources in a distributed energy resource aggregation to provide a
one-line diagram of the resource as too cumbersome, especially for
small resources at residential locations.\235\ Additionally, in CAISO's
distributed energy resource provider filing, CAISO declined to require
renewable generation resources in an aggregation to provide the same
meteorological data that standalone intermittent generators are
required to provide because they believed the requirement would create
an undue burden on individual distributed energy resources.\236\ We
agree that certain information requirements may be so burdensome for
individual distributed energy resources that they pose a barrier to the
participation of these distributed energy resources in the organized
wholesale electric markets through aggregations. We therefore seek
comment on whether there are information and data requirements imposed
by RTOs/ISOs that apply to other market participants that should not
apply to individual distributed energy resources participating in the
organized wholesale electric markets through a distributed energy
resource aggregation.
---------------------------------------------------------------------------
\235\ Electric Vehicle R&D Group Comments at 8-9.
\236\ See CAISO Transmittal Letter, Docket No ER16-1085-000, at
22. (Mar. 4, 2016).
---------------------------------------------------------------------------
147. We also propose to require each RTO/ISO to revise its tariff
to require distributed energy resource aggregators to maintain
aggregate settlement data for the distributed energy resource
aggregation so that the RTO/ISO can regularly settle with the
distributed energy resource aggregator for its market participation.
Finally, we propose to require distributed energy resource aggregators
to maintain data for a length of time consistent with the RTO's/ISO's
auditing requirements, for each individual resource in its distributed
energy resource aggregation so that each resource can verify its
performance if audited. We seek comment on these proposed data
requirements and on whether distributed energy resource aggregators
should be required to provide additional data to the RTO/ISO.
e. Modifications to the List of Resources in a Distributed Energy
Resource Aggregation
148. The requirements for a distributed energy resource aggregator
associated with modifications to the list of resources in a distributed
energy resource aggregation can present a barrier to the participation
of distributed energy resource aggregations in the organized wholesale
electric markets. Electric Vehicle R&D Group notes that, to modify its
distributed energy resource aggregation in PJM, it has to un-register
all resources in its aggregation and then re-run the testing protocol
for the revised aggregation to re-qualify to participate in the PJM
markets.\237\ Electric Vehicle R&D Group argues that testing every
incremental addition to an aggregation is unnecessary because they are
required to continuously report their available capacity and meter
their aggregate power response. Because the incremental impacts on the
organized wholesale electric markets of the addition or removal of
individual distributed energy resources from a distributed energy
resource aggregation will likely be minimal, and they are short lead
time resources that can be developed and built quickly, we
preliminarily conclude that they should be able to enter and exit
distributed energy resource aggregations participating in the organized
wholesale electric markets without undue burden.
---------------------------------------------------------------------------
\237\ Electric Vehicle R&D Group Comments at 9.
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149. We therefore propose that each RTO/ISO revise its tariff to
allow a distributed energy resource aggregator to modify the list of
resources in its distributed energy resource aggregation without
reregistering all of the resources if the modification will not result
in any safety or reliability concerns. We emphasize, however, pursuant
to the proposed requirements in Section III.B.4.g below, that the
relevant distribution utility or utilities must have the opportunity to
review the list of individual resources that are located on their
distribution system in a distributed energy resource aggregation before
those resources may participate in the organized wholesale electric
markets through the aggregation, so that they can assess whether the
resources would be able to respond to RTO/ISO dispatch instructions
without posing any significant risk to the distribution system.
f. Metering and Telemetry System Requirements for Distributed Energy
Resource Aggregations
150. While the distributed energy resources in an aggregation will
need to be directly metered, the metering and telemetry system, i.e.,
hardware and software, requirements RTOs/ISOs impose on distributed
energy resource aggregators and individual resources in distributed
energy resource aggregations can pose a barrier to the participation of
these aggregations in organized wholesale electric markets. We
recognize that RTOs/ISOs need metering data for settlement purposes,
and telemetry data to determine a resource's real-time operational
capabilities so that they can efficiently dispatch resources. However,
metering and telemetry systems are often expensive potentially creating
a burden for small distributed energy resources. While telemetry data
about a distributed energy resource aggregation as a whole is necessary
for the RTO/ISO to efficiently dispatch the aggregation, telemetry data
for each individual resource in the aggregation may not be.
151. While we are not proposing to prescribe specific metering and
telemetry systems for distributed energy resource aggregators, we
propose to require each RTO/ISO to revise its tariff to identify any
necessary metering and telemetry hardware and software requirements for
distributed energy resource aggregators and the individual resources in
a distributed energy resource aggregation. These requirements must
ensure that the distributed energy resource aggregator will be able to
provide the necessary information and data to the RTO/ISO discussed in
Section III.B.4.d but also not impose unnecessarily burdensome costs on
the distributed energy resource aggregators and individual resources in
a distributed energy resource aggregation that may create a barrier to
their participation in the organized wholesale electric markets. We
also note that there may be different types of resources in these
aggregations, some in front of the meter, some behind the meter with
the ability to inject energy back to the grid, and some behind the
meter without the ability to inject energy to the grid. We therefore
seek comment on whether the RTOs/ISOs need to establish metering and
telemetry hardware and software requirements for each of the different
types of distributed energy resources that participate in the
[[Page 86546]]
organized wholesale electric markets through distributed energy
resource aggregations, as well as whether we should establish specific
metering and telemetry system requirements and, if so, what
requirements would be appropriate.
152. With respect to telemetry, we believe that the distributed
energy resource aggregator should be able to provide to the RTO/ISO the
real-time capability of its resource in a manner similar to the
requirements for generators, so the RTO/ISO knows the operating level
of the resource and how much that resource can ramp up or ramp down
over its full range of capability, including its charging capability
for distributed energy resource aggregations that include electric
storage resources. These telemetry system requirements may also need to
be in place at different locations for geographically dispersed
distributed energy resource aggregations that have to provide
distribution factors or other similar factors, as discussed above. With
respect to metering, we recognize that distributed energy resources may
be subject to metering system requirements established by the
distribution utility or local regulatory authority. Therefore, we
propose that each RTO/ISO should rely on meter data obtained through
compliance with these distribution utility or local regulatory
authority metering system requirements whenever possible for settlement
and auditing purposes, only applying additional metering system
requirements for distributed energy resource aggregations when this
data is insufficient.
g. Coordination Between the RTO/ISO, the Distributed Energy Resource
Aggregator, and the Distribution Utility
153. The market rules that each RTO/ISO adopts to facilitate the
participation of distributed energy resource aggregations must address
coordination between the RTO/ISO, the distributed energy resource
aggregator, and the distribution utility to ensure that the
participation of these resources in the organized wholesale electric
markets does not present reliability or safety concerns for the
distribution or transmission system. Thus, we propose to require each
RTO/ISO to revise its tariff to provide for coordination among the RTO/
ISO, a distributed energy resource aggregator, and the relevant
distribution utilities with respect to (1) the registration of new
distributed energy resource aggregations and (2) ongoing coordination,
including operational coordination, between the RTO/ISO, a distributed
energy resource aggregator, and the relevant distribution utility or
utilities. We seek comment on the detailed proposals described below.
154. First, we propose that each RTO/ISO revise its tariff to
provide for coordination among itself, a distributed energy resource
aggregator, and the relevant distribution utility or utilities when a
distributed energy resource aggregator registers a new distributed
energy resource aggregation or modifies an existing distributed energy
resource aggregation to include new resources. The purpose of this
coordination would be to ensure that all of the individual resources in
the distributed energy resource aggregation are technically capable of
providing services to the RTO/ISO through the aggregator and are
eligible to be part of the aggregation (i.e., are not participating in
another retail or wholesale compensation program, as discussed in
Section III.B.4.a above). In addition, we propose that this
coordination provide the relevant distribution utility or utilities
with the opportunity to review the list of individual resources that
are located on their distribution system that enroll in a distributed
energy resource aggregation before those resources may participate in
the organized wholesale electric markets through the aggregation. The
opportunity for the relevant distribution utility or utilities to
review the list of these resources would allow them to assess whether
the resources would be able to respond to RTO/ISO dispatch instructions
without posing any significant risk to the distribution system and to
ensure these resources are not participating in any other retail
compensation programs. Finally, we propose that this coordination
provide the relevant distribution utility or utilities the opportunity
to report such information to the RTO/ISO for its consideration prior
to the RTO/ISO allowing the new or modified distributed energy resource
aggregation to participate in the organized wholesale electric market.
We seek comment on whether the RTO/ISO tariffs should provide for any
additional review by or coordination with other parties prior to a new
or existing distributed energy resource aggregation participating in
the organized wholesale electric markets.
155. Second, we acknowledge that ongoing coordination between the
RTO/ISO, a distributed energy resource aggregator, and the relevant
distribution utility or utilities may be necessary to ensure that the
distributed energy resource aggregator is disaggregating dispatch
signals from the RTO/ISO and dispatching individual resources in a
distributed energy resource aggregation consistent with the limitations
of the distribution system. Thus, we propose that each RTO/ISO revise
its tariff to establish a process for ongoing coordination, including
operational coordination, among itself, the distributed energy resource
aggregator, and the distribution utility to maximize the availability
of the distributed energy resource aggregation consistent with the safe
and reliable operation of the distribution system. To account for the
possibility that distribution facilities may be out of service and
impair the operation of certain individual resources in a distributed
energy resource aggregation, we also propose to require each RTO/ISO to
revise its tariff to require the distributed energy resource aggregator
to report to the RTO/ISO any changes to its offered quantity and
related distribution factors that result from distribution line faults
or outages. We seek comment on the level of detail necessary in the
RTO/ISO tariffs to establish a framework for ongoing coordination
between the RTO/ISO, a distributed energy resource aggregator, and the
relevant distribution utility or utilities. We also seek comment on any
related reliability, safety, and operational concerns and how they may
be effectively addressed.
156. Further, we seek comment on the appropriate lines of
communication to require. While it may be commercially efficient for
the distributed energy resource aggregator to have the burden of
communicating with both the RTO/ISO and the distribution utility, and
acknowledging the assumption that the distributed energy resource
aggregator will be the single point of contact with the RTO/ISO, are
there reasons (e.g., distribution operations or a distributed energy
resource aggregator's commercial interest) why this would be
insufficient communication? Does a distribution utility that serves
distributed energy resources need real-time direct communication with
the RTO/ISO, such as in the form of operating procedures or software-
enabled communications, in order to operate its distribution system, or
can that communication be organized through the distributed energy
resource aggregator? Finally, we welcome comments on how the
distributed energy resource aggregator model proposed herein would
interact with or complement the distribution system operator (DSO)
model being discussed in some states, and whether a DSO model might add
value to the distributed energy resource aggregator model in terms of
facilitating communication among affected entities?
[[Page 86547]]
h. Market Participation Agreements for Distributed Energy Resource
Aggregators
157. To ensure that a distributed energy resource aggregator
complies with all relevant provisions of the RTO/ISO tariffs, it must
execute an agreement with the RTO/ISO that defines its roles and
responsibilities and its relationship with the RTO/ISO before it can
participate in the organized wholesale electric markets. Since the
individual resources in these distributed energy resource aggregations
will likely fall under the purview of multiple organizations (e.g., the
RTO/ISO, state regulatory commissions, relevant distribution utilities,
and local regulatory authorities), these agreements must also require
that the distributed energy resource aggregator attests that its
distributed energy resource aggregation is compliant with the tariffs
and operating procedures of the distribution utilities and the rules
and regulations of any other relevant regulatory authority.\238\ We
therefore propose that each RTO/ISO revise its tariff to include a
market participation agreement for distributed energy resource
aggregators. We do not propose specific requirements for such
agreements at this time, but instead seek comment on the information
these agreements should contain.
---------------------------------------------------------------------------
\238\ This may include any laws or regulations of the relevant
retail regulatory authority that do not permit demand response
resources to participate in the RTO/ISO markets as the Commission
considered in Order No. 719. See Order No. 719, FERC Stats. & Regs.
] 31,281 at P 154.
---------------------------------------------------------------------------
158. While these agreements will define the roles and
responsibilities of the distributed energy resource aggregator, they
should not limit the business models under which distributed energy
resource aggregators can operate. Therefore, we propose that the market
participation agreement for distributed energy resource aggregators
that each RTO/ISO must include in its tariff does not restrict the
business models that distributed energy resource aggregators may adopt.
For example, while the third-party aggregator is a common business
model, the market participation agreement for distributed energy
resource aggregators should not preclude distribution utilities,
cooperatives, or municipalities from aggregating distributed energy
resources on their systems or even microgrids from participating in the
organized wholesale electric markets as a distributed energy resource
aggregation.
IV. Compliance
159. We propose to require each RTO/ISO to submit a compliance
filing to demonstrate that it satisfies the proposed requirements set
forth in the Final Rule within six months of the date the Final Rule in
this proceeding is published in the Federal Register. While we believe
that six months is sufficient for each RTO/ISO to develop and submit
its compliance filing, we recognize that implementation of the reforms
proposed herein could take more time due to the changes that may be
necessary to each RTO's/ISO's modeling and dispatch software.
Therefore, we propose to allow twelve months from the date of the
compliance filing for implementation of the proposed reforms to become
effective.
160. We seek comment on the proposed deadline for each RTO/ISO to
submit its compliance filing, as well as the proposed deadline for each
RTO's/ISO's implementation of the proposed reforms to become effective.
Specifically, we seek comment on whether the proposed compliance and
implementation timeline would allow sufficient time for each RTO/ISO to
implement changes to its technological systems and business processes
in response to a Final Rule. We also seek comment on whether the RTOs/
ISOs will require more or less time to implement certain reforms versus
others.
161. To the extent that any RTO/ISO believes that it already
complies with any of the requirements adopted in a Final Rule in this
proceeding, the RTO/ISO would be required to demonstrate how it
complies in the filing due within six months of the date any Final Rule
in this proceeding is published in the Federal Register. The proposed
implementation deadline would apply only to the extent that an RTO/ISO
does not already comply with the reforms proposed in this NOPR.
V. Information Collection Statement
162. The Paperwork Reduction Act (PRA) \239\ requires each federal
agency to seek and obtain Office of Management and Budget (OMB)
approval before undertaking a collection of information directed to ten
or more persons or contained in a rule of general applicability. OMB's
regulations,\240\ in turn, require approval of certain information
collection requirements imposed by agency rules. Upon approval of a
collection(s) of information, OMB will assign an OMB control number and
an expiration date. Respondents subject to the filing requirements of a
rule will not be penalized for failing to respond to these
collection(s) of information unless the collection(s) of information
display a valid OMB control number.
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\239\ 44 U.S.C. 3501-3520.
\240\ 5 CFR 1320 (2016).
---------------------------------------------------------------------------
163. In this NOPR, we are proposing to amend the Commission's
regulations under Part 35 to require each RTO/ISO to propose revisions
to its tariff to (1) establish a participation model consisting of
market rules that, recognizing the physical and operational
characteristics of electric storage resources, accommodates their
participation in the organized wholesale electric markets and (2)
define distributed energy resource aggregators as a type of market
participant that can participate in the organized wholesale electric
markets under the participation model that best accommodates the
physical and operational characteristics of its distributed energy
resource aggregation. Accordingly, we encourage comments regarding the
time burden expected to be required to comply with the proposed rule
regarding the requirement for the RTOs/ISOs to change their tariffs to
conform to the proposed rule. Specifically, this NOPR seeks comment on
the additional burden and cost (human, hardware, and software)
associated with implementation, operation, and maintenance of these new
provisions in RTO/ISO tariffs. The Commission will provide estimates
for these costs in any future Final Rule, as appropriate.
Burden Estimate and Information Collection Costs: We believe that
the burden estimates below are representative of the average burden on
respondents. The estimated burden and cost for the requirements
contained in this NOPR follow.
[[Page 86548]]
FERC-516, as Modified by the NOPR in Docket RM16-23-000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual number Average burden Total annual burden
Number of of responses Total number of (hours) & cost per hours & total Cost per
respondents per respondent responses response annual cost respondent ($)
(1) (2) (1) x (2) = (3) (4)................. (3) x (4) = (5)..... (5) / (1)
--------------------------------------------------------------------------------------------------------------------------------------------------------
One-Time Tariff Filings (Year 1).. \241\ 6 1 6 1,040 hrs; $76,960 6,240 hrs; $461,760. $76,960
\242\.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title: FERC-516, Electric Rate Schedules and Tariff Filings.
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\241\ Respondent entities are either RTOs or ISOs.
\242\ The estimated hourly cost (salary plus benefits) provided
in this section is based on the salary figures for May 2015 posted
by the Bureau of Labor Statistics for the Utilities sector (http://www.bls.gov/oes/current/naics2_22.htm#13-0000) and scaled to reflect
benefits using the relative importance of employer costs in employee
compensation from June 2016 (http://www.bls.gov/news.release/ecec.nr0.htm). The hourly estimates for salary plus benefits are:
Legal (code 23-0000), $128.94
Computer and mathematical (code 15-0000), $60.54
Information systems manager (code 11-3021), $91.63
IT security analyst (code 15-1122), $63.55
Auditing and accounting (code 13-2011), $53.78
Information and record clerk (code 43-4199), $37.69
Electrical Engineer (code 17-2071), $64.20
Economist (code 19-3011), $74.43
Management (code 11-0000), $88.94
The average hourly cost (salary plus benefits), weighting all of
these skill sets evenly, is $73.74. The Commission rounds it to $74
per hour.
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Action: Proposed revisions to an information collection.
OMB Control No.: 1902-0096.
Respondents for this Rulemaking: RTOs and ISOs.
Frequency of Information: One-time during Year One.
Necessity of Information: The Commission implements this rule to
eliminate barriers to electric storage resource participation in the
organized wholesale electric markets and allow for participation of
aggregated distributed energy resources in the organized wholesale
electric markets.
Internal Review: The Commission has reviewed the changes and has
determined that such changes are necessary. These requirements conform
to the Commission's need for efficient information collection,
communication, and management within the energy industry. The
Commission has specific, objective support for the burden estimates
associated with the information collection requirements.
Interested persons may obtain information on the reporting
requirements by contacting the following: Federal Energy Regulatory
Commission, 888 First Street NE., Washington, DC 20426 [Attention:
Ellen Brown, Office of the Executive Director] Email:
[email protected] Phone: (202) 502-8663; fax: (202) 273-0873.
Comments concerning the collection of information and the associated
burden estimate(s) may also be sent to: Office of Information and
Regulatory Affairs, Office of Management and Budget, 725 17th Street
NW., Washington, DC 20503 [Attention: Desk Officer for the Federal
Energy Regulatory Commission]. Due to security concerns, comments
should be sent electronically to the following email address:
[email protected]. Comments submitted to OMB should refer to
FERC-516 and OMB Control No. 1902-0096.
VI. Regulatory Flexibility Act Certification
164. The Regulatory Flexibility Act of 1980 (RFA) \243\ generally
requires a description and analysis of proposed rules that will have
significant economic impact on a substantial number of small entities.
The RFA mandates consideration of regulatory alternatives that
accomplish the stated objectives of a rule and that minimize any
significant economic impact on a substantial number of small entities.
The Small Business Administration's (SBA) Office of Size Standards
develops the numerical definition of a small business.\244\ These
standards are provided on the SBA Web site.\245\
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\243\ 5 U.S.C. 601-12.
\244\ 13 CFR 121.101.
\245\ U.S. Small Business Administration, Table of Small
Business Size Standards Matched to North American Industry
Classification System Codes (effective Feb. 26, 2016), https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------
165. The SBA classifies an entity as an electric utility if it is
primarily engaged in the transmission, generation and/or distribution
of electric energy for sale. Under this definition, the six RTOs/ISOs
are considered electric utilities, specifically focused on electric
bulk power and control. The size criterion for a small electric utility
is 500 or fewer employees.\246\ Since every RTO/ISO has more than 500
employees, none are considered small entities.
---------------------------------------------------------------------------
\246\ 13 CFR 121.201 (Sector 22, Utilities).
---------------------------------------------------------------------------
166. Furthermore, because of their pivotal roles in wholesale
electric power markets in their regions, none of the RTOs/ISOs meet the
last criterion of the two-part RFA definition of a small entity: ``Not
dominant in its field of operation.'' \247\ As a result, we certify
that the reforms required by this NOPR would not have a significant
economic impact on a substantial number of small entities.
---------------------------------------------------------------------------
\247\ The RFA definition of ``small entity'' refers to the
definition provided in the Small Business Act, which defines a
``small business concern'' as a business that is independently owned
and operated and that is not dominant in its field of operation. The
Small Business Administration's regulations at 13 CFR 121.201 define
the threshold for a small Electric Bulk Power Transmission and
Control entity (NAICS code 221121) to be 500 employees. See 5 U.S.C.
601(3) (citing to section 3 of the Small Business Act, 15 U.S.C.
632).
---------------------------------------------------------------------------
VII. Environmental Analysis
167. The Commission is required to prepare an Environmental
Assessment or an Environmental Impact Statement for any action that may
have a significant adverse effect on the human environment.\248\ We
conclude that neither an Environmental Assessment nor an Environmental
Impact Statement is required for this NOPR under section 380.4(a)(15)
of the Commission's regulations, which provides a categorical exemption
for approval of actions under sections 205 and 206 of the FPA relating
to the filing of schedules containing all rates and charges for the
transmission or sale of electric energy subject to the Commission's
jurisdiction, plus the classification, practices, contracts and
regulations that affect rates, charges, classifications, and
services.\249\
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\248\ Regulations Implementing the National Environmental Policy
Act of 1969, Order No. 486, 52 FR 47,897 (Dec. 17, 1987), FERC
Stats. & Regs., ] 30,783 (1987).
\249\ 18 CFR 380.4(a)(15).
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VIII. Comment Procedures
168. The Commission invites interested persons to submit comments
on all matters and issues proposed in this Proposal to be adopted,
including any related matters or alternative proposals that commenters
may wish to discuss. Comments are due January 30, 2017. Comments must
refer to Docket No. RM16-23-000 and must include the commenter's name,
the organization they represent, if applicable, and their address.
169. The Commission encourages comments to be filed electronically
via
[[Page 86549]]
the eFiling link on the Commission's Web site at http://www.ferc.gov.
The Commission accepts most standard word processing formats. Documents
created electronically using word processing software should be filed
in native applications or print-to-PDF format and not in a scanned
format. Commenters filing electronically do not need to make a paper
filing.
Commenters that are not able to file comments electronically must
send an original of their comments to: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
170. All comments will be placed in the Commission's public files
and may be viewed, printed, or downloaded remotely as described in the
Document Availability section below. Commenters on this Proposal are
not required to serve copies of their comments on other commenters.
IX. Document Availability
171. In addition to publishing the full text of this document in
the Federal Register, the Commission provides all interested persons an
opportunity to view and/or print the contents of this document via the
Internet through the Commission's Home Page (http://www.ferc.gov) and
in the Commission's Public Reference Room during normal business hours
(8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A,
Washington, DC 20426.
172. From the Commission's Home Page on the Internet, this
information is available on eLibrary. The full text of this document is
available on eLibrary in PDF and Microsoft Word format for viewing,
printing, and/or downloading. To access this document in eLibrary, type
the docket number of this document, excluding the last three digits, in
the docket number field.
173. User assistance is available for eLibrary and the Commission's
Web site during normal business hours from the Commission's Online
Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
[email protected].
List of Subjects in 18 CFR Part 35
Electric power rates; Electric utilities.
By direction of the Commission.
Issued: November 17, 2016.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
In consideration of the foregoing, the Commission proposes to amend
Part 35 Chapter 1, Title 18 of the Code of Federal Regulations as
follows:
PART 35--FILING OF RATE SCHEDULES AND TARIFFS
0
1. The authority citation continues to read as follows:
Authority: 16 U.S.C. 791a-825r, 2601-2645; 31 U.S.C. 9701; 42
U.S.C. 7101-7352.
0
2. Amend Sec. 35.28 by adding new paragraphs (b)(9) through (12), (g)
(9), and (g)(10).
Sec. 35.28 Non-discriminatory open access transmission tariff.
* * * * *
(b) * * *
(9) Electric storage resource as used in this section means a
resource capable of receiving electric energy from the grid and
storing it for later injection of electricity back to the grid
regardless of where the resource is located on the electrical
system.
(10) Distributed energy resource as used in this section means a
source or sink of power that is located on the distribution system,
any subsystem thereof, or behind a customer meter.
(11) Distributed energy resource aggregator as used in this
section means the entity that aggregates one or more distributed
energy resources for purposes of participation in the capacity,
energy and ancillary service markets of the regional transmission
organizations and independent system operators.
(12) Organized wholesale electric markets as used in this
section means the capacity, energy, and ancillary service markets
operated by regional transmission organizations and independent
system operators.
* * * * *
(g) * * *
(9) Electric Storage Resources. (i) Each Commission-approved
independent system operator and regional transmission organization
must have tariff provisions providing a participation model for
electric storage resources that
(A) Ensures that electric storage resources are eligible to
provide all capacity, energy and ancillary services that they are
technically capable of providing in the organized wholesale electric
markets;
(B) Incorporates bidding parameters that reflect and account for
the physical and operational characteristics of electric storage
resources;
(C) Ensures that electric storage resources can be dispatched
and can set the wholesale market clearing price as both a wholesale
seller and wholesale buyer consistent with existing rules that
govern when a resource can set the wholesale price;
(D) Establishes a minimum size requirement for participation in
the organized wholesale electric markets that does not exceed 100
kW; and
(E) Specifies that the sale of energy from the organized
wholesale electric markets to an electric storage resource that the
resource then resells back to those markets must be at the wholesale
locational marginal price.
(ii) [Reserved]
(10) Distributed Energy Resource Aggregators. (i) Each
independent system operator and regional transmission organization
must have tariff provisions that allow distributed energy resource
aggregations to participate directly in the organized wholesale
electric markets. Each regional transmission organization and
independent system operator must establish distributed energy
resource aggregators as a type of market participant and must allow
the distributed energy resource aggregators to register distributed
energy resource aggregations under the participation model in the
regional transmission operator or the independent system operator's
tariff that best accommodates the physical and operational
characteristics of the distributed energy resource aggregation.
(ii) Each regional transmission operator and independent system
operator, to accommodate the participation of distributed energy
resource aggregations, must establish market rules on:
(A) Eligibility to participate in the organized wholesale
electric markets through a distributed energy resource aggregation;
(B) Locational requirements for distributed energy resource
aggregations;
(C) Distribution factors and bidding parameters for distributed
energy resource aggregations;
(D) Information and data requirements for distributed energy
resource aggregations;
(E) Modification to the list of resources in a distributed
energy resource aggregation;
(F) Metering and telemetry system requirements for distributed
energy resource aggregations;
(G) Coordination between the regional transmission organization
or independent system operator, the distributed energy resource
aggregator, and the distribution utility;
(H) Market participation agreements for distributed energy
resource aggregators.
Note: The following appendix will not appear in the Code of Federal
Regulations
Appendix A: Abbreviated Names of Commenters
The following table contains the abbreviated names of the
commenters that are used in this Notice of Proposed Rulemaking.
------------------------------------------------------------------------
Abbreviation Commenters
------------------------------------------------------------------------
Advanced Energy Economy........... Advanced Energy Economy
AEP............................... American Electric Power Service
Corporation
[[Page 86550]]
AES Companies..................... Indianapolis Power & Light Company,
The Dayton Power and Light Company,
AES Energy Storage LLC, AES ES Tait
LLC and all other AES U.S.
operating companies that own
generation and storage
Alevo............................. Alevo Analytics
Advanced Microgrid Solutions...... Advanced Microgrid Solutions, Inc.
APPA.............................. American Public Power Association
Advanced Rail Energy Storage...... Advanced Rail Energy Storage, LLC
Brookfield Renewable.............. Brookfield Renewable
California Department of Water California Department of Water
Resources. Resources
California Energy Storage Alliance California Energy Storage Alliance
Delaware Commission............... Delaware Public Service Commission
Duke Energy....................... Duke Energy Corporation
EEI............................... Edison Electric Institute
Enel Green Power.................. Enel Green Power North America, Inc.
Electric Power Supply Association. Electric Power Supply Association
Electric Vehicle R&D Group........ University of Delaware Electric
Vehicle R&D Group
Energy Storage Association........ Energy Storage Association
FirstLight........................ FirstLight Power Resources
Management LLC
Golden Spread..................... Golden Spread Electric Cooperative,
Inc.
Ice Energy........................ Ice Energy
Independent Energy Producers Independent Energy Producers
Association. Association
Manitoba Hydro.................... Manitoba Hydro
Minnesota Energy Storage Alliance. Minnesota Energy Storage Alliance
National Electrical Manufacturers National Electrical Manufacturers
Association. Association
National Hydropower Association... National Hydropower Association
New York Battery and Energy New York Battery and Energy Storage
Storage Consortium. Technology Consortium
NextEra........................... NextEra Energy Resources, LLC
NRECA............................. National Rural Electric Cooperative
Association
NY Transmission Owners............ Central Hudson Gas & Electric
Corporation, Consolidated Edison
Company of New York, Inc., New York
Power Authority, New York State
Electric & Gas Corporation, Niagara
Mohawk Power Corporation, Orange
and Rockland Utilities, Inc., Power
Supply Long Island, and Rochester
Gas and Electric Corporation
Ormat............................. Ormat Nevada Inc.
Pacific Gas & Electric............ Pacific Gas and Electric Company
Public Interest Organizations..... Sustainable FERC Project on behalf
of Natural Resources Defense
Council and Union of Concerned
Scientists
PJM Market Monitor................ Independent Market Monitor For PJM
Quanta............................ Ralph Masiello, Quanta Technologies,
LLC
RES Americas...................... Renewable Energy Systems Americas
Inc.
SoCal Edison...................... Southern California Edison Company
Schulte Associates................ Schulte Associates LLC
Solar Grid Storage................ Solar Grid Storage, LLC
SolarCity......................... SolarCity Corporation
Steffes........................... Steffes
Tesla............................. Tesla Motors, Inc.
Viridity.......................... Viridity Energy, Inc.
Wellhead.......................... Wellhead Electric Company
Xcel Energy Services.............. Xcel Energy Services, Inc., on
behalf of its operating company
affiliates, Northern States Power
and Southwestern Public Service
Company
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[FR Doc. 2016-28194 Filed 11-29-16; 8:45 am]
BILLING CODE 6717-01-P