FERC Affirms Storage Market Participation Rule, Declining Requests for State Opt-Outs

The Federal Energy Regulatory Commission on May 16 declined a request to allow state regulatory authorities to decide whether or not behind-the-meter and distribution-connected storage resources may participate in the wholesale power markets. The agency acknowledged that states have the authority to dictate the terms of their own retail programs, allowing resources to choose between participating in retail or wholesale markets, but may not broadly prohibit all retail customers from selling into wholesale markets.

FERC adopted the landmark Order No. 841 in February 2018, directing grid operators to establish a market model that recognizes the unique characteristics of storage. The agency issued the order because it found that current tariffs do not recognize the operational characteristics of electric storage resources and limit their participation. Regional grid operators filed proposals in December 2018 to comply with the order, paving the way for broader participation of storage resources in wholesale power markets.

Commissioner Bernard McNamee partially dissented from the May 16 ruling over concerns that the agency failed to fully consider the potential  impact on local distribution systems, the states that regulate those systems, and local retail customers. McNamee agreed that the storage orders are on “solid footing” with regard to resources connected to the transmission system and participation in the wholesale market, concurring with those aspects of the order.

The agency also affirmed other key aspects of Order 841, rejecting requests to delay the December 3, 2019, compliance deadline or to modify the 100 kW minimum size requirement for the participation models.