State Utility Regulators Challenge FERC Denial to Allow Opt Out of Energy Storage Rule

The National Association of Regulatory Utility Commissioners asked the U.S. Court of Appeals for the District of Columbia Circuit to overturn the Federal Energy Regulatory Commission’s decision to deny states the opportunity to opt out of storage participation in wholesale markets, according to a July 16 press release.

The organization, which represents state utility commissions, said it expects states and relevant electric retail regulatory authorities to have the ability to manage distribution-connected or behind-the-meter storage resources in the same way as they oversee demand response aggregation.

In May, the Federal Energy Regulatory Commission declined a request to allow state regulatory authorities to decide whether or not storage resources connected to distribution facilities or located behind a retail meter 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. 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.