FERC fined Terra-Gen nearly $5 million for strategically using its battery storage resources to repeatedly manipulate CAISO’s market for nearly two years.

The commission in its April 7 order also directed Delaware-based Terra-Gen to pay back CAISO $681,007 in profits made between July 7, 2020, and April 17, 2022, by selectively avoiding the requirements of regulation-down awards for two of its wind-plus-battery facilities participating in the ISO’s day-ahead ancillary services market (IN26-2).

During the period in question, Terra-Gen — through its TGP Energy subsidiary — earned regulation-down awards that required its Mojave 89 and Mojave 90 battery storage resources to be placed on automatic generation control (AGC) to allow CAISO to dispatch them to buy energy off the grid in the real-time market when needed.

But Terra-Gen instead began engaging in a practice of claiming outages for the resources, then removing them from AGC when real-time locational marginal prices were high, even though there was no legitimate basis for doing so, FERC found.

A former Terra-Gen vice president instructed his team that, “if CAISO signals the battery to regulate down in a high pricing event, we will leave the market, resulting in only a small portion of lost revenue” due to forfeit of the day-ahead award, the commission wrote in the order.

“Engaging in this conduct only when LMPs were high was a deliberate effort by Terra-Gen to gain the financial benefits of avoiding high-priced purchases of energy from the grid when instructed to do so by CAISO,” FERC said in the decision. “In contrast, the resources did not claim outages or disconnect from automatic generation control when they received regulation-up awards, because these awards allowed Terra-Gen to profit by selling energy into the grid in real time.”

The Mojave facilities were originally hybrid resources in CAISO’s market, meaning each wind farm and associated battery storage facility had one ISO resource ID. But in November 2020, Terra-Gen converted the Mojave 90 into a co-located facility, meaning its wind and battery components each had their own resource IDs. In 2022, Mojave 89 also converted from a hybrid to a co-located facility.

FERC ordered Terra-Gen to repay CAISO the $681,007 in profit plus interest and undergo additional compliance requirements. As part of those additional requirements, Terra-Gen created a new director position, which will oversee energy markets compliance of FERC regulations and CAISO rules.