PJM, CAISO and SPP took a step closer Thursday to the full implementation of Order 841 with FERC’s partial acceptance of their Tariff revisions.

Order 841, issued in February 2018, directed RTOs and ISOs to remove barriers to the participation of energy storage resources (ESRs) in their wholesale electric markets.

The commission accepted PJM’s compliance filing — its third in response to the order — subject to yet another revision, calling for the Tariff to state that the RTO will not charge a distribution-connected ESR for charging energy if the distributor is unwilling or unable to net out any retail energy purchases associated with the ESR’s wholesale charging activities from the host customer’s retail bill (ER19-469).

FERC said PJM did not follow the proposed language in its second order on compliance, instead filing Tariff language specifying that the provision only applies to an ESR that is “co-located with end-use load.”

“We are concerned that this language could exclude a distribution-connected energy storage resource that is not directly on the site of end-use load but nonetheless receives a retail bill because it is located behind a distribution utility meter,” the commission wrote.

The commission directed PJM to submit a further compliance filing to either clarify how its proposed Tariff provisions prevent all distribution connected ESRs from paying twice for the same charging energy or propose Tariff revisions to ensure the outcome. The RTO has 90 days to make the filing.

FERC did accept PJM’s proposal to modify its participation model to more appropriately account for an ESR’s state of charge, maximum state of charge and minimum state of charge by using bidding parameters incorporated into its day-ahead and real-time market clearing engines. It also accepted the RTO’s proposal to add Tariff definitions of bidding parameters that include: minimum and maximum charge limit; minimum and maximum discharge limit; and charge and discharge ramp rate.

The provisions in the compliance filing are effective retroactively to Dec. 3, 2019, with a limited number of revisions to become effective March 31, 2024, subject to the further compliance filing.

CAISO Compliance

CAISO also edged closer to full acceptance of its energy storage market participation rules when FERC approved nearly all the provisions included in the ISO’s second Order 841 compliance filing (ER19-468).

The commission approved CAISO’s energy storage participation model last November (becoming effective Dec. 3, 2019) but directed the ISO to:

• revise its Tariff to include a “basic description” of its metering methodology and accounting practices for storage resources;
• explain how the metering and accounting practices allow storage resources to participate in both wholesale and retail markets, or revise its Tariff to allow storage resources that provide retail services to also participate in CAISO’s wholesale market; and
• revise its Tariff to explain that if an ESR’s host utility is unwilling or unable to net out any energy purchases associated with the resource’s wholesale charging activities from the resource’s retail bill, then CAISO would be prevented from charging wholesale rates for charging energy for which the resource is already paying retail rates.

FERC on Thursday approved of CAISO’s proposal to address the first shortcoming by creating a new Tariff section, 10.1.3.4, which describes the metering and accounting for storage resources, including provisions meant to ensure that resources avoid double-billing for retail and wholesale participation.

The section also contains an explanation that resources can elect to become either: “metered entities,” which pay higher upfront costs for a more complex certification process that helps resources avoid ongoing costs related to meter data validation and avoid certain penalties because they are being instantaneously metered by CAISO; or “scheduling coordinator metered entities,” which must comply with several initial and ongoing requirements to meet Tariff requirements but can avoid some upfront costs and are allowed to propose “unique, complex metering configurations” for ISO approval.

The commission also accepted related Tariff provisions giving both types of metered entities flexibility in how they configure their metering systems to avoid “commingling” of retail and wholesale meter data.

“CAISO states that electric storage resources — especially those that may participate in retail and wholesale markets simultaneously — have highly variable metering needs, local regulatory requirements and configurations,” FERC wrote. “CAISO states that by including simple, flexible Tariff provisions, CAISO will avoid a one-size-fits-few approach and instead be able to review each storage resource’s proposal to ensure CAISO receives settlement quality meter data for wholesale charges only.”

The only sticking point in the compliance filing: CAISO’s solution for resources unable to net out wholesale energy purchases from their retail bills. While FERC approved a proposed requirement that a host utility distribution company or retail utility verify in writing to the ISO when it is unable or unwilling to net out from its retail billing any wholesale energy purchases, the commission pointed out that the provision applies only to a “non-generating resource” (NGR), a resource type created by CAISO to accommodate market participation by resources that can both inject or withdraw energy from the grid.

“We note that this provision only applies to NGRs, and therefore does not apply to all electric storage resources, as required by the commission’s directive in the first compliance order,” FERC wrote, directing CAISO to submit a third compliance filing that clarifies the rule will apply to storage resources participating in the market as other resource types.

SPP Compliance

FERC accepted and rejected in part SPP’s second attempt to comply with Order 841, requiring yet another compliance filing within 90 days (ER19-460).

The commission found that the RTO’s proposed Tariff revisions partially complied with the order’s requirements on registering ESRs. It said it was “concerned” that SPP’s provisions requiring ESRs certify that their wholesale market participation “is not precluded under the laws or regulations of the relevant electric retail regulatory authority” could be interpreted “to include an opt-out that the commission declined to provide, which would be inconsistent with Order Nos. 841 and 841-A.”

Other than that, FERC said, SPP’s revisions describing ESRs’ metering methodology and accounting practices “provide additional guidance to market participants and appropriately reference additional documents that provide implementation details.”

SPP made its first compliance filing in December 2018. FERC last October accepted and rejected it in part, ordering a second compliance filing. (See FERC Partially OKs PJM, SPP Order 841 Filings.)

The grid operator in December asked to delay the Tariff revisions’ effective date, citing issues with software implementation and its settlement management system. The commission set an effective date of Aug. 5, 2021. It rejected a subsequent SPP request to set another date.