By Hudson Sangree

FERC on Thursday found that CAISO, ISO-NE and MISO had largely complied with Order 841, but it ordered changes to some of the grid operators’ proposed tariff revisions.

With CAISO, FERC found its compliance filing, with “certain modifications,” met the requirements of Order 841, intended to remove barriers to the participation of electric storage resources in organized electric markets (ER19-468). But the commission determined the ISO had not fully complied with the requirement that it prevent electric storage resources from paying both wholesale and retail rates for the same charging energy.

“In other words, we find that CAISO has not proposed a participation model for electric storage resources that fully eliminates the potential for duplicative retail and wholesale billing for charging by electric storage resources that later resell that charging energy back to the wholesale markets,” FERC wrote. “We are requiring CAISO on compliance to modify its Tariff so that it does not charge an electric storage resource wholesale rates for charging energy for which the electric storage resource is already paying retail rates.”

In the case of ISO-NE, FERC determined the RTO’s Tariff revisions hadn’t adequately dealt with “the application of transmission charges to electric storage resources” (ER19-470).

“ISO-NE proposes to exempt electric storage resources from all applicable transmission service charges (i.e., charges for regional network service and local service) when they are dispatched to charge,” the commission said. Order 841, however, required “any electric storage resource that is charging for the purpose of participating in an RTO/ISO market … should be assessed charges consistent with how the RTO/ISO assesses transmission charges to wholesale load under its existing rate structure.”

“ISO-NE does not meet these requirements because its proposal exempts all electric storage resources that are charging for later resale from transmission charges that are applicable to other load,” FERC wrote. “Therefore, we direct ISO-NE to submit on compliance within 60 days of the date of this filing, Tariff revisions that comply with this aspect of Order Nos. 841 and 841-A by applying transmission charges to an electric storage resource.”

FERC also found MISO had mainly complied with Order 841 but rejected its plan to assess transmission charges to electric storage resources dispatched to withdraw energy pursuant to their downward ramping capability (ER19-465).

“We are not persuaded by MISO’s arguments that this dispatch is not providing a service,” FERC said. “Order No. 841 specifies that electric storage resources should not be assessed transmission charges when they are dispatched by an RTO/ISO to provide a service such as frequency regulation or a downward ramping service.”

FERC also granted MISO more time than the other grid operators to implement the order.

“While the commission … declined to provide the RTOs/ISOs with additional time for implementation, we find here that MISO’s request to implement the requirements of Order No. 841 after the deadline established … is reasonable based on the specific circumstances outlined in its filings,” FERC said.

MISO announced in April that it would seek at least another year to comply with the order, saying the intricacy and expense of incorporating storage into its markets was greater than it originally expected. The RTO is trying to create a new market platform, making compliance with Order 841 by December infeasible, it said. (See More Time Needed for Storage Compliance, MISO Says.)

“We note that MISO’s request to defer the effective date of its compliance filing was not opposed,” FERC said. “Therefore, we grant MISO’s request to defer the effective date of its compliance filing to June 6, 2022.”

McNamee, States Want Opt-out

As he did in the compliance filings of PJM and SPP in October, Commissioner Bernard McNamee issued concurring statements that said the commission “should have, at the very least, provided states the opportunity to opt out of the participation model created by the storage orders.”

McNamee was not on the commission at the time Order 841 was issued but expressed his “continuing concern” that FERC had exceeded its statutory authority by not allowing states to determine whether storage may use distribution facilities to access the wholesale markets.

He also noted that state regulators, utilities and public power groups have asked the D.C. Circuit Court of Appeals to overturn part of the order, challenging the commission’s refusal to allow states to opt out. (See States, Public Power Challenge FERC Storage Rule.)

Order 841, 20 Months Later

FERC first issued Order 841 in February 2018, requiring each RTO/ISO to establish a participation model for storage resources to ensure they are eligible to provide all energy, capacity or ancillary services of which they are capable, while also enabling them to set clearing prices as both a buyer and seller. Grid operators also need to establish a minimum threshold for participation that doesn’t exceed 100 kW.

Order 841 “will enhance competition in these markets and help ensure that they produce just and reasonable rates,” staff told commissioners at the time. (See FERC Rules to Boost Storage Role in Markets.)

RTOs and ISOs filed proposed tariff revisions in December 2018. Together, the filings by CAISO, ISO-NE, MISO, RTOs/ISOs File FERC Order 841 Compliance Plans.)

FERC, grid operators and stakeholders then had a year to review, revise and implement the plans by Dec. 3.

FERC staff issued deficiency letters to all six RTOs and ISOs in April over their proposed energy storage rules, pressing for definitions, tariff citations and details on issues including metering, make-whole payments and self-scheduling. (See FERC Asks RTOs for more Details on Storage Rules.)

In October, FERC issued its first two orders implementing its rulemaking, mostly accepting PJM’s and SPP’s proposals but also objecting to some aspects. (See FERC Partially OKs PJM, SPP Order 841 Filings.)

For instance, FERC rejected SPP’s proposed provisions related to aggregation of storage resources, because Order 841 did not address aggregation. It gave SPP 60 days to submit a compliance filing removing the provisions.

The commission also established a paper hearing procedure to investigate whether PJM’s 10-hour minimum run-time requirement was unjust and unreasonable as applied to capacity storage resources.

FERC has yet to rule on NYISO’s compliance filing. Speaking to reporters after the commission’s open meeting Thursday, Chair Neil Chatterjee said he was “confident we will move forward with New York ISO when it’s ready.”