ISO-NE must include pumped storage resources in its Inventoried Energy Program (IEP), FERC ruled on Thursday, siding with Brookfield Renewable Trading and Marketing in the company’s complaint against the RTO (EL23-89).

The IEP is intended to compensate resources for storing extra fuel they otherwise would not procure during periods of winter reliability risk. (See FERC Approves Updates to ISO-NE Inventoried Energy Program.) The D.C. Circuit Court of Appeals ruled in 2022 the IEP cannot extend to nuclear, coal, biomass and hydroelectric resources because the program would not result in a change of their fuel storage behaviors.

Following the D.C. Circuit ruling, ISO-NE submitted — and FERC approved — a version of the IEP which excluded the specified resources, including pumped storage. Brookfield Renewable, which operates a 633-MW pumped hydro storage facility in western Massachusetts, filed a complaint over the exclusion of the resource type in August.

In FERC’s ruling on Thursday, the commission said the D.C. Circuit ruling does not preclude the inclusion of pumped storage because these facilities fall under the category of electric storage facilities, which are allowed to receive payments in the IEP.

“As the ISO-NE tariff currently permits battery storage electric storage facilities to be eligible to participate in the Inventoried Energy Program, it is unduly discriminatory to prohibit pumped storage electric storage facilities, which similarly store energy to later inject the energy into the system, from being eligible to participate in the Inventoried Energy Program and receive those payments,” the commission wrote.

FERC wrote that IEP payments likely would incentivize pumped storage facilities to alter their behavior and boost reliability in the region.

“Allowing pumped storage electric storage facilities to be eligible to participate in the Inventoried Energy Program, similar to other electric storage facilities, can alter their incentives and thus their behavior by providing an incremental financial incentive to store energy,” the commission wrote in the Sept. 21 ruling.

FirstLight Power and the New England Power Generators Association both submitted comments in August supporting Brookfield’s complaint, while a group of consumer-owned power companies opposed it.

The consumer-owned power companies argued the complaint was attempting to relitigate previous findings and that including pumped storage in the IEP would not result in more stored energy.

“Brookfield’s complaint fails to show that any system-wide incremental energy production would result from extending the IEP’s incentive compensation mechanism to pumped storage hydro facilities,” the group wrote.

In its complaint, Brookfield argued pumped storage operates in the same way as any other type of electric storage.

“The fact that one ESF [electric storage facility] may use pumped storage technology and another ESF may use a chemical battery is irrelevant because they both are able to provide the identical winter reliability service through the IEP,” Brookfield wrote. “Because all ESF technologies operate under the same economic principles, the same incentive exists for all ESFs to provide reliability service through the IEP.”

ISO-NE told FERC it did not oppose the inclusion of pumped storage in the IEP but said it believed the D.C. Circuit ruling prevented their inclusion in the program.

“The D.C. Circuit’s Belmont decision did not differentiate between pondage and pumped hydroelectric resources, but instead simply indicated that ‘hydroelectric’ resources must be excluded from the IEP,” ISO-NE wrote. “The Belmont court did not provide any exception for pumped hydroelectric resources to participate in the IEP as ESFs.”

ISO-NE had said it needed a FERC order by Sept. 22 to include pumped storage in the IEP for the upcoming winter.