Generators would be permitted to sell frequency response services at market-based rates under a rule proposed by the Federal Energy Regulatory Commission last week.
FERC’s notice of proposed rulemaking (RM15-2) was issued in response to a reliability standard the commission approved in January 2014 requiring balancing authorities to maintain minimum frequency-response obligations (BAL-003-1). (See FERC OKs Rules on Geomagnetic Disturbances, Frequency Response.)
“While most balancing authorities should be able to meet the new reliability standard using their own resources, some may nevertheless be interested in purchasing primary frequency response service from others if doing so would be economically beneficial,” the commission wrote, concluding “there could be interest in the near future in voluntary purchases of a primary frequency response product.”
FERC would allow entities with market-based rate authority for energy and capacity to also sell frequency response at market-based rates.
The NOPR applies to generators providing primary frequency response — the ability to automatically change their output within seconds when the grid’s frequency strays above or below 60 Hz.
It is distinguished from regulation — also known as secondary frequency response — which involves manual or automated dispatch from a centralized control system.
The requirements of the reliability standard will be phased in over a year beginning April 1. The commission expects to finalize the rule after a 60-day comment period.
