The Federal Energy Regulatory Commission (FERC) has announced two conferences to address issues raised by the increasing deployment of electric storage resources and their use in electricity markets. One conference will address a proposal by a Regional Transmission Operator (RTO) to treat an electric storage facility as a transmission-only resource if it can resolve specific transmission issues. The second conference will discuss issues raised by hybrid resources, i.e., a storage resources paired with a generation resources. These conferences should be of interest to a wide range of electricity market participants, including utilities, generation companies, customers and investors in storage and other electricity resources.
The storage-as-transmission conference
While storage resources generally operate as supply-side resources that earn revenue through energy market participation, their ability to inject and withdraw energy from the grid allows them to be operated in a way that substitutes for potentially more costly transmission facilities. The Midcontinent Independent System Operator (MISO) proposed tariff provisions to allow a storage facility to be treated as a transmission-only asset if it can resolve issues identified in the RTO’s regional transmission plan. MISO refers to this new type of resource as a “storage facility as a transmission-only asset” (or SATOA).
Treatment as a transmission resource provides additional deployment opportunities for storage resources and allows them cost recovery through cost-based transmission rates instead of relying entirely on energy market revenues. Standardized tariff-based criteria for qualifying and operating as a transmission resource should provide an easier path to such treatment.
As discussed in an earlier post to this blog, the tariff proposal raised issues that FERC set for discussion in a technical conference. This proceeding will likely set a precedent for RTOs with respect to the terms and conditions under which storage resources may qualify as transmission resources.
FERC’s staff-led conference is scheduled for May 4, 2020 and will be held remotely. The conference notice has further details as well as an agenda and sets out issues for discussion, including the following:
- The criteria for qualifying as a SATOA and for determining if it is the best solution for addressing a transmission issue.
- Ensuring that a SATOA is under MISO’s functional control and in the proper state of charge to either discharge or charge as needed.
- The impacts on the energy market of a SATOA’s participation as a price taker.
- Whether MISO’s formula rate for transmission services can accommodate cost recovery for a SATOA and for crediting back net revenues earned when discharging energy into the market.
- How to address the costs of a new SATOA’s impact on generators in the queue to interconnect to the grid.
- The details of operating guides for SATOAs.
The hybrid resource conference
FERC’s one-page notice says that this conference will address the technical and market issues prompted by the growing interest in projects that are comprised of a generation resource and a storage resource paired together at one location as a hybrid resource. The conference is scheduled for July 23, 2020 and will be held either in person or via teleconference only. Further details will be announced later. Expressions of interest in participating must be submitted by May 15, 2020.