FERC

A recent amendment to the Federal Power Act (FPA) that will become effective March 27, 2019 sets a $10 million threshold for requiring Federal Energy Regulatory Commission (FERC) prior approval of public utility mergers and consolidations.  That amendment also calls for FERC to adopt a rule requiring public utilities to simply notify FERC of mergers and consolidations with a value over $1 million but less than $10 million.  At its recent public meeting, FERC approved a Notice of Proposed Rulemaking (NOPR) regarding that notice requirement.  These provisions, when in effect, will place mergers and consolidations under the same value threshold as other types of transactions and eliminate the need for low-value mergers and consolidations to secure FERC approval.  These legislative and regulatory changes will be of interest to entities that anticipate merging or consolidating facilities that are subject to the jurisdiction of FERC.
Continue Reading FERC Proposes Notice Requirement For Public Utility Mergers and Acquisitions Under New Monetary Threshold

Taking another step toward a comprehensive policy on the participation of electric storage resources and other distributed electric resources (DERs) in wholesale markets run by independent grid operators, FERC has requested additional comments on its proposal regarding aggregating DERs and their potential effects on the bulk power system.  FERC’s request follows up on a technical

Under the Natural Gas Act (NGA), FERC certificates the construction and operation of pipelines to transport natural gas in interstate commerce if they are “required by the present or future public convenience and necessity.”  For almost two decades, FERC has used a 1999 policy statement’s guidelines to evaluate whether new pipelines meet that statutory standard. 

FERC has approved a final rule requiring generating facilities that interconnect to the grid to provide primary frequency response.[1]  Primary frequency response actions are needed to stop extraordinary deviations from the grid’s target frequency that could cause grid instability.  The North American Electric Reliability Corporation, the group responsible for grid reliability standards, said

Electric storage resources such as batteries and flywheels are shaping the grid of the future. The ability of these resources to absorb and discharge electricity gives the resources operational flexibility that allows them to provide a variety of services to help keep the power grid in balance.  Energy storage installations in the U.S. grew 100% in 2016Most of the new resources were utility scale but 25% were commercial and residential systems.

As discussed previously in this blog, FERC issued a Notice of Proposed Rulemaking (NOPR) intended to knock down barriers to storage resource participation in the organized wholesale electricity markets administered by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).[1]  FERC’s proposal would require each RTO to revise its tariff in two ways:

  • Establish market rules that recognize the physical and operational characteristics of storage resources and accommodate their participation. Storage resources that participate in wholesale markets must do so under rules designed for other types of resources.
  • Allow distributed energy resource aggregators to participate in the markets. Individual distributed energy resources may be too small to meet minimum size requirements or have difficulty satisfying operational performance requirements of the markets. Allowing these resources to participate through aggregations can enable them to satisfy requirements that they could not meet on a stand-alone basis.

FERC received comments on its proposal from more than seventy entities across a broad  spectrum of the industry.  This post summarizes the major issues raised in the comments.Continue Reading FERC Gets Comments on Electric Storage Proposal

A previous post on this blog reported a complaint by an electric storage resource owner that FERC must reform a Regional Transmission Organization’s (RTO’s) tariff with respect to the treatment of storage batteries.  In response, FERC issued an Order that requires the RTO to adopt rules that allow storage resources to participate in all of its markets and that account for those resources’ physical and operational characteristics.  The Order is significant because it breaks down barriers to the participation of storage resources in energy, capacity and ancillary services markets in an RTO whose rules are shown to violate the policies proposed in FERC’s Storage NOPR.
Continue Reading FERC Addresses Electric Storage Complaint

One factor driving the grid of the future is the change in the nation’s electric generator resource mix, such as the retirement of traditional baseload generation and an increasing proportion of variable energy resources, such as wind and solar.  This evolution has raised concern that the capability to provide “primary frequency response,” a critical grid support service, is declining.  FERC, concerned with potential grid reliability problems, issued a Notice of Proposed Rulemaking (NOPR) that would require new generators to have the equipment to provide the service and to provide it when needed. The North American Electric Reliability Corporation, the group responsible for developing and administering reliability standards, said that “[f]requency response is among the essential reliability services critical to the reliability of the bulk power system.  The NOPR recognizes the importance of frequency response as the generation resource mix undergoes rapid change.”
Continue Reading FERC Proposes Requiring New Generators to Provide A Grid Support Service

Electricity storage resources are shaping the grid of the future.  Large-scale batteries and flywheels are now able to provide services to grid operators to help keep the bulk power system in balance.  Electric storage resources’ ability to absorb and discharge electricity provides them with significant operational flexibility, and they can be designed to provide a variety of grid services.  FERC has jurisdiction over the terms and conditions of services on the U.S. interstate transmission grid, and, as described recently on this blog, the Commission has been addressing issues to facilitate the integration of storage resources into grid operations.

At its public meeting on November 17, the Commission approved a Notice of Proposed Rulemaking (NOPR) to remove barriers to the participation of storage resources and distributed energy resource aggregations in the organized wholesale electricity markets administered by Regional Transmission Organizations (RTOs).  The Energy Storage Association calls FERC’s proposal a  “pivotal opportunity” that “opens a pathway for accelerating energy storage deployment” and accelerates the “transition to a more resilient, flexible, and sustainable grid.”Continue Reading FERC Proposes Rules to Remove Barriers to Electric Storage and Other Distributed Resources