Electricity Markets

Association argues FERC should dismiss flow battery proposal

A petition for a declaratory order that asks the Federal Energy Regulatory Commission to find that it would have jurisdiction over a plan that calls for the transport of an electrolyte discharged from a flow battery across state lines should be turned aside by the Commission because it does not present an appropriate case for a declaratory ruling, the American Public Power Association said.

If FERC chooses not to dismiss the petition filed by Alternative Transmission Inc. (ATI) outright, it should conclude that ATI has failed to demonstrate that the services described in the petition provide “transmission of electric energy in interstate commerce” or that ATI’s facilities will be jurisdictional transmission facilities, the Association said in its June 3 filing (Docket No. EL19-69-000).

Details on ATI petition

ATI in May filed a petition for declaratory order at FERC describing an “alternative transmission process” in which a flow battery would first be charged with electrical energy, then the electrolyte from the flow battery would be removed and transported across state lines by rail, truck, boat, or airplane (or some combination thereof). As the last step in the process, the electrolyte would be placed into a flow battery at another location and converted back to electrical energy available for dispatch. 

ATI sought a ruling by the Commission that the alternative transmission facilities and services described in the petition provide “transmission of electric energy in interstate commerce” subject to the Commission’s jurisdiction under Parts II and III of the Federal Power Act (FPA) and that ATI as the owner or operator of the described facilities will be a “public utility” under Parts II and III of the FPA.  ATI argued that that the FPA does not expressly restrict FERC’s jurisdiction over transmission of electric energy to energy moved by wires.

Association argues for dismissal of petition 

The Association noted in its June 3 filing that it supports new technologies and innovation in the production and delivery of energy to consumers and said increased use of mobile energy storage certainly may prove to be an innovative aspect of the modern energy landscape.

But the Association disagrees that ATI’s petition serves to establish a “new paradigm” in jurisdictional transmission.

“The petition is insufficiently developed and, at best, premature,” the public power trade group said.  “Virtually no information is provided about ATI itself, let alone any indication that it would have the resources to implement the kinds of services discussed in the petition.”

ATI also failed to sufficiently demarcate the facilities that would be deemed jurisdictional transmission facilities under its “alternative transmission” process, the Association told FERC. 

“ATI’s services that would allegedly constitute interstate transmission are only generally described in the petition, and appear at this point to be purely aspirational. The declarations requested by ATI, moreover, are potentially sweeping in scope and broadly applicable, yet are not grounded in any concrete proposal or specific facts and circumstances.”

For these reasons, the Commission should dismiss the petition without addressing the jurisdictional issues raised by ATI, the Association said.

If the Commission does not dismiss the petition outright, it should conclude that ATI has failed to demonstrate that the services described in the petition provide “transmission of electric energy in interstate commerce” within the meaning of FPA section 201, or that ATI’s facilities will be jurisdictional transmission facilities, the Association went on to say.

The petition “does not establish that ATI would be moving ‘electric energy’ as that term is used in FPA section 201.  Further, while ATI is correct that the FPA does not specifically make reference to transmission by wire, the petition’s legal analysis does not adequately support an interpretation of FPA section 201 that extends Commission jurisdiction to the ‘alternative transmission’ services and facilities described in the petition.”

Moreover, ATI fails to “tackle the legal and practical complications that granting its petition would present – including the potential impingement upon other federal regulatory schemes – were the Commission to accept ATI’s jurisdictional arguments.”

The Association noted that its concerns with the legal declarations requested by ATI should not be interpreted as opposition to portable storage services generally. “Mobile energy storage systems may be an innovation that can bring value to energy consumers.  Nor does APPA necessarily take the position that transmission of electric energy by wire is the only conceivable form of energy transmission that could be subject to the Commission’s jurisdiction under FPA section 201.”

ATI has not demonstrated, however, that the Commission should make a finding that the services and facilities generally described in the Petition provide transmission of electric energy in interstate commerce within the meaning of the FPA, the public power group said.

Other parties also question petition

Other parties also raised concerns about the ATI petition including Edison Electric Institute and the Electric Power Supply Association (EPSA).

“EPSA opposes ATI’s requested relief in its filing because the services and/or products to be offered are not sufficiently defined and the petition does not include adequate detail or a sound legal basis for the requested preliminary determination,” EPSA said.

“In the absence of this information, EPSA has concerns that the technology and facilities described represent or include storage resources and capabilities, which are properly considered generation assets not transmission.”

Texas PUC, ERCOT say petition raises jurisdictional issues

The Public Utility Commission of Texas (PUCT) and the Electric Reliability of Council of Texas (ERCOT) argued that the ATI petition raises jurisdictional issues that could impact ERCOT in particular.

The PUCT said that if the Commission were to declare that ATI is transmitting electric energy in interstate commerce, and the company were to build and operate the transfer stations within ERCOT, and also build such stations in other parts of Texas outside ERCOT and/or in other states, the ERCOT grid as a whole might be deemed to contain electric energy transmitted in interstate commerce without the protection of a Commission order under Sections 210 and 211 of the FPA.

This could arguably subject ERCOT, and utilities operating in ERCOT, to new Commission regulation as “public utilities” under FPA Section 201(e), contrary to the Commission’s longstanding jurisdictional divide involving ERCOT, the state commission went on to say.

“Thus, the proposal raises significant jurisdictional concerns that require full consideration if the Commission were to consider addressing ATI’s declaratory order request.”

ERCOT said that ATI does not address how its proposal may be reconciled with existing Texas state jurisdiction and the responsibilities that Texas has entrusted to ERCOT. Although it is unclear where ATI plans to interconnect its facilities, if such facilities were to be interconnected with the ERCOT grid, FERC would need to issue orders under Sections 210 and 211 of the FPA to avoid bringing ERCOT and ERCOT-interconnected utilities into interstate commerce or subjecting those entities to FERC’s public utility jurisdiction, ERCOT said.

The grid operator said that regardless of whether ATI’s proposed innovation or technology has merit, “it would be inappropriate to depart from the plain language of the FPA and substantial judicial and agency precedent, and create uncertainty regarding jurisdictional responsibilities in a proceeding on a petition for declaratory order, particularly one as thinly-supported as ATI’s.”