Energy Storage

Energy storage in markets: Four guiding principles

While we at the American Public Power Association generally support the Federal Energy Regulatory Commission's efforts to allow energy storage and distributed energy resources to participate in wholesale markets, we also believe that FERC should keep its primary focus on the end result to electricity customers and maintain respect for state and local regulatory authority.

Those were two key messages the Association delivered to FERC in response to a notice of proposed rulemaking on participation in organized wholesale markets by electric storage resources and distributed energy resource aggregators.

"We urge the commission to maintain as its primary focus efforts to allow electric storage and distributed energy resources to participate in organized wholesale markets for the benefit of end-use consumers," we said in Feb. 13 comments we filed along with the National Rural Electric Cooperative Association.

Our comments included these four guiding principles on energy storage resources:
• Maintain focus on end-use customers. In removing barriers to entry for storage and distributed energy resources, FERC must move toward markets that produce just and reasonable rates for customers.
• Accommodate existing technology. FERC's efforts should not threaten existing projects or hamper technological advances.
• Protect against double-recovery and cross-subsidies. Providers of storage or DER must not be able to recover their costs twice — at both cost- and market-based rates — or gain access to cross-subsidies. One class of customers should not be put in a position of subsidizing another.
• Respect state and local regulatory authority. The final rule must not undercut the ability of state and local bodies to regulate existing and future storage and/or distributed energy projects connected to local distribution systems. This is important for reliability, security and safety, as well as the cost to customers.

Public power utilities of all sizes are already actively engaged in a wide range of innovative distributed energy and energy storage projects across the country.

At the end of the day, FERC deserves credit for recognizing the growing significance of storage and distributed energy resources and taking steps to figure out how those resources can participate in wholesale power markets.
We hope the commission will follow the principles we've outlined in our comments as it crafts any final rule in the proceeding.