Electricity Markets

Grid operators file storage participation plans with FERC

Regional transmission organizations and independent system operators have submitted filings at the Federal Energy Regulatory Commission outlining how they will ensure that electric storage resources are able to participate in their markets.

The Dec. 3 filings were submitted in compliance with FERC Order No. 841, which was issued earlier this year and was aimed at removing barriers to electric storage resources participating in the capacity, energy and ancillary services markets operated by RTOs and ISOs. Implementation of proposed tariff changes, if approved by FERC, will be required by December 3, 2019.

Comments on the compliance filings are due on February 7, following FERC’s granting of a motion for an extension of time that had been filed by a group of renewable energy and storage industry associations. PJM’s accounting proposal will have an earlier comment deadline of January 4.

In the RTO/ISO Order 841 compliance filings, which were submitted on Dec. 3, grid operators noted that in some instances they have already taken steps to implement mandates outlined by FERC Order No. 841. In those areas where the grid operators need to take additional steps to comply with Order 841, the RTOs and ISOs propose tariff revisions needed in order to implement the requirements of the final rule.

Details on Order 841

Order 841 required each RTO/ISO to revise its tariffs to establish a participation model for electric storage resources if it has not already done so.

The participation model must:

  • Ensure that a storage resource is eligible to provide all capacity, energy, and ancillary services that it is technically capable of providing;
  • Ensure that a storage resource can be dispatched and can set the wholesale market clearing price as both a wholesale seller and wholesale buyer;
  • Account for the physical and operational characteristics of storage resources through bidding parameters or other means; and
  • Establish a minimum size requirement for participation that does not exceed 100 kW.

Additionally, each RTO/ISO must specify that the price for sale of electric energy from the wholesale markets to an electric storage resource that the resource then resells back to those markets must be set at the wholesale locational marginal price.

RTOs and ISOs that submitted filings at FERC in response to Order 841 were: the California Independent System Operator, New York Independent System Operator, Southwest Power Pool, the PJM Interconnection, the Midcontinent Independent System Operator and ISO New England.


In its filing, CAISO said its tariff and market design already satisfy the vast majority of Order No. 841’s requirements.

For example, the California grid operator noted that Order 841 requires each RTO/ISO to include a participation model consisting of market rules that, recognizing the physical and operational characteristics of electric storage resources, facilitates their participation in the RTO/ISO markets.

CAISO said its existing tariff and practices comply with these requirements, noting that most of its participation models are not technology specific. “For example, the majority of CAISO generators use the generic ‘Participating Generator’ model.  Different technology and fuel types may enter different master file parameters for modeling, forecasting, ramping, and dispatch purposes, but the CAISO markets do not distinguish among Participating Generators for settlement, bid-cost recovery, or the ability to set the marginal price,” CAISO said.

At the same time, the California grid operator had in March sought clarification, or rehearing in the alternative, on three issues in Order No. 841: (1) whether scheduling coordinators can directly meter storage resources; (2) whether RTO/ISOs must forego settling storage resources for charging where the retail utility refuses to provide wholesale treatment; and (3) whether charging pursuant to economic dispatch provides a grid service such that RTO/ISOs should not assess transmission charges.

CAISO said that if FERC accepts its compliance filing, the CAISO’s prior clarification/rehearing request will be moot, and the Commission will therefore not need to address it.


Meanwhile, NYISO in its filing detailed existing participation opportunities for electric storage facilities in the NYISO-administered markets.

For example, the New York grid operator noted that electric storage facilities can currently participate in the NYISO-administered energy, ancillary services, and installed capacity markets under various existing participation models of generators, energy limited resources or “ELRs,” limited energy storage resources or “LESRs,” or as a component of a demand side resource in certain demand response programs. 

Despite these participation opportunities, the NYISO does not currently have a single, consolidated participation model like the one proposed in its compliance filing, the grid operator told FERC.

The NYISO proposes to establish a participation model for energy storage resources to facilitate these entities’ participation in the NYISO-administered energy, ancillary services and installed capacity markets. Because the NYISO is currently exploring with its stakeholders the aggregation and dual participation of storage resources in wholesale and retail markets, Energy Storage Resources will not be permitted to aggregate or engage in dual participation until the tariff changes permitting such actions become effective, which may include “new or additional generally applicable minimum run-time obligations.”

Energy storage resources will be a subset of generators under the NYISO tariffs.  To be eligible to be an energy storage resource, an electric storage facility must satisfy the qualification requirements to be a generator under the NYISO tariffs and certain additional qualification requirements that account for the physical and operational characteristics of electric storage facilities, the directives of Order No. 841, and the capabilities of the NYISO’s markets and settlements software.  

The NYISO has revised its registration requirements and market rules to integrate energy storage resources into its existing market and settlements constructs to ensure, to the extent possible, comparable treatment of energy storage resources and other participants in the NYISO-administered markets. The NYISO’s proposed revisions remove barriers to entry for the participation of energy storage resources based on their physical and operational characteristics, the grid operator said.

Electric storage facilities that cannot satisfy the qualification requirements for energy storage resources, or that can separately satisfy the qualification requirements of energy storage resources and other participation models, may elect to participate in the NYISO-administered markets through existing participation models that accommodate their physical and operational characteristics (e.g., as energy limited resources).

The NYISO noted that it has revised its installed capacity market requirements to allow energy storage resources to spread their full capability over four hours to meet the minimum four consecutive hour run time qualification requirement. This provision complies with FERC’s directive that the RTOs and ISOs allow electric storage resources to de-rate their capacity to meet output duration requirements. The NYISO also proposed to apply their current buyer-side mitigation rules to new storage resources.

An electric storage facility participating in the NYISO’s energy storage resource participation model may submit bids to withdraw and inject energy, can self-schedule megawatts to withdraw and inject energy, and can set the wholesale market clearing prices when injecting and when withdrawing.  

Energy storage resources will be required to be dispatchable when they are physically available.  The NYISO’s proposed tariff revisions treat Energy Storage Resources as “dispatch only.” 

Electric storage facilities using the participation model will be modeled as available and ready for dispatch whenever bids are submitted and will be permitted to submit an incremental bid-curve representing the entire range of the energy storage resource’s capability. 

Modeling each energy storage resource as a single resource in the wholesale market with a bid-curve that represents the entire operating range from injection to withdrawal will prevent the energy storage resource from being dispatched to withdraw and inject in the same interval, the grid operator said. 

The NYISO has also clarified that withdrawals of energy that are stored for later injection back to the grid are treated as “negative generation,” and are part of the supply stack.  As supply, energy withdrawals will be settled at the applicable generator bus locational based marginal price and will be able to set the market clearing price.

In addition, an electric storage facility using the NYISO’s energy storage resource participation model may participate as an installed capacity supplier in the NYISO’s Installed capacity market and set the market clearing prices in the NYISO-administered strip, monthly, and spot market auctions.

The NYISO has also established new registration and bidding parameters that recognize the physical and operational characteristic of energy storage resources. It said the new parameters are comparable to those specified in Order 841, with the exception of the minimum and maximum run time and minimum and maximum charge time parameters. 

Instead of using the identified run time parameters, the NYISO proposes to use each energy storage resource’s “beginning energy level,” which is further defined in the filing, and roundtrip efficiency to ensure that both day-ahead and real-time schedules are feasible. In addition, an electric storage facility using the energy storage resource participation model may submit the applicable physical and operational characteristics included in the bidding parameters for both its day-ahead market bids and real-time market bids.

The NYISO requested an extension of the deadline for compliance until May 1, 2020, because the software platform upon which the proposed revisions will be implemented is currently undergoing a significant upgrade.


SPP said that while Order 841 required that a participation model be created for electric storage resources, the Commission clarified that ESRs are not required to participate in the market under this participation model.

In order to clearly identify ESRs choosing to participate in the market under the participation model, SPP created a resource registration type called Market Storage Resources (MSR). This design is adopted so that a distinction can be made between ESRs that choose to participate under the specific participation model (i.e., MSR) under which only ESRs can participate, and ESRs that choose to participate under an existing model.

To accommodate the generation less than 100 kW on the distribution system, SPP stated that aggregation of storage is permitted, and is limited to the nodal delivery point. SPP said the addition of the MSR resource registration type, which will require significant changes to the SPP tariff and to market systems, will accomplish three things not currently available in SPP:

  • Add the functionality for SPP to dispatch the MSR to withdraw energy from the market;
  • Include the physical and operational characteristics of MSRs in the market dispatch; and
  • Clarify that transmission charges will not apply for MSR withdrawals when those withdrawals are a result of the MSR responding to a dispatch instruction from SPP.

SPP noted that its current rules do not preclude an LSE from designating an ESR to meet the Resource Adequacy requirements provided it meets the continuous run time requirement applicable to all resource types.

SPP wants FERC to issue an order on its filing by March 1, 2019. “Implementation of the tariff revisions filed here require changes to software, internal procedures, and operator training, all of which must be finalized well in advance of the requested effective date if SPP is to implement these revisions on that date,” it said.

SPP said that implementation of the revisions proposed in the filing is estimated to cost SPP alone in excess of $800,000, “and the magnitude of the effort requires major software and process changes to core SPP systems. Such material changes also demand the time of key resources that would otherwise be engaged with other market implementation initiatives. This impact does not include the corresponding substantial costs to individual stakeholders.”


MISO told FERC in its compliance filing that it has revised Module A of its tariff to include the required definition of ESRs.

The proposed ESR definition contains all required elements specified in Order 841, MISO said, and is supplemented by key features of MISO’s proposed implementation of ESR market participation model.

The ESR definition principally defines an ESR as a resource capable of receiving energy from the transmission system and storing it for later injection of energy back to the transmission system, while emphasizing technology neutrality with regard to type and medium of storage.

“To this end, the definition includes all technologies and/or storage mediums, including but not limited to, batteries, flywheels, compressed air, and pumped-hydro,” MISO said.

The location of an ESR may be at any point of grid interconnection, on either the transmission system or a local distribution system. 

The grid operator said that it is establishing a participation model that facilitates ESR participation in MISO’s energy and operating reserve markets.

The participation model “will provide unique modeling, offer parameters, operating limitations and settlement provisions to allow an ESR to participate in MISO’s markets as supply and demand, set market clearing prices as either supply or demand, and provide energy and ancillary service products through a customized offer structure that incorporates and supplements Order No. 841’s required parameters, enabling State of Charge management by the Market Participant.”

According to MISO’s filing, ESRs will be able to provide Capacity to the extent they are able to operate for a minimum of four consecutive operating hours across the daily coincident peak for each day.

In instances where MISO has not revised the tariff to specifically address ESR participation, existing tariff provisions describing technical and performance requirements for market services and products applicable to other types of resources will also apply to ESRs.


ISO-NE was joined by the New England Power Pool (NEPOOL) Participants Committee in its compliance filing (referred to as the compliance package). In submitting revisions to the Open Access Transmission Tariff (OATT), the grid operator and NEPOOL Participants Committee were joined by the Participating Transmission Owners Administrative Committee on behalf of participating transmission owners.

The compliance package is made up of three distinct sets of rules. First, the package includes existing, long-standing market rules. These provisions are unchanged by the compliance package, and in many cases serve as its foundation.

For example, the package encompasses the existing tariff provisions that establish and govern the behavior of dispatchable generators, dispatchable load assets, and regulation market resources, as well as the provision of capacity, energy, reserves, and regulation by those resources and the functioning of the relevant markets themselves.

Second, the package includes a large number of market rules that were jointly filed by ISO-NE and NEPOOL in October 2018 in an enhanced storage participation filing. That filing introduced electric storage facility rules that form the backbone of the participation model for electric storage resources mandated by the Commission in Order 841, the filing said.

Third, the compliance package introduces new tariff revisions that allow any qualifying technology type to participate as a binary storage facility -- eliminating the restriction that allowed only pumped-storage hydroelectric facilities to participate pursuant to those rules; allow electric storage facilities as small as 0.1 MW to provide energy, reserves, and regulation; and eliminate the allocation of transmission charges to electric storage resources in certain circumstances.

These three sets of rules were presented as a unified package and together fully meet the requirements of Order 841, ISO-NE and the NEPOOL Participants Committee said.

Under the ISO-NE tariff, there are two categories of storage resources: Continuous Storage Facilities and Binary Storage Facilities. Continuous storage must be capable of switching between a charging and discharging state rapidly and continuously and capable of operating in an on-line state at all times. According to ISO-NE, this type of storage facility “is optimized for energy and reserves by being ‘committed’ (i.e., turned ‘on’) at 0 MW as its default state. (It is therefore neither committed nor de-committed by the ISO-NE unit commitment software).”


For its part, PJM submitted two filings at FERC, one of which details PJM’s proposed ESR participation model and a second one that involves metering, accounting and market settlement issues, referred to as the accounting proposal. PJM said that its ESR participation model is designed to ensure that ESRs are eligible to provide services in a manner consistent with other resources providing that service. 

“While some ESRs have characteristics that render them unique as compared to other resources, PJM evaluated each of its available market services to determine not only whether changes would be needed to allow ESRs to effectively participate, but also how ESRs should be treated to ensure their eligibility did not result in preferential treatment or undue discrimination.”

PJM said that its capacity, energy and ancillary services markets offer a number of products that participating resources can provide to serve load and to ensure the reliability of the electric grid. 

“Although ESRs are currently eligible to provide services in each of these markets, the ESR participation model explicitly addresses each available product to ensure that ESRs are eligible to provide all services which they are technically capable of providing,” PJM told the Commission.

 Specifically, modifications to various aspects of PJM’s capacity, energy and ancillary services markets were not necessary to implement the proposed ESR participation model, it said, including:

  • The capacity must-offer requirement;
  • Determination of capacity value;
  • The day-ahead energy market must-offer requirement;
  • Determining performance under capacity performance rules;
  • Providing a “non-energy” resource option in the regulation market;
  • Rules governing reactive supply and reactive service;
  • Requirements for black start service;
  • Real-time telemetry requirements; and
  • Rules governing sales at LMP

At the same time, PJM said that its review of its markets and operations, along with stakeholder input, revealed that certain changes are needed to fully support the ESR participation model required by Order No. 841.

Those changes include, among other things:

  • Modal Operation in Energy Markets: PJM proposes to allow ESRs to participate in the day-ahead and real-time energy markets under three different modes -- continuous mode, charge mode and discharge mode. “This feature provides significant flexibility and allows market participants of ESRs to best manage a resource’s changing and discharging cycles,” PJM said;
  • Make-Whole Payments:  PJM proposes to allow ESRs to receive make-whole payments when moved off economic dispatch; and
  • Cost-Based Offers:  PJM proposes to continue to apply the same offer development rules applied to all generation resources.  PJM proposes to modify the Operating Agreement to clarify that ESR fuel costs include charging costs for later injection to the grid.

PJM explained that ESRs that transact solely with PJM, will be limited to purchasing from and selling back in to PJM.  But, ESRs that are behind the customer meter or otherwise able to directly serve retail load may not, in some cases, resell that energy to PJM.  PJM notes that such sales “do not constitute sales for resale in interstate commerce as contemplated by Order No. 841.” PJM’s accounting proposal addresses how to account for these two groups of transactions by ESRs.

PJM proposed to revise the definition of “Capacity Storage Resource” to include all ESRs, which would be exempt from the capacity must-offer requirement but permitted to participate as a stand-alone capacity performance resource and may participate in the capacity auctions up to their capacity value.  The capacity value of a storage resource in PJM is based on their discharge/output capability over ten hours of sustained continuous operation – longer than any of the other RTO storage capacity requirements.

PJM asked the Commission to issue an order by May 30, 2019, on the requested revisions requested herein.  It said the requested May 30, 2019 order will ensure that PJM has sufficient time to make necessary system changes in order to effectuate the deadline of December 3, 2019, required by Order 841.

The grid operator is seeking an effective date of February 3, 2019 for its ESR accounting proposal. 

The proposal includes proposed definitional changes to allow PJM to test its proposed accounting methodologies and gather sufficient data prior to full deployment of the ESR participation model. 

Because PJM is seeking an earlier effective date for the ESR accounting proposal to facilitate successful deployment of the ESR participation model than the other requested changes, PJM has divided the ESR Participation Model into two separate filings to allow the Commission to independently review and grant the ESR accounting proposal on an expedited basis.