U.S. energy regulators have issued a final rule designed to help electric storage resources participate in the capacity, energy and ancillary services markets operated by regional grid operators. The Federal Energy Regulatory Commission said its Order No. 841 would remove barriers to the participation of electric storage resources in wholesale markets operated by regional transmission organization and independent system operators.
Electricity storage technologies have been around for some time, and some technologies like pumped hydropower storage have been deployed on a significant scale -- but new electric technologies are developing on top of these traditional technologies. New England's regional grid operator recently cited fast-responding energy storage devices as among the new technologies entering its markets. Many states have recognized the opportunities created by storage, and are enacting incentives to support its development and integration into microgrids. At the same time, regulators are grappling with how to fit energy storage resources into existing markets and incentive programs, like retail net metering.
The Federal Energy Regulatory Commission has considered electric storage for some time, including stakeholder workshops, data requests, and technical conferences. The Commission expressed concerns that barriers to electric storage resources participation in organized wholesale markets could lead to unjust and unreasonable wholesale electricity rates. In November 2016, the Commission proposed a rule to facilitate electric storage resources' participation in organized wholesale markets. In January 2017, the Commission issued a policy statement addressing how electric storage resources may provide services at a mix of cost-based and market-based rates.
In issuing Order No. 841 on February 15, 2018, the Commission adopted a final rule requiring each RTO and ISO to revise its tariff to establish a "participation model" for electric storage resources. As envisioned by the Commission, these participation models will consist of market rules that facilitate electric storage resources' participation in organized wholesale markets, while recognizing storage resources' physical and
operational characteristics.
The new rule provides that each RTO and ISO must adopt its own participation model for electric storage resources, within certain guidelines. First, the participation model must ensure that storage resources using it are eligible to
provide all capacity, energy, and ancillary services they are technically capable of providing. Second, the participation model must ensure that participating storage resources can be dispatched and
can set the wholesale market clearing price as both a wholesale seller
and wholesale buyer, consistent with rules that govern the conditions
under which a resource can set the wholesale price. Third, the participation model must account for the
physical and operational characteristics of electric storage resources
through bidding parameters or other means Fourth, it must a minimum
size requirement for participation in the RTO and ISO markets that does
not exceed 100 kW.
The rule also requires that the sale of
electric energy from the RTO or ISO market to an electric storage
resource that the resource then resells back to those markets must be at
the wholesale locational marginal price.
In an accompanying statement, Commissioner LaFleur described electric storage as "like a 'Swiss army knife' that can serve customers in multiple ways," including including providing energy, particularly
in conjunction with variable renewable generation (example: Deepwater Wind has proposed offshore wind plus storage in response to the pending Massachusetts offshore wind solicitation) as well as providing frequency regulation and other ancillary services, and helping defer
distribution and transmission needs. Commissioner Powelson noted its consistency with the Commission's "longstanding commitment to fostering innovation and competition by
reducing and eliminating barriers to entry." Commissioner Glick said Order No. 841 "will facilitate the development of a class of technologies—ranging from batteries to pumped hydro—that has the
potential to play a leading role in the transition to the electricity
system of the future, but that has heretofore been hindered by market
rules that were designed primarily to accommodate more conventional
means of electric generation."
Once it takes effect, the final rule gives RTOs and ISOs 270 days to develop and file their proposed rule changes, and a year for their implementation.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label NOPR. Show all posts
Showing posts with label NOPR. Show all posts
FERC grid reliability and resilience pricing questions
Tuesday, October 10, 2017
U.S. energy regulators have asked for public comment on a rule proposed by the Secretary of Energy that would require organized grid operators to pay certain electric generators for their grid reliability and resilience benefits.
On September 28, 2017, Secretary of Energy Rick Perry directed the Federal Energy Regulatory Commission to consider a proposed rule on an expedited basis. The proposed rule defines an "eligible grid reliability and resiliency resource" based on criteria including the ability to provide essential energy and ancillary reliability services and to have a 90-day fuel supply on site enabling it to operate during an emergency, extreme weather conditions, or a natural or man-made disaster. It would requires independent system operators and regional transmission organizations to establish a tariff that provides a " just and reasonable rate" for the purchase of electric energy from such resources including recovery of costs and a return on equity
On October 2, the Commission issued a Notice Inviting Comments, asking interested persons to submit comments regarding the proposal on or before October 23, 2017. Two days later, Commission staff followed up with a series of questions for public comment. Questions in that document cover topics including the need for reform, eligibility, implementation, and rates, as well as impacts on consumers.
Some questions posed by the Commission staff in its October 4, 2017 document are general, such as, "What is resilience, how is it measured, and how is it different from reliability? What levels of resilience and reliability are appropriate?" Others ask for whether commenters agree with references in the proposed rule to the 2014 "Polar Vortex" and "other extreme weather events, specifically hurricanes Irma, Harvey, Maria, and superstorm Sandy," as well as "the retirement of coal and nuclear resources and a concern from Congress about the potential further loss of valuable generation resources" as justifying the need for action.
As previously noticed by the Commission, initial comments on the proposed Grid Reliability and Resilience Pricing Rule in Docket No. RM18-1-000 are due on or before October 23, 2017 and reply comments due on or before November 7, 2017.
On September 28, 2017, Secretary of Energy Rick Perry directed the Federal Energy Regulatory Commission to consider a proposed rule on an expedited basis. The proposed rule defines an "eligible grid reliability and resiliency resource" based on criteria including the ability to provide essential energy and ancillary reliability services and to have a 90-day fuel supply on site enabling it to operate during an emergency, extreme weather conditions, or a natural or man-made disaster. It would requires independent system operators and regional transmission organizations to establish a tariff that provides a " just and reasonable rate" for the purchase of electric energy from such resources including recovery of costs and a return on equity
On October 2, the Commission issued a Notice Inviting Comments, asking interested persons to submit comments regarding the proposal on or before October 23, 2017. Two days later, Commission staff followed up with a series of questions for public comment. Questions in that document cover topics including the need for reform, eligibility, implementation, and rates, as well as impacts on consumers.
Some questions posed by the Commission staff in its October 4, 2017 document are general, such as, "What is resilience, how is it measured, and how is it different from reliability? What levels of resilience and reliability are appropriate?" Others ask for whether commenters agree with references in the proposed rule to the 2014 "Polar Vortex" and "other extreme weather events, specifically hurricanes Irma, Harvey, Maria, and superstorm Sandy," as well as "the retirement of coal and nuclear resources and a concern from Congress about the potential further loss of valuable generation resources" as justifying the need for action.
As previously noticed by the Commission, initial comments on the proposed Grid Reliability and Resilience Pricing Rule in Docket No. RM18-1-000 are due on or before October 23, 2017 and reply comments due on or before November 7, 2017.
FERC invites comment on grid reliability and resilience pricing proposal
Thursday, October 5, 2017
U.S. electricity regulators have invited public comment on a draft rule proposed by the Secretary of Energy that would require some grid operators to buy electricity from certain generators at rates that allow the generators to recover their costs and a return on equity. The Secretary has set the grid resiliency pricing rulemaking proceeding on a fast track -- but some energy industry associations have asked regulators to allow more time for public participation before finalizing "a proposed rule that could affect electricity prices paid by hundreds of millions of consumers and hundreds of thousands of businesses, as well as entire industries and their tens of thousands of workers."
On September 28, Secretary Perry directed the Federal Energy Regulatory Commission to open an expedited rulemaking proceeding to consider a proposed rule affecting the compensation paid to certain "grid reliability and resiliency resources" with a 90-day fuel supply on site and capable of providing "essential energy and ancillary reliability services, including but not limited to voltage support, frequency services, operating reserves, and reactive power."
Acting under Section 403 of the Department of Energy Organization Act, Secretary Perry directed the Commission to consider and complete final action on his proposed rule proposed within 60 days. But he also suggested that circumstances warrant faster action -- such as issuing the proposed rule as an interim final rule, effective immediately, with provision for later modifications after consideration of public comments.
On October 2, the Commission issued a Notice Inviting Comments in Docket No. RM18-1-000. That notice invited interested persons to submit comments regarding the proposal on or before October 23, 2017, with reply comments due on or before November 7, 2017.
Also on October 2, a coalition of energy industry associations filed a joint motion asking the Commission to take more time in its consideration of the proposed grid resiliency pricing proposed rule or "NOPR". In that joint motion, the associations note that no emergency or other circumstance exists which justifies the use of an interim final rule. They cite the "importance and potential implications of the NOPR for Commission-jurisdictional markets," calling it "one of the most significant proposed rules in decades related to the energy industry." The associations argue that because the time limits set by the Secretary are "unreasonable," so the Commission should set its own timeline allowing more time for participation.
The energy industry associations who filed the joint motion represent a fairly broad slice of the energy sector. Participating associations include Advanced Energy Economy, American Council on Renewable Energy, American Petroleum Institute, American Wind Energy Association, American Public Power Association, Electric Power Supply Association, Electricity Consumers Resource Council, Interstate Natural Gas Association of America, National Rural Electric Cooperative Association, Natural Gas Supply Association, and Solar Energy Industries Association.
The grid resiliency pricing rule proceeding continues before the Commission.
On September 28, Secretary Perry directed the Federal Energy Regulatory Commission to open an expedited rulemaking proceeding to consider a proposed rule affecting the compensation paid to certain "grid reliability and resiliency resources" with a 90-day fuel supply on site and capable of providing "essential energy and ancillary reliability services, including but not limited to voltage support, frequency services, operating reserves, and reactive power."
Acting under Section 403 of the Department of Energy Organization Act, Secretary Perry directed the Commission to consider and complete final action on his proposed rule proposed within 60 days. But he also suggested that circumstances warrant faster action -- such as issuing the proposed rule as an interim final rule, effective immediately, with provision for later modifications after consideration of public comments.
On October 2, the Commission issued a Notice Inviting Comments in Docket No. RM18-1-000. That notice invited interested persons to submit comments regarding the proposal on or before October 23, 2017, with reply comments due on or before November 7, 2017.
Also on October 2, a coalition of energy industry associations filed a joint motion asking the Commission to take more time in its consideration of the proposed grid resiliency pricing proposed rule or "NOPR". In that joint motion, the associations note that no emergency or other circumstance exists which justifies the use of an interim final rule. They cite the "importance and potential implications of the NOPR for Commission-jurisdictional markets," calling it "one of the most significant proposed rules in decades related to the energy industry." The associations argue that because the time limits set by the Secretary are "unreasonable," so the Commission should set its own timeline allowing more time for participation.
The energy industry associations who filed the joint motion represent a fairly broad slice of the energy sector. Participating associations include Advanced Energy Economy, American Council on Renewable Energy, American Petroleum Institute, American Wind Energy Association, American Public Power Association, Electric Power Supply Association, Electricity Consumers Resource Council, Interstate Natural Gas Association of America, National Rural Electric Cooperative Association, Natural Gas Supply Association, and Solar Energy Industries Association.
The grid resiliency pricing rule proceeding continues before the Commission.
FERC proposes FAST Act CEII rules
Friday, June 17, 2016
The Federal Energy Regulatory Commission has proposed amending its regulations designed to protect critical information about utility infrastructure. If adopted, the new regulations would govern the treatment of Critical Energy/Electric Infrastructure Information (CEII) whose disclosure and misuse could put the electric grid at risk.
In the wake of the September 11, 2011 terrorist attacks, the Commission took steps to identify and protect sensitive information it considered "Critical Energy Infrastructure Information," or CEII. In general, FERC defined CEII as specific engineering, vulnerability, or detailed design information about proposed or existing critical infrastructure (physical or virtual) that:
But last year, Congress weighed in on the protection of certain sensitive information about infrastructure. The Fixing America's Surface Transportation (FAST) Act, signed into law on December 4, 2015, included provisions designed to improve the security and resilience of energy infrastructure in the face of emergencies. In particular, the FAST Act added section 215A to the Federal Power Act, directing the Commission to issue regulations covering the security and sharing of "Critical Electric Infrastructure Information."
Federal Power Act section 215A(a)(3) defines the new term Critical Electric Infrastructure Information as:
On June 16, 2016, the Commission issued a Notice of Proposed Rulemaking, proposing to amend its regulations to implement the provisions of the FAST Act pertaining to the designation, protection and sharing of critical electric infrastructure information, and also proposing to amend its existing regulations pertaining to CEII. The proposed changes include criteria and procedures for designating information as CEII, a specific prohibition on unauthorized disclosure of that information, and sanctions for knowing and willful wrongful disclosure of CEII by federal personnel.
Comments on the Notice of Proposed Rulemaking are due 45 days after its publication in the Federal Register.
In the wake of the September 11, 2011 terrorist attacks, the Commission took steps to identify and protect sensitive information it considered "Critical Energy Infrastructure Information," or CEII. In general, FERC defined CEII as specific engineering, vulnerability, or detailed design information about proposed or existing critical infrastructure (physical or virtual) that:
- Relates details about the production, generation, transmission, or distribution of energy;
- Could be useful to a person planning an attack on critical infrastructure;
- Is exempt from mandatory disclosure under the Freedom of Information Act; and
- Gives strategic information beyond the location of the critical infrastructure.
But last year, Congress weighed in on the protection of certain sensitive information about infrastructure. The Fixing America's Surface Transportation (FAST) Act, signed into law on December 4, 2015, included provisions designed to improve the security and resilience of energy infrastructure in the face of emergencies. In particular, the FAST Act added section 215A to the Federal Power Act, directing the Commission to issue regulations covering the security and sharing of "Critical Electric Infrastructure Information."
Federal Power Act section 215A(a)(3) defines the new term Critical Electric Infrastructure Information as:
information related to critical electric infrastructure, or proposed critical electrical infrastructure, generated by or provided to the Commission or other Federal agency, other than classified national security information... Such term includes information that qualifies as critical energy infrastructure information under the Commission’s regulations.As interpreted by the Commission, this encompasses "not only information regarding the Bulk-Power System but also information regarding other energy infrastructure (i.e., gas pipelines, LNG, oil, and hydroelectric infrastructure) to the extent such information qualifies as Critical Energy Infrastructure Information under the Commission’s current regulations. "
On June 16, 2016, the Commission issued a Notice of Proposed Rulemaking, proposing to amend its regulations to implement the provisions of the FAST Act pertaining to the designation, protection and sharing of critical electric infrastructure information, and also proposing to amend its existing regulations pertaining to CEII. The proposed changes include criteria and procedures for designating information as CEII, a specific prohibition on unauthorized disclosure of that information, and sanctions for knowing and willful wrongful disclosure of CEII by federal personnel.
Comments on the Notice of Proposed Rulemaking are due 45 days after its publication in the Federal Register.
FERC considers bulk electric system definition
Thursday, July 5, 2012
In a society dependent on electricity for many essential and desired services, maintaining the reliability of the electric grid bears increased importance. From hospitals and home heating to business operations, "keeping the lights on" has become a matter of national significance. How electric reliability is regulated is the subject of an ongoing administrative case noticed in today's Federal Register.
At the federal level, chief regulatory responsibility for electric reliability falls on the Federal Energy Regulatory Commission. Following the August 2003 blackout, when 50 million people lost power in the U.S. and Canada, Congress authorized the creation of an “electric reliability organization” to manage the reliability of the North American bulk power system.
Today, that organization is the North American Electric Reliability Corporation (NERC). NERC's mission is to ensure the reliability of the North American bulk power system. To achieve this mission, NERC establishes and enforces reliability standards for the bulk power system.
In 2010, FERC issued Order No. 743 (104-page PDF), which ordered NERC to revise its definition of the "bulk electric system" -- a specific subset of the bulk power system. Historically, that term has been defined differently by each of each of eight regional entities. In Order No. 743, FERC recognized concerns arising from inconsistencies among these regional definitions, and recommended replacing the regional entities' discretion to define the "bulk electric system" with a bright line threshold. This bright line standard would include all facilities operated at or above 100 kV except defined radial facilities. FERC also recommended that NERC adopt an exemption process and criteria for removing facilities from NERC's authority that are not necessary for operating the interconnected transmission network.
After stakeholder input, NERC proposed a core definition that included all transmission elements operated at 100 kV or higher and real power and reactive power resources connected at 100 kV or higher, while establishing an express exclusion for facilities used in the local distribution of electrical energy as well as certain behind-the-meter generation facilities. NERC also proposed changes to how entities targeted for inclusion in its compliance registry as part of the bulk electric system may seek an exception from regulation.
FERC proposes to adopt NERC's proposal, and has issued a Notice of Proposed Rulemaking (or "NOPR", a 94-page PDF) on the issue. In the NOPR, FERC seeks public comment on several issues, including whether NERC's proposal properly distinguishes between local distribution and transmission, and whether NERC's proposed procedures for seeking an exclusion from registration are sufficient. Comments are due to FERC by September 4, 2012.
At the federal level, chief regulatory responsibility for electric reliability falls on the Federal Energy Regulatory Commission. Following the August 2003 blackout, when 50 million people lost power in the U.S. and Canada, Congress authorized the creation of an “electric reliability organization” to manage the reliability of the North American bulk power system.
Today, that organization is the North American Electric Reliability Corporation (NERC). NERC's mission is to ensure the reliability of the North American bulk power system. To achieve this mission, NERC establishes and enforces reliability standards for the bulk power system.
In 2010, FERC issued Order No. 743 (104-page PDF), which ordered NERC to revise its definition of the "bulk electric system" -- a specific subset of the bulk power system. Historically, that term has been defined differently by each of each of eight regional entities. In Order No. 743, FERC recognized concerns arising from inconsistencies among these regional definitions, and recommended replacing the regional entities' discretion to define the "bulk electric system" with a bright line threshold. This bright line standard would include all facilities operated at or above 100 kV except defined radial facilities. FERC also recommended that NERC adopt an exemption process and criteria for removing facilities from NERC's authority that are not necessary for operating the interconnected transmission network.
After stakeholder input, NERC proposed a core definition that included all transmission elements operated at 100 kV or higher and real power and reactive power resources connected at 100 kV or higher, while establishing an express exclusion for facilities used in the local distribution of electrical energy as well as certain behind-the-meter generation facilities. NERC also proposed changes to how entities targeted for inclusion in its compliance registry as part of the bulk electric system may seek an exception from regulation.
FERC proposes to adopt NERC's proposal, and has issued a Notice of Proposed Rulemaking (or "NOPR", a 94-page PDF) on the issue. In the NOPR, FERC seeks public comment on several issues, including whether NERC's proposal properly distinguishes between local distribution and transmission, and whether NERC's proposed procedures for seeking an exclusion from registration are sufficient. Comments are due to FERC by September 4, 2012.
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