In a victory for the power storage business, a federal appeals courtroom has upheld Federal Vitality Regulatory Fee’s Order 841, clearing the way in which for transmission grid operators throughout the nation to open their markets to power storage, together with aggregated batteries linked on the distribution grid or behind prospects’ meters.
Friday’s courtroom opinion (PDF) declared that FERC has jurisdiction over how power storage interacts with the interstate transmission markets it regulates, even when these methods are interconnected to the grid underneath rules set by the states.
The courtroom additionally rejected arguments by utility teams and state utility regulators looking for to to decide out of permitting power storage sources (ESR) to take part underneath Order 841, which permits for models as small as 100 kilowatts to entry wholesale markets.
As an alternative, the three-judge panel of the U.S. Courtroom of Appeals for the District of Columbia Circuit agreed with FERC’s competition that “[k]eeping the gates open to all forms of ESRs — no matter their interconnection factors within the electrical power methods — ensures that technological advances in power storage are absolutely realized within the market, and environment friendly power storage results in larger competitors, thereby lowering wholesale charges.”
Past serving to to make wholesale markets extra environment friendly, Order 841 has began to open new power storage alternatives in grid markets in New England and New York. The remainder of the nation’s transmission grid operators, which handle wholesale markets serving roughly two-thirds of the nation’s electrical energy prospects, are creating their very own Order 841 implementation plans.
Wooden Mackenzie predicts that Order 841 will open up new alternatives for power storage builders and aggregators which have primarily relied on state-by-state power storage mandates and market alternatives thus far. Whereas power storage business teams have fought in opposition to some grid operators’ interpretation of Order 841, they’ve additionally hailed its broader potential advantages.
“This is a gigantic step for power storage, with the affirmation that power storage linked on the distribution stage should have the choice to entry wholesale markets, permitting houses and companies to contribute to the resiliency, effectivity, sustainability, and affordability of the grid,” Kelly Speakes-Backman, chief government of the Vitality Storage Affiliation, mentioned in an e-mail.
“As our electrical system turns into extra modernized and distributed, we’re seeing the regulatory frameworks at each the wholesale and retail ranges modify to that actuality,” Speakes-Backman mentioned.
Finish of a long-running battle
The opinion marks what’s more likely to be the ultimate chapter in a long-running battle between FERC and power storage and distributed power advocates on one hand, and utilities and state regulators on the opposite, Jennifer Key, a companion of the Steptoe & Johnson legislation agency in Washington D.C., mentioned in a Friday interview.
“This ruling was a slam dunk for FERC,” Key mentioned. In truth, it “went additional than it in all probability even wanted to make it clear that FERC may preempt state interference in power storage sources attempting to succeed in the wholesale market.”
Teams together with the American Public Energy Affiliation (APPA), the Nationwide Affiliation of Regulatory Utility Commissions (NARUC) and the Edison Electrical Institute (EEI) had challenged Order 841 on the grounds that it may open state-regulated grids to being disrupted by batteries and different ESRs serving wholesale markets. However the courtroom’s opinion famous that FERC is “not regulating issues of entry” in Order 841, and that states retain authority over interconnection guidelines and processes so long as they don’t embrace a blanket prohibition in opposition to wholesale market participation.
Any attraction of Friday’s choice would possible face an uphill authorized battle, Key mentioned. In early 2016, the U.S. Supreme Courtroom upheld FERC’s authority to control demand response in wholesale markets, a ruling that took FERC’s facet in a much more complicated federal-state jurisdictional battle than the one represented by states’ problem to Order 841, she mentioned.
Past clearing the way in which for grid operators to hold out their Order 841 implementation plans, the courtroom’s choice “eliminates any of the jurisdictional boundaries to rulemaking” on FERC’s long-delayed efforts to increase wholesale market entry to a broader array of distributed power sources (DERs), Key famous. FERC break up that effort right into a separate continuing, RM18-9, whereas it really works on the complexities of wholesale-retail market integration via the Order 841 course of, as we observe on this week’s GTM Squared.
“DERs are uniquely beneficial in that they’ll present companies throughout each retail and wholesale markets,” Jeff Dennis, managing director and common counsel of Superior Vitality Financial system, a pro-DER commerce group, mentioned in an interview this week. “Ensuring they’ll present each, and never be pressured to choose one or the opposite, is a crucial challenge.”