Electric storage resources (ESR) can provide significant benefits to regional electricity markets, however, their participation in these markets has been limited or restricted due to the absence of appropriate market regulation. The Federal Energy Regulatory Commission’s Order No. 841 attempts to remove barriers to the participation of electric storage resources in regional capacity, energy and ancillary services markets by treating energy storage as a generation asset. However, the FERC Order 841 does not cover compensation mechanisms for ESRs as a transmission asset, and most of the regional markets lack necessary market design and rules for compensating storage as a transmission asset. By neglecting transmission- and grid balancing service-related value streams of storage, the commission has not created market avenues for storage developers to reap the full benefits of their products.
In this Energy Law360 article Dr. Derya Eryilmaz, Caroline Heilbrun, and Rao Konidena of Rakon Energy LLC, discuss the issue, focusing on voltage and reactive support services settled at the transmission level, not the market level, specifically in two regional markets: the Midcontinent Independent System Operator (MISO,) and ISO-New England (ISO-NE).