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PJM Reply to FERC Provides Support (with Caveats) for New Storage NOPR

The FERC NOPR concerns removal of "barriers to the participation of electric storage resources and distributed energy resource aggregations in the organized wholesale electric markets."

An instructive example of the depth of nuances required to successfully roll out policies and detailed regulations from more general initial rulemakings is to be found in the comments provided by PJM Interconnection, LLC, recently with regard to the Federal Energy Regulatory Commission (FERC) Notice of Proposed Rulemaking (NOPR).

The FERC NOPR concerns removal of “barriers to the participation of electric storage resources [ESRs] and distributed energy resource [DER] aggregations in the organized wholesale electric markets.”

PJM has already enabled approximately 300 MW of ESRs to flourish in a number of its markets. In its detailed comments dated Feb. 13, it seeks clarification regarding market rules to enable greater expansion of ESRs and related DERs.

The key threshold issues PJM highlighted in its reply include potential jurisdictional matters, e.g. related to the charging and discharging of behind the meter resources. Such issues must comprehensively address considerations that vary as a function of the entities involved, whether those entities are states, electric distribution companies, asset owners, or regional transmission organizations and independent system operators (RTOs/ISOs). In addition, PJM highlighted the need for sufficient flexibility on key implementation details to accommodate for various distinct RTO/ISO characteristics.

DERs can include demand response, which PJM currently has integrated to a great depth and include more than “1,100 MW of nameplate capacity demand response resources consisting of batteries, reciprocating engines, combustion turbines, and other technologies that are physically capable of producing electric power.” Of these DR resources, fully 700 MW are involved with Wholesale Market Participation Agreement (WMPA).

PJM details how FERC has provided an “excellent foundation to develop similar aggregation rules for DERs” but notes “there are differences between behind the meter demand response resources and DERs that would seek to inject power past the applicable meter, and PJM and its stakeholders have begun to develop specific rules [related to] safety, transparency, dispatchability, interconnections, and protecting against overcompensation and double charging from the retail and wholesale electric markets for this category of DERs.”

Additionally, PJM provides discussion of a wide range of associated variables to be addressed in relation to how FERC and all interested parties are to get from the current regulatory stage to the subsequent stages: “Given the foregoing, PJM supports a rule that establishes clear foundational principles related to DER aggregation but allows for RTOs/ISOs to place appropriate requirements for DER aggregation that comport with the specific requirements of each respective market.”

The full 42-page PJM response to FERC can be accessed at this link.

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