FERC's policy statement published and effective February 6 concerns how electric storage can seek two kinds of revenue for separate services. Cost-based recovery can coexist with market-based sales as a matter of policy. That is different from the November proposal about the rules allowing storage and distributed-resource aggregations into organized wholesale electricity markets. [2017-02421][2016-28194]

The access proposal called for regional transmission organizations and independent system operators to establish participation models reflecting storage's physical and operational characteristics. It also proposed recognizing distributed-resource aggregators as market participants. These remained proposed tariff reforms, not a guarantee that an individual storage project could enter every market or recover its investment. [2017-02421][2016-28194]

The effective guidance addresses duplicate cost recovery, competitive effects and operator independence. Crediting market revenue to customers paying cost-based rates is one possible approach; its design depends on how those rates recover costs. The majority considered concurrent revenue arrangements compatible with its precedents. Commissioner Cheryl LaFleur disputed its conclusions on competitive impacts and objected to addressing the issue separately from the access proceeding. [2017-02421][2016-28194]

Physical availability supplies another boundary. A resource must be technically capable of multiple services, and the cost-based service's demands must be predictable enough for charge management. That service takes priority when required, while the owner or operator controls market offers. These conditions distinguish permission to seek multiple revenue streams from unconditional permission to sell the same available capacity whenever convenient. Neither document establishes realized savings. [2017-02421][2016-28194]

Source documents

  1. Utilization of Electric Storage Resources for Multiple Services When Receiving Cost-Based Rate Recoveryhttps://www.govinfo.gov/content/pkg/FR-2017-02-06/html/2017-02421.htm
  2. Electric Storage Participation in Markets Operated by Regional Transmission Organizations and Independent System Operatorshttps://www.govinfo.gov/content/pkg/FR-2016-11-30/html/2016-28194.htm