FERC approved compliance filings from all of the ISO/RTOs in November and December of 2019. In some cases FERC rejected a portion of the compliance filing and required the ISO/RTO to return with an additional filing, or in the case of PJM and NYISO open a new case.
Now that we’ve seen the filings, is it the game changer the battery storage industry hopes it will be? The answer is mixed.
One the key revenue streams that can make battery projects viable is a capacity payment. While FERC required each of the ISO/RTO to allow battery storage to participate in its capacity markets, it did not require the ISO/RTOs to redesign their markets to better accommodate short duration assets like battery storage. The minimum run-time requirements to qualify as capacity (or its equivalent) currently ranges between 1 and 10 hours depending upon the ISO.
Behind the meter (BTM), distribution connected assets saw the opportunity to participate in markets with Order 841 and were excited at the potential to increase their revenue streams. However, this aspect of FERC’s Order is currently being contested in the courts, with some states claiming that FERC has overstepped its authority. While a few ISOs are likely to let this stand regardless of court decisions, it will remain risky to build business models on the assumption that BTM assets can participate in markets in most ISOs until this is resolved.
FERC did address a number of key barriers that would make or break the business model such as the “double charging” of BTM assets, which could potentially be billed both a wholesale and retail rate to charge. Additionally, some ISO/RTOs have been required to create entirely new tariffs that did not exist prior to Order 841, a huge step forward.
For more information on the potential implications of FERC Order 841 on your business model, please use the “contact” button.