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FERC Jurisdiction Over Energy Storage Resources

Last week FERC denied rehearing in its energy storage resource rulemaking. In rulemaking, FERC had asserted jurisdiction over energy storage resources on the distribution system. Commissioner McNamee dissented (see below) and stated: "’s order on rehearing fails to recognize the states’ interests in ESRs located behind a retail meter...or connected to distribution facilities...Order Nos. 841 and 841-A (Storage Orders) are on solid footing when they deal with ESRs connected to the transmission system and how ESRs may participate in the wholesale market...Storage Orders do not fully respect or consider the impact they may have on local distribution systems, the states...and local retail customers..I would have granted the rehearing requests asking to reconsider: (i) its finding that it has jurisdiction over whether ESRs located behind-the-meter or on the local distribution system are permitted to participate in the RTO/ISO markets through the ESR participation model and thereby asserting jurisdiction over distribution facilities; and (ii) its failure to provide states the opportunity to opt-out of the participation model created by the Orders.


Paul Dumais's picture

Thank Paul for the Post!

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Robert Borlick's picture
Robert Borlick on May 21, 2019 1:49 pm GMT

Paul is correct.

Two years ago I filed comments in the FERC NOPR that preceded Order 841 that essentially mirrored what Paul has stated, i.e., that providing storage, and other distributed generation connected to a utility's distribution system, access to the wholesale markets carries the risk of overloading distribution system components.  The distribution system operator needs to have full oversight and control over the energy flows imposed by storage and distributed generation.  Obviously, the FERC disregarded my warning.  

But even if the uncontrolled flows problem can be solved through effective coordination between the distribution system operator and the aggregators of the distributed resources, what gives the aggregators the right to be using a utility's distribution system to facilitate its business transactions without the permission of the owners of the system?  it seems to me this violates the Fifth Amendment, which requires "just compensation" for private property taken for public purposes.  

The FERC has no right dictating how a utility's distribution system is to be used.  This is clearly an overreach, as was Order 745 that dictated overcompensation for demand response.  

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