FERC should reject MISO extension request for electric storage resource

FERC should reject MISO extension request for electric storage resource

On March 4, MISO filed a request to extend the deadline to implement a market participation model for electric storage resources at FERC. This new request moves the implementation date from June 2022 to March 2025.

FERC should reject this request because the benefits of keeping wholesale rates just and reasonable with storage participation outweigh the costs of MISO parallel processing current and future market platforms. Electric storage can participate in the energy market and capacity market and provide ancillary services. That is the intent behind FERC Order 841, the notice for which was released in November 2016. Eight years is a long time to wait for any market participant.

Background

The main reason MISO gave the commission for requesting the extension is regarding scheduling constraints with their market upgrade project. MISO has been working at least since 2017 when MISO changed the project name from “evaluation” to “enhancement” and called it the “Market Systems Enhancement” program.

After March 4 filing, many stakeholder organizations filed a protest at FERC. What is surprising to MISO stakeholders is MISO did not present at any stakeholder committee before asking FERC for this extension. Moreover, when FERC Order 841 came out in Spring 2018 and MISO filed the compliance plan by Dec 2018, stakeholders expected MISO to fulfill its promise of going live with the 2022 date.

FERC might accept because of the issue at hand – Market Systems Enhancement (MSE) Project

MISO markets went live in 2005. Since then, ancillary services started in 2007, with MISO becoming a single balancing authority. After a decade of MISO market operations and integrating several major utilities in the south, MISO started down the path of scoping out a new market platform. This new market system would also address the technological capabilities of emerging technologies like storage.

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So, FERC might accept MISO’s reasoning on moving ahead with MSE keeping the overall benefits of MISO market participants in mind.

But four more years is too long to wait for storage to participate in MISO markets

MISO insists that storage can now participate in its markets under a market product called Stored Energy Resource (SER) type II. SER type I applies to Beacon Power, like flywheels, which can participate in one particular ancillary service called regulating reserve.

But the problem with SER type II and ESR, the market participation model for complying with FERC Order 841, is that the latter provides electric storage resources with technical capabilities to participate in all of the MISO markets. Storage is not restricted to one service in the ancillary services market.

Waiting an additional 3 years (from 2022-2025) for the storage market to open up when MISO filed and got approval from FERC on Storage As a Transmission Only Asset (SATOA) is hard for non-transmission owners to swallow.

Meanwhile, hybrid interconnections and stand-alone storage is economical

While the benefit of a new market platform might be FERC’s reason to accept MISO’s extension request, FERC knows and must reconcile storage interconnection requests at MISO and other RTOs. Most of the storage interconnection requests at RTOs, including at MISO, are “hybrid” in nature – the same point of interconnection as solar or other renewable energy. FERC has a data request out for RTOs on hybrid interconnections, and the RTO responses are due July 2021.

In addition to hybrid resources, storage is economical on a stand-alone basis in the California market for capacity purposes and the New England forward capacity market. MISO has an upcoming 2021/22 planning resource auction. Capacity prices are announced on April 15. Storage can and should be able to participate in the capacity markets, and that is a good reason for FERC to reject MISO’s extension request.

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Conclusion

Whenever an RTO asks for an extension request for compliance or an implementation plan, stakeholders’ general feeling is disbelief. Because RTOs have sufficient time before a FERC Order due to the Notice of Proposed Rulemaking (NOPR). At the same time, market software upgrades are not something that FERC might question or reject.

The question remains for renewable developers on how to proceed with their business plans if FERC accepts MISO’s request for the 2025 implementation date. What is the alternative to developers who have tied up capital in keeping their interconnection queue positions? FERC must reject MISO’s extension request for storage to participate in MISO markets.

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