FERC Order No. 841 Compliance Details for Electric Storage Participation in Markets

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The content discusses FERC Order No. 841 compliance requirements for electric storage resources in RTO/ISO markets. It covers the additional compliance requirements, such as metering rules, retail service provision, transmission charges, and market participation rules. ISO New England's proposed responses to these requirements are highlighted, emphasizing the need for effective implementation to facilitate the participation of electric storage facilities. The focus is on addressing the challenges and ensuring a smooth transition to the new market rules.

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J A N U A R Y 1 4 - 1 5 , 2 0 2 0 | N E P O O L M A R K E T S C O M M I T T E E FERC Order No. 841 Compliance Electric Storage Participation in Markets Catherine McDonough 4 1 3 . 5 3 5 . 4 0 2 7 | C M C D O N O U G H @ I S O - N E . C O M ISO-NE PUBLIC 1

WMPP ID: 129 FERC Order No. 841 Compliance Filing Deadline: February 10, 2020 FERC Order No. 841 requires ISOs to establish a participation model (i.e., market rules) that facilitates the participation of electric storage resources in RTO/ISO markets Effective date for the Order: December 3, 2019 On November 22, 2019, FERC approved ISO New England s Order No. 841 compliance filing subject to an additional compliance filing to address four issues Today: Discuss ISO New England s proposed response to address four issues that require additional action ISO-NE PUBLIC 2

FERC Order No. 841 Compliance Summary of Additional Compliance Requirements 1. Add Tariff language to describe the metering and accounting rules applicable to electric storage resources 2. Clarify that Electric Storage Facilities (ESFs) are not precluded from providing retail service 3. Apply transmission charges to ESFs when they are charging and not providing a service or demonstrate that it is reasonable not to do so 4. Account for state of charge and duration characteristics of an ESF in the Day-Ahead Energy Market ISO-NE PUBLIC 3

FERC Order No. 841 Compliance Requirement #1 Tariff Language to Describe Metering and Accounting Rules Requirement #1A: Add explicit statement in Market Rule 1, Section III.1.10.6 (a) that an Electric Storage Facility shall be directly metered Response: Add language in quotes as Section III.1.10.6 (a) (iii) Requirement #1B: Add Tariff language to demonstrate that electric storage resources will not pay twice for the same charging energy Response: Add Section III.1.10.6 (e)(ii), see Appendix ISO-NE PUBLIC 4

FERC Order No. 841 Compliance Requirement #1 (cont.) Tariff Language to Describe Metering and Accounting Rules Requirement #1C: Add Tariff language to include a basic description of ISO-NE s metering methodology and accounting practices for ESFs including references to ISO-NE s business practice manuals or other documents that contain implementation detail Response: Add Section III.1.10.6.(e), see Appendix ISO-NE PUBLIC 5

FERC Order No. 841 Compliance Requirement #2 Tariff Change to indicate that ESFs can also provide retail services Requirement #2: Clarify that, by registering as an asset in ISO- NE, an ESF is not precluded from providing retail service, so long as the resource meets its wholesale market obligations Response: Add item (viii) to Section III.1.10.6 (a), see Appendix ISO-NE PUBLIC 6

FERC Order No. 841 Compliance Requirement #3 Demonstrate that Transmission Cost Exemption Always Complies Requirement #3: Demonstrate that an ESF will be subject to transmission charges when it is charging and not providing a tariff-defined service or that it is otherwise reasonable to exempt an ESF from transmission costs whenever it charges given the existing rate structure for transmission charges. Response: Electric Storage Facilities are not subject to the transmission charges (as described in OATT, Section II.21.1, Schedule 9 and Schedule 21) because they are nearly always providing a wholesale market service when they are charging (e.g. reserve, regulation, VAR or frequency response) On the rare occasion when they are not providing a service when charging, the exemption is reasonable given the existing rate structure for transmission charges in New England ISO-NE PUBLIC 7

FERC Order No. 841 Compliance Requirement #4 Tariff Change to Account for Physical and Operating Characteristics Requirement #4: ISO must modify its existing participation model to account for Maximum Run Time, Maximum Charge Time, State of Charge, Maximum State of Charge, and Minimum State of Charge through bidding parameters or other means in its day-ahead energy market as required by Order No. 841. Response: On Dec. 23, the ISO filed a Request for Rehearing on this requirement. However, doing so does not waive the compliance requirement. Therefore, on compliance, the ISO will add: Section III.1.10.6 (d) In clearing the Day-Ahead Energy Market, the ISO will account for maximum run time, maximum charge time, state of charge, maximum state of charge, and minimum state of charge through bidding parameters or other means, as required by the Commission in Order No. 841. If the Request for Rehearing is denied, the ISO will discuss with stakeholders the details of how we will enable participants to further account for these physical and operational characteristics in the day-ahead energy market ISO-NE PUBLIC 8

Conclusion The ISO s further compliance with FERC Order No. 841 addresses the four issues that required additional action At the January 28, 2020 Markets Committee meeting, the committee will vote on the ISO s proposed Tariff compliance revision Please note that ISO will strive to finalize the tariff changes before the MC vote, but as the ISO works to prepare the compliance package following the vote, it may turn out that the language requires additional refinement; should this occur, the ISO will inform NEPOOL of any changes The Participants Committee will consider this item at its February 6, 2020 meeting The ISO plans to file its further compliance revisions with FERC by February 10, 2020 ISO-NE PUBLIC 9

Stakeholder Schedule Stakeholder Committee and Date Scheduled Project Milestone Markets Committee December 10-11, 2019 Initial discussion of FERC order on further compliance with Order No. 841 Markets Committee January 14-15, 2020 Discussion and review of tariff revisions Markets Committee January 28, 2020 MC Vote Participants Committee February 6, 2020 PC Vote February 10, 2020 FERC filing Effective Date: April 11, 2020 for all but the addition of Section III.1.10.6 (d), which will have an effective date of January 1, 2026 ISO-NE PUBLIC 10

ISO-NE PUBLIC 11

Acronyms Used in the Presentation ESF- Electric Storage Facility FCM Forward Capacity Market ISO- Independent System Operator MC- Markets Committee PC Participants Committee RTO Regional Transmission Organization TC Transmission Committee ISO-NE PUBLIC 12