Victory for wholesale energy storage, but does Order 841 allow FERC to assault net metering?

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A federal appeals court in Washington D.C. upheld the Federal Energy Regulatory Commission’s Order 841 on Friday — maintaining that FERC has control over energy storage in its regulated interstate markets (court opinion here).

So, Order 841 stands — it lets regional transmission operators make wholesale markets for energy storage in capacity and ancillary services that could include combined fleets of behind-the-meter systems.

According to RTO Insider, “The court also rejected arguments by utility groups and state utility regulators seeking to opt out of allowing energy storage resources (ESRs) to participate under Order 841, which allows for units as small as 100 kilowatts to access wholesale markets. Instead, the…U.S. Court of Appeals agreed with FERC’s contention that ‘[k]eeping the gates open to all types of ESRs — regardless of their interconnection points in the electric energy systems — ensures that technological advances in energy storage are fully realized in the marketplace, and efficient energy storage leads to greater competition, thereby reducing wholesale rates.'”

Energy Storage Association CEO Kelly Speakes-Backman said in a statement, “This is an enormous step for energy storage, with the affirmation that energy storage connected at the distribution level must have the option to access wholesale markets. As our electric system becomes more modernized and distributed, we are seeing the regulatory frameworks at both the wholesale and retail levels adjust to that reality.”

Katherine Gensler, VP of regulatory affairs at the Solar Energy Industries Association said, “We are pleased with the Court’s decision today…providing a pathway for energy storage resources to participate in wholesale electric markets around the country…We urge FERC to publish a final rule on wholesale market participation for distributed energy resources.”

FERC Chairman Neil Chatterjee was enthusiastic about the ruling: “I have said repeatedly that I think [with] 841, we may look down the road and say it was one of the single most significant actions taken by a government agency to address carbon mitigation and the transition to a clean energy future,” according to reporting in S&P Global.

This decision arrives at the same time that the mysteriously funded New England Ratepayers Association is asking FERC to have sole jurisdiction over behind-the-meter solar generation, similarly moving more power to FERC and away from the states.

The National Association of Regulatory Utility Commissioners along with the Edison Electric Institute, the American Public Power Association and the National Rural Electric Cooperative Association were among the challengers to the FERC order.

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