FERC Schedules Technical Conference on MISO’s Storage as Transmission-Only Proposal

April 14, 2020

On April 10, 2020, the Federal Energy Regulatory Commission (FERC) issued an order scheduling a technical conference to address issues surrounding a Midcontinent Independent System Operator Inc.  (MISO) tariff proposal to allow energy storage resources to serve as transmission-only assets. MISO’s proposal is the first attempt by a regional transmission organization (RTO) to categorically treat energy storage resources solely as transmission resources. As such, the proceeding has the potential to set precedent for other RTOs with respect to the terms and conditions under which energy storage resources may qualify as transmission assets.

In an order issued March 10, 2020, FERC determined that MISO’s tariff revisions concerning energy storage resources required further examination that was not possible based on the record of the proceeding. Accordingly, FERC accepted MISO’s proposed tariff revisions for filing; suspended them for five months, to become effective on August 11, 2020, subject to refund and further FERC order; and directed FERC staff to hold a technical conference on the matter.

The April 10 order scheduled the technical conference for May 4, 2020.

MISO’s Storage as Transmission-Only Proposal

On Dec. 12, 2019, MISO filed proposed revisions to its tariff to allow for the selection of an energy storage resource as a transmission-only asset in the MISO Transmission Expansion Plan (MTEP). MISO explained that the proposed tariff revisions would allow an energy storage resource to be selected as a preferred solution to a transmission issue in the MTEP process similar to traditional transmission solutions. MISO noted that its proposal reflects a fundamental shift in how energy storage resources are typically added to the system and will allow energy storage resources to be utilized to maximize reliability and efficiency of the grid.

MISO argued that its proposed tariff revisions established a framework for considering energy storage resources as transmission-only assets and allowing such resources to be evaluated on a comparable basis to traditional transmission solutions, such as wires. Specifically, MISO’s tariff revisions included: (1) an evaluation process for the energy storage resource to be included in the MTEP; (2) cost assumptions that are considered in the evaluation of an energy storage resource; (3) criteria for selecting an energy storage resource as a solution in the MTEP; (4) the process for developing operating guides that establish conditions for which the energy storage resource should be discharged and charged; and (5) a description of market-derived costs and revenues associated with an energy storage resource.

MISO’s Dec. 12 filing was criticized by several protestors who claimed that the proposal gave incumbent transmission owners an unfair advantage in developing energy storage resources.

March 10 Order

In its March 10 order, FERC held that MISO’s proposed tariff revisions had not been shown to be just and reasonable and may be unjust, unreasonable, unduly discriminatory or preferential, or otherwise unlawful. As noted above, FERC found that the issues raised in the proceeding were more appropriately addressed in a technical conference. FERC stated that technical conference topics should include, but not necessarily be limited to: MISO’s proposed evaluation and selection criteria for energy storage resources; the energy storage resource’s market activities and any potential wholesale market impacts of those activities; how MISO’s current formula rate structure accommodates cost recovery for energy storage resources; an energy storage resource’s potential impact on the generator interconnection queue; and operating guides that will apply to an energy storage resource.

In its April 10 order, FERC scheduled the technical conference for May 4, 2020, from 9 a.m. to 5 p.m. Due to COVID-19, the technical conference will be held remotely. The technical conference will be led by FERC staff and is open to the public. Anyone interested in participating in the conference must register by no later than noon on May 1, 2020. There is no registration fee. Information on joining the technical conference will be posted on FERC’s events calendar.