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Policy Update Webinar March 23, 2015 Agenda I. FERC/ISO Updates Andrew Kaplan II. ERCOT Update Suzi McClellan III. Congressional Update Katherine Hamilton IV. State Update Jeff Cramer V. ESA Update Matt Roberts FERC/ISO Update Andrew Kaplan FERC: Resolved Dockets NYISO Regulation Movement Modifier • FERC approved NYISO change to Regulation Movement Modifier from 10-13 • ESA submitted motion to intervene without comments FERC: Pending Dockets PJM Capacity Market (ER15-623) • PJM submitted reforms to capacity market to ensure resources would perform when called (resulting from Polar Vortex issues) • PJM proposed new category of Capacity Performance Resources--would be first time energy storage allowed to participate in Reliability Pricing Market • ESA filed supporting comments January 20 • FERC ruling may be made this week FERC: Pending Dockets (cont’d) ComEd Rehearing (ER15-3) • ComEd claims Energy Vault battery would place demand on system and should incur wholesale distribution charges • FERC initially ruled in favor of ComEd • ESA submitted request for rehearing; FERC did not reject outright and ruling is pending • Could be damaging precedent for industry if not overturned FERC: Pending Dockets (cont’d) Uplift Price Formation (AD14-14) • ESA responded March 6 to FERC request for comments on price formation in energy and ancillary services markets • ESA stressed need for transparency of uplift charges • ESA also noted FERC need to send appropriate signals to drive investment in new innovative technologies that add flexibility (currently only generators are paid) FERC: Upcoming Dockets Frequency Response • FERC opened rulemaking with NOPR • Proposes to revise regulations to foster competition in sale of primary frequency response • Would mean frequency response separate and distinct ancillary svc. at market-based rates • Comments due April 27; ESA plans to file ERCOT Update Suzi McClellan ERCOT Activities Ancillary Services Redesign • ERCOT filed NPRR 667 in November 2014 • 2 workshops held- January 30 and March 11 • ERCOT favorable pricing and procurement Proposal for fast services is under attack • All pricing proposals will be presented to the Technical Advisory Committee March 26 – seeking direction from TAC on how to proceed AS Pricing Proposals ERCOT Proposed Pricing • Most favorable to energy storage • Primary Frequency and Fast Frequency clear in one stack with one price • All resources are paid MCPC which includes opportunity costs • During certain times an equivalency ratio is applied • New Development - ERCOT has agreed to remove its proposed price cap from FFR Alternative Pricing Proposals Alternative 1 • FFR and PFR are cleared in the same stack with different prices • FFR is paid the higher of the MCPC for PFR or the clearing price for FFR which would not include opportunity costs Alternative 2 • FFR and PFR clear in the same stack with different prices • PFR receives MCPC for PFR and FFR receives MCPC for FFR minus opportunity costs Alternative Pricing Proposals (cont’d) Luminant Proposal • FFR receives the higher of the PFR MCPC or the cleared FFR price without opportunity costs (effectively capped at PFR) • No equivalency ratio for pricing IMM Pricing Proposal • Essentially the same as Alternative 2 but with opportunity costs linked to offers in the market • Crafted with Load Resources in mind/not sure how it would apply to energy storage Upcoming ERCOT/PUC Activities HSL Test • Current test is inappropriate for storage • May limit quantity of AS provided FRRS Cap Removal • Cap was put in as part of pilot • ERCOT has committed to study and address Multi-interval SCED • allow resources to bid for 5 minute increments 30 minutes ahead Distributed Generation provision of AS • No streamline mechanism for DG to provide AS • PUC rulemaking on DG interconnection Texas Legislature • Oncor bill based on Brattle report was not pursued in this session • ESA may consider initiating legislation for 2017 • ESA could host annual Texas ESA conference Congressional Update Katherine Hamilton Tax Reform Process • Senate Working Groups (comments due 4/15) • Community Development & Infrastructure • Business Income Tax • Individual Income • Savings and Investment • International Tax • House Process • Stand-alone Credit (STORAGE Act) • MLP Parity Act • R&D Credit Energy Policy Authorization • House Hearing 3/4/15 • 21st C Electricity Challenge: Ensuring a Secure Reliable and Modern Electricity System • Senate Listening Tour • Infrastructure • Energy Efficiency • Supply • Accountability • Senate Hearing 3/17/15 • The State of Technological Innovation Related to the Electric Grid • Senate QER Hearing 3/26/15 ESA Recommendations • Tax Policies • STORAGE Act • MLP Parity Act • R&D Credit • Energy Policies • Stafford Act Revision • Federal Energy Management • QER Recommendations • Funding Recommendations • Additional funds for modeling at DOE • Transportation R&D Title State Update Jeff Cramer New York • PSC REV Order APSC REV Order—February 26 • ESA submitted numerous filings w comments reflected • Utilities not allowed to own distributed energy resources, serve as operators/facilitators of distribution system • Exception — utilities can own storage systems located on utility property that: • Integrate into distribution system architecture • Enhance grid reliability • Utilities provide information on locations/levels of storage. • No utility ownership of storage on customer property. Oregon • Storage RFP: result of ESA comments/engagement in 2014 Oregon Energy Office to release storage RFP this spring • HB 2193 — Storage bill introduced intro Oregon Legislative Assembly • Requires all utilities serving 3% of retail customers (PacificCorp and PGE) procure one or more storage systems >5 MW (capped at 1% 2014 load) by 2020 • Procured systems entitled to full cost recovery • PUC required to complete their analysis 2016; utilities required to submit plans 2017. • ESA testimony and advocacy— staff, Members, stakeholders Colorado • Commissioners Vaad, Patton, State Energy Office engagements • COSEIA energy storage effort and panel • State PUC hearing April 23 to discuss roll of storage in distribution system and current net metering policy • Colorado REV: Introduction of bill in CO House — HB 1250 — to require state PUC to open “investigatory proceeding to explore alternative utility revenue models” towards “performance-based utility regulation” New Mexico • NM Energy Office inquiry into the potential for energy storage • ESA staff and members to meet with NM Regulation Commission staff April 13 ESA Organizational Update Matt Roberts Questions?
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