FERC Action On Electric Storage Could Be Transformational

In an action that industry observers have hailed as opening the floodgates for electric energy storage and sounding the death knell for peaking power plants across the nation, the Federal Energy Regulatory Commission (FERC) has issued a Final Rule requiring every Regional Transmission Organization (RTO) and Independent System Operator (ISO) in the U.S. to revise its tariff to establish a participation model for electric storage resources that is tailored to their physical and operational characteristics. This is potentially a very big deal. Energy storage can be used not just to smooth the output of variable energy resources, like wind and solar, but to arbitrage between peak and off-peak hours, similar to how incremental and decremental financial bids in day-ahead markets allow market participants to arbitrage between day-ahead and real-time energy prices. Once large-scale deployment of energy storage resources becomes feasible and profitable, the result will be