In late January, FERC issued an order in response to a filing by Western Grid Development LLC that asked FERC to declare that Western Grid’s proposed battery storage devices are transmission facilities eligible for certain rate incentives.  Western Grid described its battery technology as 10 to 50 MW sodium sulfur batteries that would be installed at strategic places on the California ISO transmission grid in order to provide voltage support and protect against transmission overloads.  In a description that seemed significant to FERC, Western Grid stated that its batteries would only enhance transmission reliability at the California ISO’s direction, and that the batteries would not operate or participate in energy markets or provide electricity for commercial sale. 

FERC examines energy storage devices on a case-by-case basis because storage devices don’t fit squarely within the traditional transmission, distribution, or generation categories of assets.  In this case, FERC gravitated to the notion that the battery devices would not provide capacity or energy to be sold in the energy market, and that Western Grid would not retain any revenues outside of the transmission access charge (unlike generators).  For these and other reasons, FERC distinguished Western Grid from similar filings (see Nevada Hydro II–pumped storage), and determined that Western Grid’s technology will act enough like transmission assets to warrant eligibility for transmission rate incentives.  FERC’s approval of rate incentives, however, was conditional upon the California ISO approving Western Grid’s projects in the transmission planning process. 

Although FERC repeated numerous times that its decision was based on the "specific circumstances and characteristics" of Western Grid’s projects, the order shows potential for energy storage devices.  If such devices can show that they act sufficiently like traditional transmission assets (like capacitors), they may be able to obtain very valuable transmission rate incentives.  Whether this opens the door for compressed air energy storage and pumped hydro (but see Nevada Hydro II) is still up in the air, but rest assured that these questions will be at FERC before too long.

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Photo of Jason Johns Jason Johns

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations…

Jason Johns advises independent power producers, utilities, investors, and large users of gas and power resources with matters arising in power markets and state and federal energy regulatory arenas. Jason appears regularly in proceedings before the Federal Energy Regulatory Commission and in negotiations at the ISO/RTO level, where he represents independent power developers and utilities. His experience includes negotiating major facility contracts, such as interconnection, transmission, and power purchase agreements; prosecuting disputes at FERC; and counseling and defending clients on issues related to regulatory compliance.

Jason also works closely with large commercial and industrial users of electricity and gas, such as aerospace companies, pulp and paper mills, steel mills, and tech company data centers. In that role, Jason helps clients negotiate power and gas supply contracts, interstate pipeline capacity asset management agreements, and pipeline bypass agreements. Jason has also assisted these clients with demand management agreements, the installation of on-site resources (such as battery storage, fuel cells, and solar PV), and with retail and wholesale power purchase agreements for renewable energy and other resources. Jason also serves as a board member of The Climate Trust, a national leader in carbon offset projects and innovative climate change solutions.

Jason and his wife are parents to two growing boys, and they live just outside of Portland, Oregon.

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