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Comments to FERC on NYISO and Energy Storage Resources

A new wholesale energy market policy proposal in New York could undermine market efficiency by limiting the compensation available for energy storage resources. The New York Independent System Operator (NYISO) recently submitted changes to its market rules to encourage energy storage, as required by an order from the Federal Energy Regulatory Commission (Order No. 841). The filing prevents energy storage resources from participating in the wholesale markets if they also participate in retail compensation programs. We submitted comments explaining how this participation barrier is inconsistent with FERC’s requirements and should be changed.

Energy storage resources are capable of providing benefits to the wholesale electric system while also benefiting the retail electric system, and Order No. 841 required that NYISO allow storage resources to provide all technically available wholesale market services. NYISO’s compliance filing, however, would prohibit energy storage resources from getting energy, capacity, and ancillary service revenue from the wholesale markets if they also participate in New York’s innovative retail programs. As a result, NYISO’s filing is inconsistent with Order No. 841 and with just and reasonable rates. Though NYISO has claimed it is exploring the concept of dual participation on a separate track, it has not committed to implement changes. Our comments recommend that FERC direct NYISO to revise its market rules to permit dual participation under a prompt timeline.