FERC Order No. 792 (Part 2 of 3): Benefits for Energy Storage

FERC Order No. 792 is a major update to the standardized generator interconnection rules found in the pro forma Small Generator Interconnection Procedures (SGIP) and Small Generator Interconnection Agreement (SGIA). The SGIP and SGIA, created by FERC in Order No. 2006, have largely standardized the generator interconnection process. The updates to the SGIP and SGIA in Order No. 792 are major benefits to distributed generation, especially small solar and energy storage. This article is the second in a three-part series on Order No. 792. Part 1 described how the order helps new solar PV projects. Part 2 describes how energy storage benefits from the order. Part 3 will discuss potential state adoption of FERC’s new rules for state-jurisdictional interconnections.

Benefits for Energy Storage

Before Order No. 792, it was unclear in most regions whether energy storage projects could obtain interconnections to the transmission system through the SGIP and SGIA process overseen by FERC, which left storage projects in a grey area. In Order No. 792, FERC clarified that energy storage devices can use the SGIP and SGIA process through a definitional change. Order No. 792 revises the definition of “Small Generating Facility” in the pro forma SGIA to explicitly include devices “for storage for later injection of electricity” into the grid. FERC added, “the [current] definition of Small Generating Facility is broad enough to include storage devices.” In other words, energy storage is within the scope of the SGIP and SGIA even before the changes in Order No. 792 go into effect in summer of 2014.

Energy storage projects also benefit form Order No. 792 in many of the same ways as solar PV projects, as described in Part 1 of this series. For example, most storage technologies, like solar PV, will use inverter-based interconnections. As such, storage will benefit from increased access to fast track interconnections available only to generators that use inverters, as described in Part 1. In addition, the newly created access to pre-application reports, as described in Part 1, is available to all interconnection customers, which will help storage developers to locate projects efficiently.

However, the storage industry may not see as much of an immediate impact from Order No. 792 as the solar industry because the interconnection process is just one of many obstacles for expansion of grid-scale energy storage. For example, regulations in FERC Order No. 784 addressing participation of energy storage in ancillary services markets, an area where energy storage holds great promise, are relatively new, as discussed in our article on Oregon energy storage.

FERC acknowledged that the interconnection rules for storage will likely evolve as the energy storage industry matures. California is actively pursuing a strategy of using storage to manage the electricity grid. FERC recognized the Rule 21 proceeding in California, which is expected to address interconnection for storage, may serve as a model for later iterations of FERC’s own rules. “As more experience is gained with the interconnection of storage devices,” explained FERC, “and as the issue is explored further in other proceedings, such as the Rule 21 proceeding, the Commission may adopt further revisions to the pro forma SGIP and SGIA associated with the interconnection of storage devices.”

Lovinger Kaufmann LLP assists solar PV developers and utilities in negotiation, dispute resolution, and rulemaking related to generator interconnections. Lovinger Kaufmann LLP participated in the drafting of the current interconnection rules in Oregon and Washington, which are modeled on the SGIP and SGIA from FERC Order No. 2006.

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