DC circuit court upholds FERC’s energy storage rule

Source: By Josh Siegel, Washington Examiner • Posted: Sunday, July 12, 2020

The D.C. Circuit Court on Friday upheld a landmark order from FERC removing long-standing barriers to energy storage in power markets, a decision that commission chairman Neil Chatterjee called a “very significant victory” that would enable the growth of renewables.

“Removing barriers to storage in our markets has been one of our top priorities,” Chatterjee said on a call with reporters in which he recapped FERC’s two-day conference this week on the impact of the pandemic on the energy industry. “We may look down the road and say this was one of the most significant actions taken by a government agency to address carbon mitigation.”

The FERC order, issued in 2018, requires regional grid operators, the Regional Transmission Organizations and Independent System Operators, to revise their pricing to recognize the benefits of energy storage and allow the technology to compete with generators in wholesale power markets.

The National Association of Regulatory Utility Commissioners had challenged the order, arguing it intrudes on state electricity authority.

“Because the challenged orders do nothing more than regulate matters concerning federal transactions — and reiterate ordinary principles of federal preemption — they do not facially exceed FERC’s jurisdiction under the [Federal Power] Act,” U.S. Circuit Judge Robert L. Wilkins wrote for the court.