AICPA SOC Service Organizations - Certrec

Energy Storage Sands Continue to Shift before Order 2023 Compliance Filing


On Friday, March 15, 2024, the NYISO hosted what is expected to be the last of its Interconnection Issues Task Force (IITF) meetings before making its FERC Order No. 2023 compliance filing on April 3, and it was clear that issues remain, in particular, concerning the treatment of energy storage resources. Though the NYISO has previewed its proposed tariff revisions to stakeholders at recent IITF meetings, these proposed revisions may continue to change up until the compliance filing due date as a result of stakeholder feedback, discussions with FERC Staff, and-perhaps most critically-FERC’s ruling, expected at Thursday’s Open Meeting, on the approximately thirty-five requests for clarification and rehearing filed regarding Order No. 2023.

The NYISO has indicated that it will begin to implement its proposed tariff changes once its compliance filing is made in April (that is, before NYISO receives FERC approval). This may carry with it some risk as the NYISO is seeking several independent entity variations to allow it not to follow some of the requirements of Order No. 2023. For these independent entity variations to be approved, the NYISO will need to demonstrate that the alternative proposals are just and reasonable, not unduly discriminatory or preferential, and will accomplish the purposes of the Order.

One proposed independent entity variation is being closely followed by energy storage resource developers. Order No. 2023 requires Transmission Providers (which includes ISOs and RTOs), at the request of developers, to use operating assumptions in their interconnection procedures that reflect the proposed charging behavior of standalone, co-located, and hybrid electric storage resources. In initial discussions regarding the Order No. 2023 Compliance Filing, the NYISO indicated that it would seek an independent entity variation to avoid this requirement out of concerns that it could, among other things: (i) bog down the new process with added complexity; (ii) be inconsistent with NYISO’s market rules and would create inconsistent planning rules across different types of intermittent resources; and (iii) result in the NYISO not identifying system upgrades required to maintain system reliability.

Unsurprisingly, energy storage developers and clean energy advocates pushed back on the NYISO’s proposal out of concern that such a plan would not allow energy storage resources to use redispatch to mitigate the need for expensive system upgrades, and instead force them to pay for such upgrades. In response, the NYISO has offered a proposed solution for those energy storage projects interconnecting to the NYISO’s 100+ kV non-secured lines that would cause thermal overloads at the minimum interconnection standard: the NYISO will attempt to secure more transmission capacity in accordance with its current practices, and, where it cannot do so, the resource creating the thermal overload will need to accept limitations in output or withdrawal. However, the NYISO has not put forth a proposed solution for those projects interconnecting to non-secured lines rated 100 kV or lower, including much of Long Island and some regions upstate. 

Energy storage advocacy group NY-BEST submitted comments to the NYISO expressing concerns with the NYISO’s lack of a solution for non-secured lines under 100 kV and suggested the NYISO extend its proposal to non-secured lines under 69 kV and use the operating assumptions required by Order No. 2023 for projects interconnecting below 69 kV. As of Friday’s IITF meeting, it was unclear whether or if the NYISO plans to make any additional changes to its proposal regarding its treatment of energy storage resources. If it does not, we expect to see protests filed in response to the NYISO’s compliance filing.

As part of Friday’s meeting materials, the NYISO also released the attestation that inverter-based resources greater than 20 MW will need to submit as part of their interconnection requests. The attestation provides either that the proposed project is in compliance with New York State Reliability Council Rule B.5 (minimum interconnection standards for large inverter-based resources) or that it has been granted an exemption from compliance with the rule. The NYISO is proposing that it be permitted not to accept interconnection requests from inverter-based resources over 20 MW without attestation. 

Foley Hoag’s Energy and Climate team will be closely following (and blogging about) FERC’s actions on the requests for rehearing and clarification at its Open Meeting on March 21 and the NYISO’s Order No. 2023 compliance filing on April 3. Stay tuned for additional information about the NYISO’s (and other RTOs and ISOs’) compliance efforts with FERC Order No. 2023.

Originally published on Republished with permission.