By Amanda Durish Cook
CARMEL, Ind. — MISO this week offered its detailed energy storage participation proposal for a final round of stakeholder inspection while promising to introduce more new market rules in the future.
At a special Oct. 10 joint meeting of MISO’s Planning Advisory Committee and Market, Reliability and Resource Adequacy subcommittees, Director of Market Design Kevin Vannoy took the podium with a nod to the RTO’s long-running anecdote likening storage to a can of corn that must be opened and its use decided on.
“We’ve managed to open the can of corn and find that it’s a can of beans,” he joked.
Vannoy said stakeholders were instrumental in MISO crafting a compliance plan that meets the 76 requirements laid out in FERC’s sweeping Order 841.
“We think we have a solid definition of electric storage resources. The input we’ve got from stakeholders definitely helped us define compliance and will help us beyond Order 841. It’s going to help us with this generation of storage resources and the next generation of storage resources,” Vannoy said.
Pavan Addepalle, of MISO’s market engineering group, said the RTO envisions going beyond its current market storage definitions — ESR Type I and ESR Type II — to create third and fourth definitions.
MISO has put out a final call for suggestions on Order 841 compliance and will continue to vet the proposal in November before the Dec. 3 federal filing deadline.
The proposed rules stipulate that storage resources commit to the market through four main modes, including discharging, charging and continuous modes, and an outage status mode. The first three modes carry must-run designations and will be cleared between a resource’s minimum and maximum discharge limits.
MISO said it will also allow for emergency discharging and charging commitment modes, and an “available” status similar to that of an offline generation resource. However, stakeholders at the meeting asked MISO to consider compressing the separate emergency charging and discharging modes into a single commitment mode. The RTO had proposed that emergency charging be used to consume power during minimum generation events while emergency discharging would inject power during maximum emergency events.
For metering purposes, electric storage withdrawals from the grid will be treated as negative generation and categorized as wholesale electric storage withdrawals, while injections will be treated like MISO’s existing energy injections. MISO will also hold storage performance to the new uninstructed deviation threshold due to be filed with FERC later this month. (See “Final Uninstructed Deviation Proposal,” MISO Market Subcommittee Briefs: May 10, 2018.)
MISO also said that “technically capable” storage is eligible to provide reactive supply and voltage control and black start service. The RTO said it will propose minor Tariff revisions to include references to storage in the wording. Indianapolis Power and Light earlier this month asked FERC to order MISO to include black start service in its current storage participation model (ER17-1376).
The proposal also includes a pro forma agreement for storage connected at the distribution level to participate and a multistep capacity determination process and capacity obligations for storage resources. (See MISO Closing in on Storage Participation Plan.)
What the Proposal Won’t Do
The proposal does not call for MISO to manage the state-of-charge for storage resources or optimize their energy schedules in the day-ahead or real-time markets. (See “No Optimization Yet,” MISO Closing in on Storage Participation Plan.) Instead, market participants will manage state-of-charge through their bid parameters, although MISO will offer real-time hourly offer overrides for storage owners with “valid reasons.” The compliance plan also does not address distributed energy resource aggregation or participation outlines for hybrid storage and generation pairings, an issue that MISO’s Energy Storage Task Force is currently assessing. (See New Direction for MISO’s Energy Storage Task Force.) Vannoy said MISO will likely soon take up a DER participation model in anticipation of a likely FERC order on the issue.
Stakeholders asked if MISO’s Order 841 proposal risked FERC’s rejection because it only provides for making commitments for discharge but not charging.
Vannoy said MISO strongly considered the notion, but it decided that because the owner currently controls the state of charge, and the RTO isn’t yet prepared technologically to optimize energy scheduling for storage, commitment for discharging only was the best route.
“That’s a capability of the resource, not a service we offer. That’s not to say we won’t offer it in the future,” Vannoy said.
DTE Energy’s Nick Griffin suggested that MISO’s FERC filing should include an explanation of its technological limitations to improve its chances of acceptance.
After extensive consultation with Potomac Economics, its Independent Market Monitor, MISO decided that storage will be mostly subject to existing Tariff mitigation rules: offers should reflect known capabilities of the resource, revenue sufficiency guarantee eligibility will be revoked when a storage resource is discovered gaming make-whole payment mechanisms and anticompetitive conduct will be met with a Section 205 filing to seek mitigation measures.
MISO added that an electric storage resource “should not manage its state of charge in a manner inconsistent with its physical and operational characteristics.” It also said mitigation measures will not apply when electric storage resources derate to provide capacity, with such behavior not considered physical withholding.
Potomac’s Michael Chiasson said the Monitor doesn’t foresee major mitigation measures unless storage resources contribute to binding transmission constraints.
“I expect a lot of these resources to be relatively small. … They’re not going to have a lot of market power,” Chiasson said. “We don’t want to come down on a half-megawatt. We want to have a hospitable environment for these technologies to enter the market.”
Chiasson added that the Monitor would consider additional mitigation measures if it begins observing manipulation from storage resources.
“We’re hesitant to jump in too tightly. … We don’t want to slow someone down that doesn’t have market power,” Chiasson said. “We’re happy to have the new entrants.”
But Customized Energy Solutions’ John Fernandes said that MISO storage resources might be perceived to be withholding when batteries manage their “state of health” — different than the state of charge — when batteries are stopped to “cool off” after an active period to avoid deteriorating the life of the battery.
“There’s still a lot of gray area when it comes to this physical withholding,” Fernandes said.
Vannoy said a storage facility going unavailable to preserve itself would probably fall under a reasonable motive to stop offering into the market.