Independent System Operators Meet FERC Order 841 Milestone

Paul Davis
Director of Business Intelligence

Utility scale energy storage in wholesale markets came one step closer to reality across the U.S. last month on December 3rd as each Independent Systems Operators (ISO) submitted mandatory filings to implement new tariffs in compliance with FERC Order 841. 

The filings describe plans for how energy storage will engage the market with the common goal of allowing Energy Storage Resources (ESRs) to fully participate in energy and ancillary service markets.  Generally, the proposals introduce the storage resource category and explain the modeling, bid/offer parameters, operating limitations and settlement charge codes.   PCI gave a brief summary of the FERC requirements in a previous post.

FERC naturally dictated the fundamental ground rules for Order 841 but left their application up to the individual markets, so implementation details vary somewhat across the country. 

Summary of takeaways for each ISO

California Independent System Operator (CAISO)

Probably the most notable takeaway from CAISO’s filing is that they are already essentially meeting all Order 841 requirements with their existing model.

ISO-New England (ISO-NE)

ISO-NE’s Energy Storage Facilities (ESFs) can be categorized as Binary Storage Facilities (BSFs) or Continuous Storage Facilities.  BSFs can either charge or discharge but are not able to switch seamlessly between the two.  Previously BSFs were limited to pumped-storage hydro facilities, but the the new filing removes this limitation. Continuous Storage Facilities are able to transition rapidly between charging and discharging within ten minutes or less.  ESF’s will be able to participate in the Forward Capacity Market (FCM) although the proposed rules may limit flexibility to operate in the most cost effective way. 

PCI provided a preview of this proposal in a previous post, and additional details are available here.

Midcontinent Independent System Operator (MISO)

MISO uses the term “Electric” Storage Resources.  A MISO ESR may Discharge (sell) or Charge (purchase) energy in the Day Ahead Energy and Operating Reserve Market if it is included in the Network Model and has the telemetry to respond to 5-minute dispatch signals.  Additionally, a qualified Electric Storage Resource can supply Regulating Reserve, Spinning Reserve, Supplemental Reserve, Up Ramp Capability, and/or Down Ramp Capability in the Day Ahead Energy and Operating Reserve Market.  The Energy Offer curve to either Charge and/or Discharge must cover the entire range of operation and be monotonically increasing MW/price pairs.  Commitment Statuses include:

  • Charge
  • Discharge
  • Continuous
  • Emergency Charge & Discharge
  • Available
  • Outage and Not Participating

Charge, Discharge, or Continuous Commitment Statuses are for self-committing. The Available Status authorizes MISO to commit the ESR economically.

Valid Energy Dispatch Status specifications include Economic, Self-Schedule, and Not Participating. MISO emphasized that it will not manage State of Charge (SOC) for ESRs, so market participants are responsible for reporting the SOC through offer parameters and telemetry.

New York ISO (NYISO)

NYISO, like ISO-NE, distinguishes between what they call Continuous (able to switch between buyer and seller in one interval) and Non-Continuous ESRs.  Either can participate in the Capacity Market but need to meet the existing 4-hour minimum run-time requirement to be qualified.  To that end, Energy Storage Resources can derate their capacity so that, for example, a 40 MWh battery with the capability of injecting 20 MW/h would be able to reduce its capacity to 10 MW for 4 hours to meet the duration requirement. 

New York is betting big on energy storage as evidenced by the recent New York Public Service Commission (PSC) announcement setting an energy storage goal of 3,000 MW by 2030 with an interim goal of 1,500 MW by 2025.


IN PJM, ESRs can already participate in day ahead and real-time power markets, but only as self-scheduled resources, not by setting LMP. Under the new proposal, they can bid into the DA/RT markets in three modes – charge, discharge and continuous – and be dispatched according to LMPs.  Discharge mode is a supply offer (like a unit).  Charge mode is akin to a demand with negative bid.  Continuous mode is a combination of charge and discharge allowing the resource to buy or sell according to prevailing prices, similar to CAISO.

The recent implementation of 5-minute real-time settlements intervals is crucial to the profit margins of these highly flexible resources.  In addition to its DA and RT markets,  PJM will permit ESRs to participate in the Capacity market, albeit with the existing onerous 10-hour duration requirement, which could be difficult for resources like batteries that typically discharge in 4 hours or less.  That’s much longer than any other ISO.

Southwest Power Pool (SPP)

According to the October Market Working Group meeting notes, SPP identifies ESRs choosing to participate in the market under the new model by creating a resource registration type called Market Storage Resources (“MSR”).  SPP emphasizes that participation is voluntary, and distinguishes ESRs that choose to participate under 841 from those that elect to stay with the current model.  ESRs may register as any valid Resource type and are subject to the same rules as any other Resource within that type.  Any ESR registered as an MSR  (and meeting the technical standards) may provide Energy, Regulation-Up, Regulation-Down, Spinning Reserve, and Supplemental Reserve services, and submit self or market for commit status.  SPP estimates compliance with FERC Order 841 will cost approximately $850k.


Each ISO has until December 3, 2019 to revise and implement the new Order 841 market rules.  Below are some links to the filings for each ISO: