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FERC approves changes in ancillary service sales, reporting

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The Federal Energy Regulatory Commission issued final rules July 18 intending to bring greater competition and transparency to markets for ancillary services to the transmission grid.

FERC said its final rules (RM11-24) are to enhance the ability of ancillary services providers to compete for sale of services to public utility transmission providers. Ancillary services such as energy storage, regulation, frequency response, reactive supply, scheduling, and black start service can be provided by conventional and pumped-storage hydroelectric projects.

The rules also adopt reforms to provide greater transparency with regard to reserve requirements for regulation and frequency response.

The rules are based on a notice of proposed rulemaking issued by the commission in 2012, seeking comments on its proposal to review policies governing sale of ancillary services at market-based rates. Comments to an earlier June 2011 notice of inquiry argued that accounting and reporting requirements did not adequately support energy storage assets and operations. Commenters also had said the policy requiring competitive ancillary services providers to either prove they lack monopoly market power or be subject to certain market power mitigation measures presented a barrier to sale of such services.

FERC said the final rule requires each public utility transmission provider to add to its Open Access Transmission Tariff Schedule 3 a statement that it will take into account the speed and accuracy of regulation resources in its determination of reserve requirements for regulation and frequency response service. The final rules also adopt reforms to FERC's accounting and reporting regulations to add new electric plant and operation and maintenance expense accounts for energy storage devices.

The final rules are available on the FERC Internet site under http://www.ferc.gov/whats-new/comm-meet/2013/071813/E-22.pdf.

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