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Utility Dive: DC Circuit Upholds Landmark FERC Storage Order, Rejecting Claims it Violates State Authority

Posted by Catherine Morehouse on Jul 13, 2020

Utility Dive covered FERC's Order 841 upheld by a federal appeals court and its impact on energy storage and wholesale markets, quoting AEE's Jeff Dennis. Read excerpts below and the entire Utility Dive piece here. 

The U.S. Court of Appeals for the District of Columbia Circuit ruled Friday that a federal storage order does not encroach on states' authority over the distribution system. A three-judge panel of the court said the Federal Energy Regulatory Commission's 2018 Order 841, intended to expand the ability of storage to participate in wholesale power markets, does not surpass the commission's jurisdiction with its section preventing states from broadly prohibiting energy storage's participation in those markets...

An attorney representing the National Association of Regulatory Utility Commissioners (NARUC) said during oral arguments in May that that section of the rule was an attempt to "curtail state authority" over the distribution system. FERC Chair Neil Chatterjee and clean energy advocates praised the decision.

"I'm obviously very pleased with this news," Chatterjee told reporters. "I think 841 … [may be] one of the single most significant ... actions taken by a government agency to address carbon mitigation and the transition to a clean energy future..."

FERC's storage order is broadly seen by the storage and clean energy sector as an essential tool to further the deployment of energy storage, and the D.C. Circuit affirmed the commission is within its legal authority under the Federal Power Act to ensure storage rules and practices affecting wholesale rates are "just and reasonable..."

But the D.C. Circuit determined Friday that Order 841 directly regulates a matter that deals with wholesale rates, and does not exert undue authority over state-regulated facilities.

The order "solely targets the manner in which an [energy storage resource] may participate in wholesale markets," an "action ... intentionally designed to increase wholesale competition, thereby reducing wholesale rates," the court writes. In that way, the court also maintains state authority regarding its distribution system under the rule, Jeff Dennis, general counsel and managing director at Advanced Energy Economy told Utility Dive in an email...

Read the entire Utility Dive piece here. 

Topics: AEE In The News