FERC grants NYISO request to give behind-the-meter resources market access

Dive Brief:

Federal regulators have approved tariff changes that will allow behind-the-meter (BTM) resources in New York to participate in capacity and energy auctions, so long as they meet certain size and load requirements, RTO Insider reports.
Resources participating in the markets must have nameplate generation of at least 2 MW, a minimum load of at least 1 MW, and an interconnection capable of exporting 1 MW into the state's transmission system.
The Federal Energy Regulatory Commission (FERC) said in its order that allowing BTM capacity into the markets "should improve the competitiveness, efficiency, and reliability of those markets."

Dive Insight:

Tariff changes are rarely the most exciting topics, but New York's proposal indicates the direction the state's electric industry is moving as it seeks to implement changes arising out of its Reforming the Energy Vision proceeding.

FERC last week approved BTM access to energy, ancillary services, and capacity markets, with many of the provisions going into effect last week, RTO Insider reports.

"We recognize the potential benefits of reducing obstacles to using excess capacity of Behind-the-Meter Resources to support New York’s grid," FERC concluded in its order. "NYISO’s proposal advances this goal, as Behind-the-Meter Resources that meet NYISO’s eligibility requirements will be permitted to bid energy and capacity in a comparable way to other suppliers and receive payments if they are dispatched. Their participation should improve the competitiveness, efficiency, and reliability of those markets."

It was not a complete win for the ISO, however. FERC rejected calls that the BTM assets do not need to comply with market mitigation measures because of their relatively small size. State regulators have "not provided any support for its assertion," the agency said.

The commission also rejected concerns from Independent Power Producers of New York over potential reliability issues.

"The resources that will be grandfathered under the proposed transition rule are not currently required to satisfy the requirements of the NYISO Deliverability Interconnection Standard in order to sell capacity into the NYISO market," FERC wrote, adding that it believes reliability concerns will be mitigated by a transition period proposed by NYISO.