UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) Modifications to Customers Identified ) To Attachment H-13 from ) Docket No. ER Commonwealth Edison Company ) ) MOTION FOR LEAVE TO ANSWER AND ANSWER OF THE ENERGY STORAGE ASSOCIATION Pursuant to Rules 212 and 213 of the Federal Energy Regulatory Commission s ( Commission or FERC ) Rules of Practice and Procedure, 18 C.F.R and , the Energy Storage Association ( ESA ) hereby requests leave to file this limited response to the October 31, 2014 Motion for Leave to Answer and Answer of Commonwealth Edison Company ( Answer ) filed by Commonwealth Edison Company ( ComEd ) in the above-referenced proceeding. ComEd s Answer merits a response to clarify the record so that the Commission will have correct and complete information regarding the resources and market functions in question regarding load charges assessed to wholesale energy storage resources. I. MOTION FOR LEAVE TO ANSWER The Commission s rules do not permit the filing of answers to answers; however, the Commission has granted leave to file such answers if they clarify the issues in dispute, ensure a complete and accurate record, or otherwise provide information that will assist the Commission 1

2 in its decision-making process. 1 To ensure that the Commission has complete and accurate information upon which to make a decision, ESA requests leave to submit this limited response to ComEd s Answer. II. LIMITED ANSWER In its October 31, 2014 Answer, ComEd states that Energy Vault LLC is connecting a battery to ComEd s distribution system, in order to participate in PJM s wholesale energy, capacity, and/or ancillary services markets. 2 ComEd then asserts that, ComEd will not assess wholesale distribution charges to generators connected at the distribution level and participating in the PJM markets. 3 ComEd has provided its own evidence that the wholesale distribution charges ComEd is seeking to assess to the Energy Vault storage system are a violation of ComEd s own tariff. ComEd goes on to establish the distinction between generators and wholesale purchasers serving load by clarifying, the impact of distribution-level generators supported a distinction between the impact on the distribution system caused by generators selling into PJM s wholesale 1 See, e.g., San Diego Gas & Electric v. Sellers of Energy and Ancillary Services, 108 FERC 61,219, at P14, n. 7 (2004) (answer was accepted as it provided information that assisted [the Commission in its] decision-making process ); Michigan Electric Transmission Co., 106 FERC 61,064, at P 3 (2004) (the permitted answer provides information that clarifies the issues ); North American Electric Reliability Corporation, 116 FERC 61,062, at P 24 (2006) (reply comments of NERC and others accepted because they have provided information that assisted us in our decision making process ); North American Electric Reliability Corporation, 117 FERC 61,091, at P 18 (2006) (same); North American Electric Reliability Corporation, 119 FERC 61,248, at P 6 (2007); North American Electric Reliability Corporation, 127 FERC 61,209 (2009), at P 5. 2 Docket ER , Motion for Leave to Answer and Answer of Commonwealth Edison Company, October 31, 2014, page 2. 3 Ibid, page 3. 2

3 markets and wholesale purchasers using the distribution system to serve load. 4 ComEd s own study showed that, reverse flows from generators may benefit the ComEd distribution system in some situations. 5 ComEd then explains, load-serving customers purchasing energy from the wholesale markets, and using the distribution system to serve their load, do not provide such reverse flows and thus do not provide the same system benefits. 6 ComEd has, again, provided ample evidence that ComEd s treatment of distributionconnected energy storage resources providing services to the wholesale market as wholesale purchasers serving load is unjust, unreasonable, and unduly discriminatory. First, distributionconnected energy storage resources participating in the PJM market are not serving load. These resources, just as ComEd describes, are selling into PJM s wholesale markets 7, and per ComEd s own rules, are not to be assessed wholesale distribution charges. Additionally, energy storage resources not only provide the same reverse-flow benefits as generators as described by ComEd but also provide a benefit when these resources are absorbing energy from the grid. The absorption of energy by the storage system is not consumption but, rather, a reduction in generation similar to the reductions made by traditional supply resources when providing applicable ancillary services. The only difference between an energy storage resource and a traditional supply resource providing this same service is that an energy storage resource has a set-point of zero while a traditional resource has a set-point of positive supply output. The natural result of this difference is that for a storage resource, the reduction in 4 Docket ER , Motion for Leave to Answer and Answer of Commonwealth Edison Company, October 31, 2014, page 3. 5 Ibid, page 3. 6 Ibid, page 3. 7 Ibid, page 3. 3

4 generation is actually the absorption of supply. This absorption is part of the service that is sold into the PJM market for which ComEd specifically states makes these resources distinct from wholesale purchasers of electricity serving load. The only consumption of energy by a storage plant is that of auxiliary loads and system losses, again identical to traditional supply resources providing wholesale market services. In short, ComEd s assertion that battery storage projects are wholesale load is simply false. PJM has designed a market service where fast-responding resources like energy storage can be compensated for providing hundreds of megawatts of mileage per day in charging alone; charging an energy storage system is still a supply-side wholesale transaction. In Order 755, the Commission describes storage charging as the ramping-down of the resource 8 and acknowledges the value of storage charging when providing ancillary services. 9 However, ComEd is looking to classify this exact charging service as load that imposes costs on the system. Ancillary services provided by supply resources, including energy storage, improve system reliability and performance and provide a benefit to generation owners, transmission operators, and distribution customers. The charges ComEd are looking to allocate are illogical and counter to the standards captured in wholesale market tariffs that have been approved by the Commission. 8 Docket Nos. RM and AD ; Order No. 755, Frequency regulation Compensation in the Wholesale Power Markets, page 2. 9 Ibid, page 59, a storage resource that is charging could be, at the same time, providing frequency regulation service at the direction of the system operator and therefore is appropriately paid for the capacity it sets aside to provide frequency regulation service. 4

5 Energy Vault s acceptance of these charges should be inconsequential to the Commission s determination that ComEd is inappropriately attempting to allocate load charges to an energy resource participating in the wholesale market. The fact that ESA is the only entity that has objected to ComEd s request is of even less relevance, as ESA represents the collective voice of 120 members of the US energy storage community. The Commission has previously held that energy storage devices are wholesale generators, not, as ComEd asserts, wholesale loads 10, and PJM subjects distribution-connected resources providing ancillary services to the wholesale market to the same interconnection studies and requirements as other suppliers. ComEd is the only party that is attempting to classify these storage resources as wholesale purchasers serving load, providing proof that ComEd is simply seeking a mechanism to levy unjust, additional charges on distribution-connected energy storage resources. If the Commission shares in ComEd s concern that battery operators are being afforded a free ride while providing the electric supply system with critical services, the Commission should open a technical conference to discuss appropriate allocation of costs that are designed specifically for storage when storage is not providing a wholesale market service. Forcing storage into an existing cost construct for wholesale load while simultaneously subjecting storage to the same studies, costs, and requirements as wholesale supply is unreasonable, burdensome, and a barrier to further development in an industry that has the capability to revolutionize the way energy is supplied and greatly improve the effectiveness and efficiency by which end-use 10 Docket EG , ORDER GRANTING EXEMPT WHOLESALE GENERATOR STATUS AND PROVIDING CLARIFICATION, April 5, 2010; and Docket EG , NOTICE OF EFFECTIVENESS OF EXEMPT WHOLESALE GENERATOR STATUS, February 14,

6 customers are provided energy service. The ability of energy storage to act in a manner similar to a myriad of resources and energy market participants interacting with the grid is what makes storage a breakthrough technology and should not provide an opportunity for entities to allocate any and all charges that seem to fit any one of these functions. Respectfully submitted, ENERGY STORAGE ASSOCIATION By its Policy Director, Dated: November 7, 2014 Katherine Hamilton Energy Storage Association th Street, NW Suite 500 Washington, DC k.hamilton@energystorage.org 6

144 FERC 61,053 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION ORDER ON REHEARING AND COMPLIANCE. (Issued July 18, 2013)

144 FERC 61,053 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Jon Wellinghoff, Chairman; Philip D. Moeller, John R. Norris, Cheryl A. LaFleur, and Tony Clark. PJM