ESA Comments re: FERC RM 11-7/AD10-11

Posted: May 2, 2011 - 11:37 / FERC / ESA Filings

The Energy Storage Association d/b/a Electricity Storage Association (“ESA”)
appreciates the opportunity to submit comments in support of the compensation
mechanism proposed by the Federal Energy Regulatory Commission (“FERC” or the
“Commission”) in its Notice of Proposed Rulemaking (“NOPR”) as issued in the abovecaptioned matter. As proposed, FERC would require all ISO/RTOs to adopt a
Regulation compensation formula that pays resources based on two components: (1) a
uniform capacity payment that includes marginal regulatory resource’s opportunity costs (i.e., the amount of megawatts (“MW”) that a resource makes available to provide Regulation); and (2) a performance payment based on the amount of up and down
movement (in MWs) that the resource provides in response to a control signal.2 Paying
resources based on these two components will ensure that fast-ramping regulation
resources, such as batteries and flywheels, are justly and reasonably compensated for
their ability to quickly and accurately correct the Area Control Error (“ACE”).

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