169 FERC ¶ 61,049

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Richard Glick and Bernard L. McNamee.

PJM Interconnection, L.L.C. Docket Nos. ER19-469-000

ER19-469-001

EL19-100-000

ORDER ON COMPLIANCE FILING, INSTITUTING SECTION 206 PROCEEDING,

AND ESTABLISHING PAPER HEARING

(Issued October 17, 2019)

I. Background ..................................................................................................................... 3.

II. Compliance Filings........................................................................................................ 5.

III. Notice of Filing and Responsive Pleadings................................................................ 11.

IV. Discussion .................................................................................................................. 16.

A. Procedural Matters .................................................................................................. 16.

B. Substantive Matters................................................................................................. 19.

1. Creation of a Participation Model ....................................................................... 21.

a. Participation Model ......................................................................................... 21.

i. Filing............................................................................................................ 24.

ii. Protests/Comments..................................................................................... 27.

iii. Answer....................................................................................................... 32.

iv. Data Request Response.............................................................................. 34.

v. Commission Determination ........................................................................ 35.

b. Qualification Criteria for the Participation Model.......................................... 40.

i. Filing............................................................................................................ 42.

ii. Data Request Response .............................................................................. 46.

iii. Commission Determination....................................................................... 47.

c. Relationship between Electric Storage Participation Model and Existing 

Market Rules....................................................................................................... 48.

i. Filing............................................................................................................ 49.

ii. Protests/Comments..................................................................................... 54.

iii. Answers..................................................................................................... 60.

iv. Data Request Response.............................................................................. 64.
Docket No. ER19-469-000, et al. - 2 -

v. Commission Determination ........................................................................ 65.

2. Eligibility of Electric Storage Resources to Participate in the RTO/ISO Markets

................................................................................................................................. 68.

a. Eligibility to Provide all Capacity, Energy, and Ancillary Services............... 68.

i. Filing............................................................................................................ 70.

ii. Protests/Comments..................................................................................... 82.

iii. Answer....................................................................................................... 86.

iv. Data Request Response.............................................................................. 87.

v. Comments on Data Request Response ....................................................... 90.

vi. Commission Determination....................................................................... 92.

b. Ability to De-Rate Capacity to Meet Minimum Run-Time Requirements..... 96.

i. Filing.......................................................................................................... 100.

ii. Protests/Comments................................................................................... 103.

iii. Answers................................................................................................... 116.

iv. Data Request Response............................................................................ 130.

v. Comments on Data Request Response ..................................................... 134.

vi. Commission Determination..................................................................... 138.

3. Physical and Operational Characteristics of Electric Storage Resources.......... 146.

a. Filing.............................................................................................................. 159.

b. Protests/Comments........................................................................................ 161.

c. Answer........................................................................................................... 166.

d. Data Request Response ................................................................................. 167.

e. Commission Determination........................................................................... 173.

4. State of Charge Management ............................................................................ 178.

a. Filing.............................................................................................................. 180.

b. Protests/Comments........................................................................................ 186.

c. Data Request Response ................................................................................. 190.

d. Commission Determination .......................................................................... 192.

5. Minimum Size Requirement.............................................................................. 196.

a. Filing.............................................................................................................. 198.

b. Data Request Response ................................................................................. 199.

c. Comments on Data Request Response.......................................................... 200.

d. Commission Determination .......................................................................... 201.

6. Energy Used to Charge Electric Storage Resources.......................................... 202.

a. Price for Charging Energy............................................................................. 202.

i. Filing.......................................................................................................... 208.

ii. Protests/Comments................................................................................... 217.

iii. Data Request Response ........................................................................... 218.

iv. Commission Determination..................................................................... 219.

b. Metering and Accounting Practices for Charging Energy............................ 221.

i. Filing.......................................................................................................... 224.

ii. Protests/Comments................................................................................... 226.

iii. Answers................................................................................................... 231.
Docket No. ER19-469-000, et al. - 3 -

iv. Data Request Response............................................................................ 236.

v. Comments on Data Request Response ..................................................... 239.

vi. Commission Determination..................................................................... 240.

7. Miscellaneous.................................................................................................... 247.

a. Protests/Comments........................................................................................ 247.

b. Answer .......................................................................................................... 254.

c. Commission Determination........................................................................... 255.

8. Effective Date .................................................................................................... 258.

a. PJM’s October 8, 2019 Filing ....................................................................... 259.

b. Commission Determination .......................................................................... 260.

V. Appendix A: Abbreviated Names of Intervenors............................................................

VI. Appendix B: Abbreviated Names of Initial Commenters..............................................

VII. Appendix C: Abbreviated Names of Reply Commenters.............................................

VIII. Appendix D: Tariff Sections........................................................................................
169 FERC ¶ 61,049

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

 Richard Glick and Bernard L. McNamee.

PJM Interconnection, L.L.C. Docket Nos. ER19-469-000

ER19-469-001

EL19-100-000

ORDER ON COMPLIANCE FILING, INSTITUTING SECTION 206 PROCEEDING, 

AND ESTABLISHING PAPER HEARING

(Issued October 17, 2019)

On December 3, 2018, PJM Interconnection, L.L.C. (PJM) submitted proposed 

revisions to its Open Access Transmission Tariff (Tariff) and Amended and Restated 

Operating Agreement (Operating Agreement)1 in compliance with the requirements of 

Order No. 841,

2 which removes barriers to the participation of electric storage resources 

in the capacity, energy, and ancillary service markets operated by Regional Transmission 

Organizations and Independent System Operators (RTO/ISO markets). 

In this order, we accept PJM’s proposed revisions, to become effective December 3, 

2019, subject to a further compliance filing, to become effective on a date to be established 

by PJM, as discussed below. We also institute an investigation pursuant to section 206 of 

the Federal Power Act (FPA)3 and establish paper hearing procedures regarding the 

justness and reasonableness of PJM’s minimum run-time rules and procedures.

 1 In Docket No. ER19-462-000, PJM concurrently filed additional proposed 

Tariff and Operating Agreement revisions to comply with Order No. 841, requesting an 

effective date of February 3, 2019 (First Compliance Filing). Capitalized terms that are 

not defined in this order have the meaning specified in the Tariff.

2 Electric Storage Participation in Markets Operated by Regional Transmission 

Organizations and Independent System Operators, Order No. 841, 162 FERC ¶ 61,127

(2018), order on reh’g, Order No. 841-A, 167 FERC ¶ 61,154 (2019). 

3 16 U.S.C. § 824e (2018).
Docket No. ER19-469-000, et al. - 2 -

I. Background

In Order No. 841, the Commission adopted reforms to remove barriers to the 

participation of electric storage resources in RTO/ISO markets.4

 The Commission 

modified section 35.28 of its regulations5 to require each RTO/ISO to revise its tariff to 

establish market rules that, recognizing the physical and operational characteristics of 

electric storage resources, facilitate their participation in the RTO/ISO markets. The 

Commission found that Order No. 841 will enhance competition and, in turn, help to

ensure that the RTO/ISO markets produce just and reasonable rates, pursuant to the 

Commission’s legal authority under Federal Power Act (FPA) section 206.6

Order No. 841 requires each RTO/ISO to revise its tariff to establish a participation 

model for electric storage resources consisting of market rules that, recognizing the 

physical and operational characteristics of electric storage resources, will help facilitate 

their participation in the RTO/ISO markets.7

 Specifically, for each RTO/ISO, the tariff 

provisions for the participation model for electric storage resources must: (1) ensure that a 

resource using the participation model is eligible to provide all capacity, energy, and 

ancillary services that it is technically capable of providing in the RTO/ISO markets; 

(2) ensure that a resource using the participation model can be dispatched and can set the 

wholesale market clearing price as both a wholesale seller and wholesale buyer consistent 

with existing market rules that govern when a resource can set the wholesale price; 

(3) account for the physical and operational characteristics of electric storage resources 

through bidding parameters or other means; and (4) establish a minimum size requirement 

for participation in the RTO/ISO markets that does not exceed 100 kW. Additionally, each 

RTO/ISO must specify that the sale of electric energy from the RTO/ISO markets to an 

electric storage resource that the resource then resells back to those markets must be at the 

wholesale locational marginal price (LMP).8

 4 Order No. 841, 162 FERC ¶ 61,127 at P 1.

5 18 C.F.R. § 35.28 (2019).

6 16 U.S.C. § 824e.

7 Order No. 841, 162 FERC ¶ 61,127 at P 3. In Order No. 841, the Commission 

referred to a set of tariff provisions that are created for a particular type of resource as a 

participation model. Id.

8 Id. P 4. 
Docket No. ER19-469-000, et al. - 3 -

II. Compliance Filings

PJM submitted two compliance filings in Docket Nos. ER19-462-000 and 

ER19-469-000 to establish a participation model that facilitates the participation of 

electric storage resources in the PJM capacity, energy, and ancillary services markets.9

PJM explains that the First Compliance Filing requested definitional changes to be 

effective February 3, 2019 to allow PJM to develop and test its metering and accounting 

practices prior to implementing the Storage Participation Model. On February 1, 2019, 

the Commission accepted, in Docket No. ER19-462-000, PJM’s First Compliance Filing 

to conform its definitions of Energy Storage Resource and Capacity Storage Resource to 

the Commission’s definition of electric storage resource in Order No. 841.10

On December 3, 2018, PJM submitted its second Order No. 841 compliance filing, 

which we address in this order. PJM states that it evaluated each of its available market 

services to determine whether it needed to make changes to allow Energy Storage 

Resources to participate effectively.

11 PJM states that it also assessed how Energy 

Storage Resources should be treated to ensure their eligibility does not result in 

preferential treatment or undue discrimination. PJM states that, although Energy Storage 

Resources are currently eligible to provide services in its capacity, energy, and ancillary 

services markets, the Storage Participation Model explicitly addresses each available 

product to ensure that Energy Storage Resources are eligible to provide all services that

they are technically capable of providing. PJM explains that it did not need to modify all 

aspects of its markets to implement the proposed Storage Participation Model. PJM 

states that it also will need to make changes to the PJM Manuals to implement the 

 9 PJM proposes to define Energy Storage Resource Participation Model as the 

participation model accepted by the Commission in the instant docket. Compliance 

Filing, Tariff, Definitions – E – F. We hereinafter refer to it as the Storage Participation 

Model.

10 PJM Interconnection, L.L.C., 166 FERC ¶ 61,087 (2019) (First Compliance 

Order). PJM defines “Energy Storage Resource” as “a resource capable of receiving 

electric energy from the grid and storing it for later injection to the grid that participates 

in the PJM Energy, Capacity and/or Ancillary Services markets as a Market Participant” 

and defines a “Capacity Storage Resource” as “any Energy Storage Resource that 

participates in the Reliability Pricing Model or is otherwise treated as capacity in PJM’s 

markets such as through a Fixed Resource Requirement Capacity Plan.”

11 Compliance Filing, Transmittal at 3.
Docket No. ER19-469-000, et al. - 4 -

Storage Participation Model through its stakeholder process prior to implementation on 

December 3, 2019.12

PJM proposes not to require resources currently operating in its markets under the

optimized pumped-hydro participation model to instead utilize the Storage Participation 

Model. PJM states that such resources that satisfy the criteria for the Storage 

Participation Model will have the opportunity to select the model in which they would 

like to participate.13

PJM seeks an effective date for its compliance filing of December 3, 2019.

On April 1, 2019, Commission staff issued a letter informing PJM that additional 

information was necessary to process its compliance filing (Data Request). On May 1, 

2019, PJM submitted a response to the Data Request, which amended its compliance 

filing (Data Request Response). 

On October 8, 2019, PJM filed amended Tariff records to change the 

corresponding effective dates from 12/3/2019 to 12/31/9998 to provide for flexibility.

14

III. Notice of Filing and Responsive Pleadings

Notice of PJM’s December 3, 2018 filing was published in the Federal Register, 

83 Fed. Reg. 63,852 (2018), with interventions and protests due on or before 

December 24, 2018. On December 14, 2018, the Commission extended the comment 

period until and including February 7, 2019.

15 Appendix A to this order lists the 

entities that filed notices of intervention and timely-filed motions to intervene. 

Appendix B to this order lists the entities that filed protests and comments. 

Appendix C to this order lists the entities that filed answers. 

 12 Id. at 5.

13 Id. at 6.

14 PJM October 8, 2019 Filing at 2-3.

15 Notice of Extension of Time, Docket Nos. ER19-460-000, ER19-462-000, 

ER19-465-000, ER19-467-000, ER19-468-000, ER19-469-000, and ER19-470-000 

(December 14, 2018).
Docket No. ER19-469-000, et al. - 5 -

Notice of PJM’s May 1, 2019 Data Request Response was published in the 

Federal Register, 84 Fed. Reg. 20,351 (2019), with interventions and protests due on or 

before May 22, 2019.

Advanced Energy Economy, AWEA and the RTO Council, and PJM’s Market 

Monitor filed comments on PJM’s Data Request Response.

Notice of PJM’s October 8, 2019 filing was published in the Federal Register, 

84 Fed. Reg. 55,308 (2019), with interventions and protests due on or before October 29, 

2019. On October 10, 2019, the Commission shortened the comment period until and 

including October 11, 2019.16

IV. Discussion

A. Procedural Matters

Pursuant to Rule 214 of the Commission’s Rules of Practice and Procedure, 

18 C.F.R. § 385.214 (2019), the notices of intervention and timely, unopposed motions to 

intervene serve to make the entities that filed them parties to this proceeding.

Pursuant to Rule 214(d) of the Commission’s Rules of Practice and Procedure, 

18 C.F.R. § 385.214(d) (2019), we grant Lockheed Martin’s late-filed motion to 

intervene given its interest in the proceeding, the early stage of the proceeding, and the 

absence of undue prejudice or delay. The entities that filed protests or comments but did 

not file motions to intervene are not parties to the proceeding.17

Rule 213(a)(2) of the Commission’s Rules of Practice and Procedure, 18 C.F.R. 

§ 385.213(a)(2) (2019), prohibits an answer to a protest or an answer unless otherwise 

ordered by the decisional authority. We accept the answers filed in this proceeding 

because they have provided information that assisted us in our decision-making process. 

 16 Errata Notice Shortening Comment Period, Docket No. ER19-469-002 

(October 10, 2019).

17 18 C.F.R. § 385.211(a)(2). SEIA and Tesla filed comments but did not file 

motions to intervene. As part of Public Interest Organizations’ protest, Earthjustice and 

Sierra Club filed protests but did not file motions to intervene. Although we do not grant 

party status to these entities, we address their comments and protests in this order.
Docket No. ER19-469-000, et al. - 6 -

B. Substantive Matters

We find that PJM’s compliance filing, with certain modifications, complies with 

the requirements that the Commission adopted in Order No. 841.

18 Accordingly, we 

accept PJM’s compliance filing to be effective December 3, 2019, subject to a further 

compliance filing as discussed below. We direct PJM to file the compliance filing within 

60 days of the date of issuance of this order.

As a preliminary matter, we find that PJM has complied with the following 

requirements of Order No. 841: (1) ensure that a resource using the participation model 

for electric storage resources can be dispatched and can set the wholesale market clearing 

price as both a wholesale seller and wholesale buyer, consistent with rules that govern the 

conditions under which a resource can set the wholesale price;19 (2) demonstrate that its 

market design will not allow for conflicting supply offers and demand bids from the same 

resource for the same market interval or modify its market rules to prevent conflicting 

supply offers and demand bids from the same resource for the same market interval;20

and (3) ensure that resources available for manual dispatch as a wholesale buyer and 

wholesale seller under the participation model for electric storage resources are held 

harmless for manual dispatch by being eligible for make-whole payments.21 PJM’s 

compliance with these requirements is not contested in this proceeding. All remaining 

compliance requirements and all comments and protests are addressed below.

 18 Below we do not discuss issues concerning compliance with Order No. 841 

regarding the definition of electric storage resource because the Commission accepted 

PJM’s compliance with that part of Order No. 841 in the First Compliance Order. 

19 Order No. 841, 162 FERC ¶ 61,127 at PP 142-150. See Compliance Filing, 

Transmittal at 12-13, 31-32, 36, 51-52 and Attachment A; Data Request Response at 15 –

17. See also Tariff, Attachment K-Appendix, §§ 1.7.2, 1.7.2B and Tariff, Attachment K, 

§ 1.4A.

20 Order No. 841, 162 FERC ¶ 61,127 at PP 162-165. See Compliance Filing, 

Transmittal at 49-50; Data Request Response at 18-19. See also Tariff, Attachment KAppendix, § 1.4A.

21 Order No. 841, 162 FERC ¶ 61,127 at PP 174-179. See Compliance Filing, 

Transmittal at 53 – 54 (citing Manual 28: Operating Agreement Accounting, §5); Data 

Request Response at 20-23. See also Tariff, Attachment K-Appendix, § 3.2.3.
Docket No. ER19-469-000, et al. - 7 -

1. Creation of a Participation Model

a. Participation Model

Order No. 841 adds section 35.28(g)(9)(i) to the Commission’s regulations to 

require that each RTO/ISO have tariff provisions providing a participation model for 

electric storage resources consisting of market rules that, recognizing the physical and 

operational characteristics of electric storage resources, facilitate their participation in the 

RTO/ISO markets.22 Order No. 841 explains that establishing a participation model for 

electric storage resources does not preclude an RTO/ISO from structuring its markets 

based on the technical requirements that a resource must meet to provide needed services;

it simply requires that each RTO/ISO establish a participation model that ensures 

eligibility to participate in the RTO/ISO markets in a way that recognizes the physical 

and operational characteristics of electric storage resources.23 Order No. 841 requires 

that resources using the participation model for electric storage resources be compensated 

for the wholesale services they provide in the same manner as other resources that 

provide these services.

Separate participation models are not necessary for different types of electric 

storage resources (e.g., slower, faster, or aggregated), and to the extent an RTO/ISO 

seeks to include in its tariff additional market rules that accommodate electric storage 

resources with specific physical and operational characteristics, the RTO/ISO may 

propose such revisions to its tariff through a separate FPA section 205 filing.

24 However,

Order No. 841 states that, where an RTO/ISO already has a separate participation model

that electric storage resources may use (such as participation models for pumped-hydro 

resources or demand response), the RTO/ISO is not required to consolidate that 

participation model with the participation model for electric storage resources required by 

Order No. 841.25 To the extent that an RTO/ISO modifies existing participation models

to comply with Order No. 841, it must ensure that those resulting participation models are

available for all types of electric storage resources and comply with all of the Order No. 

841 requirements.

 22 Order No. 841, 162 FERC ¶ 61,127 at P 51.

23 Id. P 52.

24 Id. P 54 (citing 16 U.S.C. § 824d). In Order No. 841-A, the Commission found

that a single participation model can be designed to be flexible enough to accommodate 

any type of electric storage resource. Order No. 841-A, 167 FERC ¶ 61,154 at P 65.

25 Order No. 841, 162 FERC ¶ 61,127 at P 55.
Docket No. ER19-469-000, et al. - 8 -

Lastly, Order No. 841 explains that, while the participation model for electric 

storage resources should be designed to facilitate the participation of all types of electric 

storage technologies, the Commission is not requiring all electric storage resources to use 

that participation model.26 Under section 35.28(g)(9) of the Commission’s regulations, 

section 35.28(g)(9)(i) applies to resources using the participation model for electric 

storage resources and section 35.28(g)(9)(ii) applies to all electric storage resources that 

fall under the definition of electric storage resources. Therefore, electric storage 

resources that elect not to use the participation model for electric storage resources are 

still able to pay the wholesale LMP for the electric energy they purchase from the 

RTO/ISO markets and then resell back to those markets. This issue is discussed further 

in the Energy Used to Charge Electric Storage Resources section below. 

i. Filing

PJM explains that Energy Storage Resources are already eligible to and do 

participate in PJM’s capacity, energy, and ancillary services markets.27 PJM states that, 

for instance, pumped-hydro resources, which fall within PJM’s definition of Energy 

Storage Resource, are active participants in PJM’s markets.28 However, PJM states that 

its current eligibility and market rules do not entirely meet the Commission’s directive to 

remove barriers to entry for electric storage resources.29 PJM asserts that it evaluated and 

proposes the necessary modifications to the capacity, energy, and ancillary services 

markets and associated support areas to ensure that its proposed Storage Participation 

Model recognizes the physical and operational characteristics of Energy Storage 

Resources and is consistent with all requirements of Order No. 841. 

PJM asserts that, under the proposed Storage Participation Model, Energy Storage 

Resources will be eligible to provide all services that they are technically capable of 

providing in PJM’s capacity, energy, and ancillary services markets.30 PJM further states 

that Energy Storage Resources using the Storage Participation Model can be dispatched 

and will be able to set price while discharging and charging.31 PJM explains that Energy 

 26 Id. P 56.

27 Compliance Filing, Transmittal at 7.

28 Id. at 7 n.10.

29 Id. at 7.

30 Id.

31 Id.
Docket No. ER19-469-000, et al. - 9 -

Storage Resources will participate in the energy market under three different modes of 

operation: (1) continuous mode; (2) charge mode; and (3) discharge mode.32 PJM 

proposes to account for the physical and operational characteristics of Energy Storage 

Resources through bidding parameters in PJM Markets Gateway,

33 and explains that 

Energy Storage Resources will self-manage their State of Charge by updating their 

bidding parameters and operating mode as needed.

34 PJM explains that resources using 

the Storage Participation Model are allowed to participate in PJM’s markets as a 

wholesale seller and wholesale buyer.35 According to PJM, its current 100 kW 

participation threshold is consistent with the Commission’s minimum size threshold 

requirement.36 In addition to PJM’s proposed tariff revisions, PJM states that it will need 

to make changes to its manuals to implement the Storage Participation Model and these 

changes will be developed and vetted through PJM’s stakeholder process prior to 

implementation on December 3, 2019.37

PJM states that, under its preexisting rules, an Energy Storage Resource utilizing 

the pumped-hydro optimizer cannot set a negative dispatchable range or set price in the 

day-ahead or real-time markets.38 PJM also states that an Energy Storage Resource selfscheduling or utilizing the pumped-hydro optimizer is assumed to have no costs

associated with charging or discharging. Thus, in line with the Commission’s 

acknowledgement that RTOs/ISOs are not required to consolidate existing electric 

storage resource models into those arising from Order No. 841 compliance, PJM states 

that it is not integrating the pumped-hydro optimizer with its proposed Storage 

Participation Model.

39 Instead, PJM explains that its proposed Storage Participation 

 32 Id. at 33-36.

33 PJM explains that its Markets Gateway is a tool that allows members to submit 

information and obtain data needed to conduct business in the day-ahead, regulation and 

synchronized reserve markets. Id. at 8 n.12 (citing Markets Gateway, PJM Interconnection, 

L.L.C., https://www.pjm.com/markets-and-operations/etools/markets-gateway.aspx).

34 Id. at 32-33. State of Charge is discussed further in section 4 below.

35 Id. at 12-13.

36 Id. at 8.

37 Id. at 5.

38 Id. at 30.

39 Id. at n.84.
Docket No. ER19-469-000, et al. - 10 -

Model addresses these shortfalls by accounting for the unique operating characteristics of 

Energy Storage Resources and allowing them to set price.40

ii. Protests/Comments

Several commenters raise concerns with the compatibility of PJM’s proposed 

Storage Participation Model and pumped-hydro resources. SEIA argues that the 

Commission should maximize the use of Energy Storage Resources and should not force 

them to use outdated participation models based on long-duration pumped-hydro 

models.41 Dominion contests PJM’s decision to continue to use its existing pumpedhydro optimizer without modifying it to comply with Order No. 841. More precisely, 

Dominion states that it has long advocated for PJM to make pumped-hydro resources 

eligible to set LMP when they are dispatchable in real-time because doing so would 

improve price transparency and market efficiency.42 Dominion explains that pumpedhydro resources utilizing PJM’s pumped-hydro optimizer are limited to self-scheduling as 

non-dispatchable resources in real-time and are unable to submit their dispatch costs in 

the form of real-time offers, and thus unable to set energy prices.43 Dominion states that 

restricting pumped-hydro resources to self-scheduling in real-time results in detrimental 

market effects, such as the application of operating reserve deviation charges.44 

While Dominion acknowledges that the Commission did not require RTOs/ISOs 

to extend the ability to set price to existing electric storage resource participation models, 

Dominion argues that the design of PJM’s proposed Storage Participation Model is 

“largely incompatible” with pumped-hydro resources, and expresses concern that the 

market benefits associated with the Storage Participation Model may not be fully realized 

with respect to pumped-hydro resources.

45 Specifically, Dominion explains that PJM’s 

proposed Storage Participation Model fails to consider a resource’s economic minimum, 

start-up costs, and the binary nature of pump-mode for non-variable speed pumps.46 

 40 Id. at 30-31.

41 SEIA Comments at 4-5.

42 Dominion Comments at 3-4.

43 Id. at 4.

44 Id. at 5. 

45 Id. at 3.

46 Id. at 4.
Docket No. ER19-469-000, et al. - 11 -

Additionally, Dominion asserts that there are size considerations in the case of large 

pumped-hydro resources that require notification to PJM prior to the startup or shutdown 

of a generator or pump. 

Voith Hydro urges the Commission and the RTOs/ISOs to account for the

technical capability of pumped-hydro resources in providing a number of services in the 

RTO/ISO markets. Voith Hydro states, for example, pumped-hydro resources have the 

ability to: (1) provide reliable, long duration generation capacity; (2) deliver energy from 

all sources (e.g., pumped-hydro resources can store excess energy generated by nuclear 

plants during off-peak hours and then release the energy back to the grid during peak 

hours); (3) provide spinning and non-spinning reserves; (4) provide black start 

capabilities; and (5) set the wholesale market clearing price.47

Energy Storage Association, NextEra, and Union of Concerned Scientists assert

that PJM’s filing does not address the ways in which Order No. 841 compliance impacts 

the market participation of hybrid resources, i.e., Energy Storage Resources co-located at 

the same point of interconnection with generation.

48 Union of Concerned Scientists 

states that there is no participation model available for hybrid resources and a growing 

number of hybrid resources in PJM’s interconnection queue, and that the lack of clarity 

on market participation for hybrid generation resources is a barrier to participating in 

PJM’s markets.49 Union of Concerned Scientists adds that some of the barriers for hybrid 

resources are analogous to those that have been addressed for combined cycle plants or 

coal plants that have discontinuous operating modes and output ranges.50 Union of 

Concerned Scientists notes that PJM has previously promoted hybrid resources as a 

means to meet the obligations of the new Capacity Performance construct.51 However, 

Union of Concerned Scientists asserts that PJM has failed to provide the means for a 

project proponent to interconnect, register, and operate a hybrid resource in the capacity 

market as a single asset because the storage portion of a hybrid resource is required to 

 47 Voith Hydro Comments at 2-7.

48 See Energy Storage Association Comments at 16; NextEra Comments at 6-7; 

Union of Concerned Scientists Comments at 6. 

49 Union of Concerned Scientists Comments at 8-9. 

50 Id. at 11.

51 Id. at 14. Capacity Performance is a capacity product that is used to ensure that 

PJM’s capacity market provides adequate incentives for resource performance.
Docket No. ER19-469-000, et al. - 12 -

provide a unique interconnection request, interconnection agreement, and asset 

registration.52 

Energy Storage Association similarly states that questions remain as to under 

which category hybrid resources could register; how they are parameterized in market 

software; their capacity value; how they interconnect; and other issues.53 Given the lack 

of clarity on these issues, Energy Storage Association recommends the Commission open 

a new docket to address this matter, which will ensure that RTO/ISO tariffs keep pace 

with technological innovation that aims to reduce costs and increase competition in 

wholesale markets.54

iii. Answer

PJM states that several commenters identified and requested clarification on 

ancillary and other implementation details not specifically addressed in either Order 

No. 841 or its proposal.55 PJM argues these details are best addressed through the 

stakeholder process and, to the extent they are beyond the scope of Order No. 841, 

through separate FPA section 205 filings outside the compliance process.

With respect to commenters’ concerns that PJM’s proposal does not address 

“hybrid resources,” such as Energy Storage Resources co-located with natural gas-fired 

or renewable resources,56 PJM states that the Commission does not utilize the term 

“hybrid” anywhere in Order No. 841, and that the Storage Participation Model outlined in 

PJM’s proposal will be available to any Energy Storage Resource, regardless of whether 

or not it is co-located with another resource type.57 PJM states that it is currently 

working both internally and with stakeholders to better clarify and define rules for hybrid 

resources to participate in PJM’s capacity, energy, and ancillary services markets.58

 52 Union of Concerned Scientists Comments at 16-17. 

53 Energy Storage Association Comments at 16. 

54 Id. at 2, 16. 

55 PJM March 5, 2019 Answer at 28.

56 Id. at 30 (citing Energy Storage Association Comments at 16, Union of 

Concerned Scientists Comments at 14-15).

57 Id. at 30-31.

58 Id. at 31.
Docket No. ER19-469-000, et al. - 13 -

iv. Data Request Response

PJM states that, as applied to pumped-hydro resources, its proposed Storage 

Participation Model meets each of the requirements identified in the Commission’s 

regulations.59 PJM states that all Energy Storage Resources, including pumped-hydro

resources, may elect to participate in its Storage Participation Model, and are eligible to 

set price and be dispatchable.60 PJM states that its Storage Participation Model accounts 

for the physical and operational characteristics of pumped-hydro resources because: 

(1) it includes separate charge and discharge modes to accommodate resources that 

cannot transition seamlessly between charging and discharging, and (2) charge and 

discharge modes do not require an instantaneous ramp rate. 

v. Commission Determination

We find that PJM’s proposed tariff revisions partially comply with the requirement 

of Order No. 841 to create a participation model for electric storage resources that ensures

the eligibility of such resources to participate in PJM’s markets in a way that recognizes 

their physical and operational characteristics. Specifically, we accept PJM’s proposal to 

allow Energy Storage Resources to be dispatched and to participate under three different 

modes of operation: (1) continuous mode; (2) charge mode; and (3) discharge mode. We 

find that this proposal will allow resources using the Storage Participation Model to be 

compensated for the wholesale services that they provide in the same manner as other 

resources that provide these services. 

However, we find that PJM has failed to sufficiently specify the Storage 

Participation Model in its Tariff because its proposed Tariff language does not include 

the model’s three modes of operation described in its filing and data request response. 

As explained above, Order No. 841 requires that each RTO/ISO have tariff provisions 

providing a participation model for electric storage resources consisting of market rules 

that, recognizing the physical and operational characteristics of electric storage resources, 

facilitate their participation in the RTO/ISO markets.61 We find that the three modes of 

operation PJM proposes are fundamental components of PJM’s Storage Participation 

Model, which significantly affect rates, terms, and conditions of service,

62 and therefore, 

are market rules that must be specified in PJM’s tariff, as required by Order No. 841. 

 59 Data Request Response at 2-3.

60 Id. at 3.

61 Order No. 841, 162 FERC ¶ 61,127 at P 51.

62 See Energy Storage Ass’n v. PJM Interconnection, L.L.C., 162 FERC ¶ 61,296, 

at P 103 (2018) (ESA v. PJM).
Docket No. ER19-469-000, et al. - 14 -

Thus, we direct PJM to file, within 60 days of the date of issuance of this order, a further 

compliance filing proposing language describing the three modes of Energy Storage 

Resource participation in the energy market (i.e., continuous, charge, discharge) in PJM’s 

Tariff.

Regarding the treatment of pumped-hydro resources, PJM has demonstrated that 

its proposed Storage Participation Model is available to all electric storage technologies, 

including pumped-hydro resources, and thus PJM’s proposed model complies with Order 

No. 841. Further, PJM’s Storage Participation Model allows all resources that are 

technically capable of simultaneously participating as supply and demand to do so. We 

note that PJM’s existing pumped-hydro optimizer will continue to be available to 

pumped-hydro resources, and that these resources may choose to participate in PJM’s 

markets using either the pumped-hydro optimizer or the Storage Participation Model. 

However, as PJM’s existing pumped-hydro optimizer is not a part of PJM’s proposal to 

comply with Order No. 841, and thus is outside the scope of this compliance proceeding, 

we will not address whether it complies with the requirements of Order No. 841.63 

In response to Dominion, we note that Order No. 841 does not require RTOs/ISOs 

to consider a resource’s economic minimum, start-up costs, or the binary nature of pumpmode for non-variable speed pumps. As discussed below under the section concerning

Relationship Between Electric Storage Participation Model and Existing Market Rules, 

we find that PJM allows Energy Storage Resources to include relevant costs, including 

opportunity costs, in their energy market offers and bids, similar to other market 

participants, when appropriate. Therefore, while PJM’s proposed model does not specify

start-up or related commitment costs for these resources, we find that its proposed 

treatment of Energy Storage Resources is consistent with how it treats other generators 

with respect to allowable cost recovery.

We find commenters’ concerns that PJM’s Storage Participation Model does not 

fully recognize the physical and operational characteristics of co-located resources 

beyond the scope of compliance with Order No. 841. We note that in Order No. 841, 

the Commission did not address co-location of electric storage resources with other 

resources. As PJM explains, its proposed Storage Participation Model will be available 

to any Energy Storage Resource, regardless of whether or not it is co-located with 

another resource type. 

 63 Order No. 841, 162 FERC ¶ 61,127 at P 55.
Docket No. ER19-469-000, et al. - 15 -

b. Qualification Criteria for the Participation Model 

To ensure that the electric storage resource participation model will accommodate 

both existing and future technologies, and to implement the new requirement in 

section 35.28(g)(9)(i) of the Commission’s regulations, Order No. 841 requires

each RTO/ISO to define in its tariff the criteria that a resource must meet to use the 

participation model (i.e., qualification criteria).64 These criteria must: (1) be based on 

the physical and operational characteristics of electric storage resources, such as their 

ability to both receive and inject electric energy; (2) not limit participation under the 

electric storage resource participation model to any particular type of electric storage 

resource or other technology; and (3) ensure that the RTO/ISO is able to dispatch a 

resource in a way that recognizes its physical and operational characteristics and 

optimizes its benefits to the RTO/ISO.

Order No. 841 provides each RTO/ISO with flexibility to propose qualification 

criteria that best suit its participation model for electric storage resources.

65 However, the 

qualification criteria should not create barriers to the participation of any electric storage 

resource in the RTO/ISO markets and should be inclusive of, at a minimum, those 

resources set forth under the definition of electric storage resources in Order No. 841.66

i. Filing

PJM states that its proposed qualification criteria are based on the ability of 

Energy Storage Resources to both receive and inject energy and allow any resource 

satisfying the definitions of Energy Storage Resource and/or Capacity Storage Resource

to participate in the Storage Participation Model.

67 PJM states that, currently, an Energy 

Storage Resource may participate in PJM’s markets only as a market seller, and that such 

resource’s ability to both buy and sell at wholesale render them distinct from market 

buyers under the current Tariff rules.

68 Therefore, PJM proposes to expand its current 

 64 Order No. 841, 162 FERC ¶ 61,127 at P 61.

65 Id. P 63.

66 Id.

67 Compliance Filing, Transmittal at 16.

68 Id. at 12-13.
Docket No. ER19-469-000, et al. - 16 -

market rules to allow Energy Storage Resources to both buy and sell at wholesale and to 

adopt new rules regarding purchases and sales unique to Energy Storage Resources.

69

PJM proposes to modify its tariff to allow Energy Storage Resources to purchase 

energy directly from PJM.70 PJM states that the proposed revisions remove barriers to 

entry for Energy Storage Resources by eliminating the requirement that only “market 

buyers” can purchase energy. PJM explains that market buyers are subject to certain 

qualification criteria (such as obtaining transmission service) that may be inconsistent 

with the unique characteristics of Energy Storage Resources. Therefore, PJM proposes

revisions to allow Energy Storage Resources to purchase from PJM without triggering all 

market buyer responsibilities as would be the case if PJM were to simply define them as

market buyers.

71

To ensure that an Energy Storage Resource can only purchase energy from PJM if 

it is a sale for resale in interstate commerce, PJM proposes to limit Energy Storage 

Resource purchases to purchases of energy that are stored for later resale to PJM.72 PJM 

also proposes a new defined term, “Direct Charging Energy,” to refer to energy that is 

purchased from PJM markets, stored, and returned to PJM’s markets or lost to conversion 

inefficiencies.73 To provide additional clarity regarding the criteria for purchases and 

sales under the Storage Participation Model, PJM proposes to define an Energy Storage 

Resource Model Participant (Storage Model Participant) as an Energy Storage Resource

utilizing the Storage Participation Model.

74

 69 Id. at 13.

70 Id. (citing proposed Tariff, Attachment K-Appendix, §§ 1.7.2, 1.7.2B).

71 Id. at 13.

72 Id. at 14 (citing proposed Tariff, Attachment K-Appendix, § 1.4A.1(a)).

73 Id. at 14-15.

74 Id. at 15; proposed Tariff, Definitions – E – F.
Docket No. ER19-469-000, et al. - 17 -

PJM further proposes to set forth specific criteria for wholesale energy market 

purchases by Energy Storage Resources utilizing the Storage Participation Model.

75

These criteria are modeled after the purchasing limitations and transmission service 

requirements for market buyers.76

ii. Data Request Response

PJM submitted several revised tariff records to provide additional clarity in 

response to Commission staff’s questions regarding the ability of an Energy Storage

Resource to set prices in PJM’s markets as either a wholesale seller or a wholesale buyer. 

Relevant here, PJM revised its proposed section 1.4A.1 (Qualification) to Schedule 1 of 

PJM’s Operating Agreement, which specifies the qualification criteria for the Storage 

Participation Model.

77 The revisions include an option for Energy Storage Resources to 

opt into and out of the Storage Participation Model on an annual basis. The revisions 

specify that Storage Model Participants will be eligible to be dispatched for positive and 

negative megawatts (MW), to set price at positive and negative MW points on their offer 

curve, and to self-schedule positive and negative MW quantities, pursuant to the 

requirements of the PJM Manuals. The revisions require Energy Storage Resources in 

continuous mode to specify a single energy offer curve with monotonically increasing 

dollar values including both positive and negative MW quantities and require all Storage

Model Participants to be responsible for their own State of Charge management. The 

revisions further specify that Storage Model Participants may offer quantities (including 

charging and discharging) equivalent to 0.1 MW or greater into all applicable PJM 

markets.78

iii. Commission Determination

We find that PJM complies with the requirement in Order No. 841 to define in its 

tariff the criteria that a resource must meet to use the Storage Participation Model (i.e., 

qualification criteria). We find that PJM’s qualification criteria are based on the physical 

and operational characteristics of electric storage resources because they are based on the 

ability of such resources to both receive and inject electric energy and allow any resource 

satisfying the Energy Storage Resource definition to participate in the Storage 

Participation Model. We therefore find that PJM’s qualification criteria are inclusive of 

 75 Compliance Filing, Transmittal at 15 (citing proposed Tariff, Attachment KAppendix, § 1.4A.1(b)).

76 Id. (citing Tariff, Attachment K-Appendix, § 1.4).

77 Data Request Response, Attachment A at 14.

78 Id. at 15-16; proposed Tariff, Attachment K-Appendix, § 1.4A.1.
Docket No. ER19-469-000, et al. - 18 -

those resources set forth under the Commission’s definition of an electric storage 

resource and do not limit participation under the Storage Participation Model to any 

particular type of electric storage resource or other technology. We also find that PJM’s 

qualification criteria ensure that PJM is able to dispatch a Storage Model Participant in a 

way that recognizes its physical and operational characteristics and optimizes its benefits 

to PJM. 

c. Relationship between Electric Storage Participation 

Model and Existing Market Rules

To provide certainty to resources using the electric storage resource participation 

model about the market rules that will govern their participation in each RTO/ISO 

market, and to implement the new requirement in section 35.28(g)(9)(i) of the 

Commission’s regulations, Order No. 841 requires each RTO/ISO to propose any 

necessary additions or modifications to its existing tariff provisions to specify:

(1) whether resources that qualify to use the participation model will participate in the 

RTO/ISO markets through existing or new market participation agreements; and 

(2) whether particular existing market rules apply to resources participating under the 

electric storage resource participation model.79 Order No. 841 allows the use of one or 

more existing market participation agreements so long as the agreement(s) complies(y)

with the terms of Order No. 841.80

i. Filing

PJM states that it was not necessary to modify some aspects of its market rules in 

order to implement the proposed Storage Participation Model, including the capacity 

must-offer requirement; determination of capacity value; the day-ahead market mustoffer requirement; determining performance under Capacity Performance rules; providing 

a “non-energy” resource option in the frequency regulation market; rules governing 

reactive supply and reactive service; requirements for black start service; real-time 

telemetry requirements; and rules governing sales at LMP.

81 PJM further states, as noted 

above, that it will not require resources currently operating in its capacity, energy, and/or 

ancillary services markets utilizing PJM’s pumped-hydro optimizer to instead utilize the 

Storage Participation Model. 82 PJM explains that such resources that satisfy the criteria 

 79 Order No. 841, 162 FERC ¶ 61,127 at P 68.

80 Id. P 69.

81 Compliance Filing, Transmittal at 3-4.

82 Id. at 6.
Docket No. ER19-469-000, et al. - 19 -

for the Storage Participation Model can select the model in which they would like to 

participate annually.

83 

PJM states that, with respect to existing rules, its current interconnection process 

supports the interconnection of Energy Storage Resources to participate in PJM’s 

capacity, energy, and ancillary services markets, and therefore, PJM does not propose any 

revisions to the Tariff or Operating Agreement to facilitate interconnection for resources 

utilizing the Storage Participation Model.

84 PJM states that, whether interconnected at 

the transmission or distribution level or behind a customer meter, PJM treats Energy 

Storage Resources in the same manner it treats all other resources requesting to 

interconnect to participate in PJM’s capacity, energy, and/or ancillary services markets.85 

Specifically, PJM states that, as with all other generation interconnection 

customers seeking to interconnect, Energy Storage Resources will be required to provide 

information such as one-line diagrams, operating configurations, and operating 

parameters.86 PJM states that, consistent with current practice, it will perform the 

appropriate studies for Energy Storage Resources based on their maximum facility output 

and requested Capacity Interconnection Rights.87 PJM explains that, upon completion of 

the relevant studies, the Energy Storage Resource connecting at the transmission level or 

at a distribution point where a prior jurisdictional sale has occurred will execute an 

Interconnection Service Agreement.88 Energy Storage Resources interconnecting at the 

 83 Id. at 6, 18.

84 Id. at 9-11 (citing Tariff, Parts IV (Interconnections with the Transmission 

System) & VI (Administration and Study of New Service Requests; Rights Associated 

with Customer – Funded Upgrades)).

85 Id. at 9.

86 Id. at 9-10 (citing Tariff, § 36.1.01).

87 Id. at 10 (citing Tariff, §§ 36, 110). Capacity Interconnection Rights are the 

rights to participate as a Generation Capacity Resource and inject energy into the 

Transmission System and the Point of Interconnection where the generation 

interconnection facilities connect to the Transmission System. Id. (citing Tariff, § 1, 

Definitions – C-D).

88 Id. (citing Tariff, § 110.5).
Docket No. ER19-469-000, et al. - 20 -

distribution level where no prior Commission-jurisdictional interconnection has occurred 

will execute a Wholesale Market Participation Agreement.89

PJM states that it does not need to modify the current requirements for quantifying 

Capacity Interconnection Rights.90 PJM states that Energy Storage Resources entering 

the new services queue may request Capacity Interconnection Rights in the lesser of the 

amount of power discharge (in units of MW) that can be sustained for 10 continuous 

hours, or the size of the generator hardware.91 PJM states that this requirement aligns 

with the treatment of Energy Storage Resources currently operating in PJM today (e.g., 

pumped-hydro facilities).92

PJM also proposes to continue to apply the same offer development rules under 

the Storage Participation Model that it currently applies to all generation resources 

submitting cost-based offers.93 PJM states that all dispatchable resources participating in 

the energy markets are required to provide a cost-based offer to be eligible for economic 

dispatch. However, PJM states that, in order to specify the components of cost-based 

offers for Energy Storage Resources, it proposes to modify its Operating Agreement to 

clarify that their cost-based offers may include charging costs.94 PJM also proposes to 

modify its Operating Agreement to clarify that the fuel costs of Energy Storage 

Resources shall include costs to charge for later injection onto the grid.95 PJM recognizes 

that Energy Storage Resources should be able to document their incremental costs to 

provide energy and plans to engage stakeholders and PJM’s Market Monitor to develop 

revisions to PJM Manual 15 (Cost Development Guidelines) to identify allowable costs 

 89 Id. (citing PJM Manual 14A: New Services Request Process, PJM 

Interconnection, L.L.C., § 5.7 (rev. 24, July 26, 2018), https://pjm.com/-

/media/documents/manuals/m14a.ashx).

90 Id. (citing Tariff, § 230). 

91 Id. at 10-11 (citing PJM Manual 21: Rules and Procedures for Determination 

of Generating Capability, PJM Interconnection, L.L.C., § 2.1(13) (rev. 12, Jan. 1, 2017), 

https://pjm.com/-/media/documents/manuals/m21.ashx).

92 Id. at 11.

93 Id. at 51.

94 Id.; Compliance Filing, Operating Agreement, Schedule 2, § 1.1.

95 Compliance Filing, Transmittal at 51-52; Compliance Filing, Operating 

Agreement, Schedule 2, § 2.5.
Docket No. ER19-469-000, et al. - 21 -

to be included in cost-based offers prior to the December 3, 2019 implementation date.96 

PJM explains that it will not permit Energy Storage Resources to submit Start-Up Costs 

and No-Load Costs because the resource owner will control commitment decisions 

through management of its State of Charge. 

ii. Protests/Comments

Public Interest Organizations express concern that PJM’s interconnection process 

could be a barrier to market access for Energy Storage Resources.

97 Public Interest 

Organizations state that PJM’s proposal requires Energy Storage Resources located on a 

distribution system or behind the meter to go through the wholesale interconnection 

process prior to market participation, even if they are properly interconnected under their 

distribution authority. Public Interest Organizations add that, even if these resources are 

rejected by PJM’s interconnection studies, they remain able to inject and withdraw power 

under their distribution tariffs, which renders PJM’s studies moot for transmission impact 

purposes. Public Interest Organizations also argue that the fact that PJM does not require 

studies for distributed or behind-the-meter resources connected under net metering tariffs 

results in discriminatory treatment of resources that are physically identically situated 

based purely on their desired market participation.98 

FirstEnergy Utilities/Dayton P&L/EKPC request that the Commission require that 

PJM ensure that an Energy Storage Resource interconnected at the distribution level has 

satisfied all electric distribution utility interconnection, operational, and metering 

requirements before allowing it to participate in PJM’s wholesale markets.

99 FirstEnergy 

Utilities/Dayton P&L/EKPC request that the Commission direct PJM to defer to electric 

distribution utilities, in consultation with affected state commissions, on implementation 

and coordination issues at the electric distribution level. They argue that the electric 

distribution utilities, not PJM, should take the lead on implementing PJM’s proposal for 

Energy Storage Resources that are interconnected at the distribution level. They assert 

that PJM’s proposal fails to designate either a direct or indirect role for distribution 

utilities and state commissions in its implementation and does not acknowledge that 

distribution utilities and state commissions will need to revise and/or develop processes 

and standards to reliably and safely integrate large-scale Energy Storage Resources onto 

 96 Compliance Filing, Transmittal at 52.

97 Public Interest Organizations Comments at 23.

98 Id. at 23-24.

99 FirstEnergy Utilities/Dayton P&L/EKPC Comments at 3.
Docket No. ER19-469-000, et al. - 22 -

the distribution system.100 They contend that distribution utilities will need to work with 

affected state commissions to implement revised interconnection processes, including 

revised interconnection standards and technical requirements for Energy Storage 

Resources; develop or revise methodologies to study their potential impact on the 

distribution system; and establish processes, rates, and tariffs regarding cost allocation for 

upgrades or reinforcements to the distribution system that are required to maintain 

reliability and safety due to the interconnection of an Energy Storage Resource.

101 

FirstEnergy Utilities/Dayton P&L/EKPC further state that any necessary upgrades 

or reinforcements to the distribution system must be completed and paid for by an Energy 

Storage Resource before its interconnection can be finalized.102 They assert that state 

commissions will need to hold proceedings to update or establish retail tariffs providing

for interconnection fees and charges for Energy Storage Resources that desire to 

interconnect with and utilize the distribution system.103 They request that the Commission 

consider, once appropriate retail tariffs are in place, whether to roll out PJM’s proposal on 

a pilot basis while addressing overarching issues and developing “lessons learned” that 

can be applied during a wider rollout.104

FirstEnergy Utilities/Dayton P&L/EKPC also request that, to avoid disrupting the 

“cooperative federalism” that has existed between the Commission and the states, the 

Commission clarify that deployment of Energy Storage Resources on local distribution 

facilities must be subordinate to and not impinge on the operation and use of those facilities 

to provide service to retail customers.105 They further request that the Commission clarify 

that, while Energy Storage Resources may procure transmission service over local 

distribution facilities, the procurer of such service is subject to paying any and all 

incremental costs that are or may be required in order to provide such service.106 They 

state that, if Energy Storage Resources desire to procure “firm” transmission service over 

local distribution facilities, the Commission should affirm that such resources pay the costs 

 100 Id. at 5-6.

101 Id. at 6-10.

102 Id. at 9.

103 Id. at 10-11.

104 Id. at 3.

105 Id. at 12.

106 Id. at 13.
Docket No. ER19-469-000, et al. - 23 -

to “enlarge” the local distribution facilities to accommodate such service, and in the event 

that these resources are not willing to pay for “firm” service, then they must be prepared 

for interruptions as needed by the distribution utility to deliver adequate and reliable retail 

service to end-use customers.

The New Jersey Commission points out that PJM's proposal would retain all 

existing interconnection procedures for Energy Storage Resources, including that 

distribution points where prior Commission-jurisdictional sales have occurred require an 

Interconnection Service Agreement, placing that interconnection request under the 

jurisdiction of PJM’s Tariff.107 The New Jersey Commission thus seeks to confirm the 

jurisdiction over the distribution lines interconnecting Energy Storage Resources after a 

wholesale sale has occurred.

108 The New Jersey Commission is concerned that, over 

time, much of the distribution system may be relinquished to PJM-jurisdictional 

interconnection procedures and that the effect could erode the protections envisioned by 

the Commission and contravene Order No. 841.109 It therefore encourages the 

Commission to contemplate alternate methods for defining jurisdiction, rather than 

applying rigid methods, and to continue monitoring the jurisdictional issues as the Energy 

Storage Resource market reaches maturity.

110 Alternatively, the New Jersey Commission 

asks the Commission to place additional requirements on the coordination between 

wholesale market providers and distribution companies. Specifically, it argues that any 

Energy Storage Resource that chooses to participate in the wholesale markets should be 

required to receive an affirmation from the electric distribution company that such 

participation will not cause any issues on the distribution system and such affirmation 

should be state-jurisdictional.111

Advanced Energy Economy contends that, although PJM’s Cost Development 

Guidelines allow the inclusion of opportunity costs in cost-based offers, PJM did not 

address how Energy Storage Resources would calculate their opportunity costs for cost-

 107 New Jersey Commission Comments at 5 (citing Compliance Filing at section II.C, 

10 n.19).

108 Id. at 5.

109 Id. (citing Order No. 841, 162 FERC ¶ 61,127 at P 33 (“the definition of an 

electric storage resource excludes a resource that is either (1) physically incapable 

of injecting electric energy back onto the grid due to its design or configuration or 

(2) contractually barred from injecting electric energy back onto the grid”)).

110 Id. at 6.

111 Id. at 6-7.
Docket No. ER19-469-000, et al. - 24 -

based offers in its compliance filing.112 Advanced Energy Economy asserts that 

calculation of an Energy Storage Resource’s opportunity cost is a key component of its 

reference level, and proposes that accurate calculation of opportunity costs for Energy 

Storage Resources co-located with load should include foregone avoided retail bills 

associated with demand charge management.113 Advanced Energy Economy states that 

PJM’s current opportunity cost calculation, based on forecasted energy prices, may not 

accurately calculate an Energy Storage Resource’s opportunity costs.114 Advanced 

Energy Economy asserts that, while opportunity costs not defined in the Operating 

Agreement may be submitted to PJM and PJM’s Market Monitor for approval pursuant to 

the Cost Methodology and Approval Process, such a process may be time consuming and 

the outcome is uncertain. Thus, Advanced Energy Economy requests the Commission 

direct PJM and PJM’s Market Monitor to provide further clarity regarding inclusion of 

Energy Storage Resources’ opportunity costs in cost-based energy offers over shorter 

time horizons and demand charge management.115

iii. Answers

PJM argues that, contrary to certain comments and protests, its current 

interconnection process is sufficient to accommodate all Energy Storage Resources

seeking to participate in PJM’s capacity, energy, and/or ancillary services markets.116 

PJM states that it treats them in the same manner as it treats all other resources requesting 

to interconnect, regardless of whether the resource is interconnected at the transmission 

level, distribution level, or behind a customer meter.117 PJM states that, consistent with 

current practice, any behind-the-meter generation wishing to transact in PJM’s energy 

markets may enter PJM’s New Services Queue and complete the requisite study process 

in the same manner as all Generation Interconnection Customers.118 PJM states that such 

 112 Advanced Energy Economy Comments at 9.

113 Id. at 9-10.

114 Id. at 9.

115 Id. at 10.

116 PJM March 5, 2019 Answer at 26-27 (citing FirstEnergy Utilities/Dayton 

P&L/EKPC Comments at 4).

117 Id. at 27.

118 Id. at 28 (citing PJM Manual 14A, § 5.7). PJM Manual 14A classifies parties 

seeking to do the following as Generation Interconnection Customers: 1) interconnect a 

new generation facility to PJM’s transmission system, 2) increase the capacity of an 
Docket No. ER19-469-000, et al. - 25 -

a resource sells any “net excess” energy to PJM; i.e., any Energy Storage Resource

discharging is first used to reduce on-site load, and only unused surplus power is injected 

onto the grid and sold at wholesale to PJM markets.119

FirstEnergy Utilities/Dayton P&L/EKPC filed an answer to PJM’s answer asserting

that PJM mischaracterizes their comments and conflates issues regarding distribution 

system operations and jurisdiction with the sufficiency of PJM’s interconnection 

process.120 According to FirstEnergy Utilities/Dayton P&L/EKPC, PJM’s answer 

provides incomplete information when it claims “[Energy Storage Resources] connecting 

at the local distribution level where no prior Commission-jurisdictional interconnection 

has occurred will execute a Wholesale Market Participation Agreement.”121 They state 

that an interconnection under these circumstances falls under state jurisdiction and the 

resource must go through the state-regulated interconnection process.122 They further 

state that PJM’s answer fails to acknowledge that, although the interconnection process is 

conducted by PJM when there is a prior wholesale interconnection on a distribution line, 

the interconnection is studied and completed in accordance with standards and 

requirements established by the distribution utility.123

FirstEnergy Utilities/Dayton P&L/EKPC also claim that PJM’s answer did not 

refute or address their concern that the large-scale integration of Energy Storage 

Resources interconnected at the distribution level with two-directional power flow could 

impact the ability of distribution utilities to fulfill their mandates under state law to 

provide reliable and safe retail electric service.124 

 

existing generation facility, 3) alter the fuel type of an existing facility or interconnection 

request, or 4) interconnect a generating unit to distribution facilities in the PJM footprint 

making wholesale sales using the output of the generating unit. PJM Manual 14A, §1.3, 

https://pjm.com/~/media/documents/manuals/m14a.ashx.

119 PJM March 5, 2019 Answer at 28.

120 FirstEnergy Utilities/Dayton P&L/EKPC Answer at 2.

121 Id. at 4 (citing PJM March 5, 2019 Answer at 27).

122 Id. at 4.

123 Id. at 5.

124 Id. at 6-7.
Docket No. ER19-469-000, et al. - 26 -

In response to Advanced Energy Economy’s argument that PJM has not explained 

how Energy Storage Resources will be able to calculate opportunity costs in their costbased offers, particularly opportunity costs associated with demand charge management, 

PJM states that it is working with stakeholders through special sessions of its Markets 

Implementation Committee to identify and account for allowable opportunity costs in 

Energy Storage Resources’ cost-based offers.125 PJM states that, consistent with the 

representations made in its proposal, this stakeholder process is intended to modify PJM 

Manual 15 (Cost Development Guidelines) prior to the December 3, 2019 Order No. 841 

implementation date.126

iv. Data Request Response

In response to a question from Commission staff regarding make-whole payments, 

PJM explains that, in order to account for unforeseen possibilities for lost opportunity 

costs for specific Energy Storage Resources, especially with respect to manual 

curtailments of Energy Storage Resource charging, PJM proposes to add a new 

subsection to its Tariff, Attachment K-Appendix.127 PJM’s proposed new section 

provides that if an Energy Storage Resource using the Storage Participation Model

believes that it is not accurately compensated for opportunity costs associated with 

following PJM manual dispatch instructions due to a transmission constraint or other 

reliability issue, then the Energy Storage Resource can receive a modified amount of 

opportunity cost compensation if it is mutually accepted by the resource, PJM and PJM’s 

Market Monitor.

128

v. Commission Determination

We find that PJM complies with the requirement of Order No. 841 to modify its 

Tariff to specify: (1) whether resources that qualify to use the participation model will 

participate in the RTO/ISO markets through existing or new market participation 

agreements and (2) whether particular existing market rules apply to resources 

participating under the Storage Participation Model. As PJM states, it is not necessary

for PJM to modify all aspects of its market rules in order to implement the proposed 

Storage Participation Model. The market rules that do not need to be modified include

the capacity must-offer requirement; determination of capacity value; the day-ahead 

 125 PJM March 5, 2019 Answer at 31.

126 Id. at 31-32.

127 PJM Data Request Response at 23; Tariff, Attachment K-Appendix, § 3.2.3.

128 PJM Data Request Response at 23.
Docket No. ER19-469-000, et al. - 27 -

market must-offer requirement; determining performance under Capacity Performance 

rules; providing a “non-energy” resource option in the frequency regulation market; rules 

governing reactive supply and reactive service; requirements for black start service; realtime telemetry requirements; and rules governing sales at LMP.

As to commenters’ concerns about PJM’s existing interconnection process, we 

find these concerns to be outside the scope of compliance with Order No. 841, which

does not reform or address any procedures pertaining to the interconnection of resources 

to transmission or distribution facilities.129 As the Commission acknowledged in Order 

No. 841-A, states have jurisdiction over the interconnections of certain resources to the 

distribution system and the requirements reasonably related to those interconnections.130 

We reiterate that nothing in Order No. 841 preempts the states’ right to regulate the safety 

and reliability of the distribution system and that all Energy Storage Resources must 

comply with any applicable interconnection and operating requirements.131 We find that 

PJM complies with Order No. 841 by appropriately specifying that it will apply existing 

rules governing its interconnection process to resources participating under the Storage 

Participation Model. 

In response to Advanced Energy Economy, we find that electric storage resources 

participating in RTO/ISO markets under the Storage Participation Model should be able 

to reflect relevant opportunity costs in their energy market offers and bids, similar to 

other market participants, when appropriate. For example, for electric storage resources 

to effectively self-manage their State of Charge, RTOs’/ISOs’ electric storage resource 

participation models may need to allow electric storage resources to account for 

opportunity costs associated with services provided to another entity outside the 

RTO/ISO markets.132 We note that determining whether a resource should be allowed to 

reflect opportunity costs and how such opportunity costs may be calculated can be 

complex and case specific. We find that PJM’s proposal to apply its existing market 

rules, with certain clarifications, is appropriate because PJM has an existing process that 

allows market participants to seek revisions to reference levels to account for appropriate 

 129 See Order No. 841-A, 167 FERC ¶ 61,154 at P 49.

130 Id. P 42.

131 Id. P 46.

132 See Order No. 841, 162 FERC ¶ 61,127 at PP 251, 256-257. Order No. 841 

recognizes that some RTOs/ISOs facilitate the participation of electric storage resources 

in the capacity market by relying on opportunity costs in incremental energy offer 

reference levels. Order No. 841 requires each RTO/ISO to demonstrate how such rules 

are applicable to resources using the participation model. Id. P 101. 
Docket No. ER19-469-000, et al. - 28 -

opportunity costs in consultation with PJM and PJM’s Market Monitor.133 We further

note PJM’s intention to modify its cost development guidelines in its manuals to account 

for allowable opportunity costs in cost-based offers prior to the December 3, 2019 

implementation date.

2. Eligibility of Electric Storage Resources to Participate in the 

RTO/ISO Markets

a. Eligibility to Provide all Capacity, Energy, and Ancillary 

Services

Order No. 841 adds section 35.28(g)(9)(i)(A) to the Commission’s regulations to 

require that each RTO/ISO have tariff provisions allowing a resource using the 

participation model for electric storage resources to be eligible to provide all capacity, 

energy, and ancillary services that it is technically capable of providing, including 

services that the RTOs/ISOs do not procure through an organized market, such as 

blackstart, primary frequency response, and reactive power services.134 Where an 

RTO/ISO has developed a standard set of technical requirements that all resources must 

meet to provide a given service, such requirements would also apply to a resource using 

the electric storage resource participation model if it wants to provide that service.

135 

A resource is “technically capable” of providing a service if the resource can meet 

all of the technical, operational, and/or performance requirements that are necessary to 

reliably provide that service, such as minimum run times to provide energy, or the ability 

to respond to automatic generation control to provide frequency regulation.136 In Order 

No. 841, the Commission noted that it is not considering in this proceeding the 

requirements that determine whether resources are technically capable of providing 

individual wholesale services. To the extent that an RTO/ISO seeks to revise its tariff 

provisions setting forth the technical requirements for providing any specific wholesale 

service, the Commission stated that the RTO/ISO may propose such revisions to its tariff 

 133 According to PJM’s Cost Development Guidelines, opportunity costs not defined 

in the Operating Agreement may be submitted to PJM and PJM’s Market Monitor for 

approval pursuant to the Cost Methodology and Approval Process. Manual 15, § 12.1.

134 Order No. 841, 162 FERC ¶ 61,127 at PP 76, 80.

135 Id. P 77.

136 Id. P 78. 
Docket No. ER19-469-000, et al. - 29 -

through a separate FPA section 205 filing.137 The Commission further stated that each 

individual electric storage resource must still meet the technical requirements of 

providing any specific service, which would be determined by the RTO/ISO on a caseby-case basis.138 In Order No. 841, the Commission encouraged each RTO/ISO to 

consider whether any modifications or additions to the existing technical requirements, 

testing protocols, or other qualification procedures are necessary to facilitate the 

participation of electric storage resources in its markets.139 

i. Filing

PJM states that its three-year forward capacity market, the Reliability Pricing 

Model or RPM, is “resource agnostic,” meaning the RPM clears offered resources not by 

resource type, but through an algorithm that matches offered MW to system demand in a 

least cost manner. Therefore, PJM states that its capacity requirements are met by 

utilizing all resources that are capable of meeting the operational and performance 

requirements of a Capacity Performance Resource, including Intermittent Resources 

(e.g., wind, solar, run-of-river hydroelectric), Energy Efficiency Resources, thermal 

generators, Demand Resources, and Capacity Storage Resources.

PJM states that, in compliance with Order No. 841, the Storage Participation 

Model includes a number of clarifications to PJM’s status quo capacity market operation 

to facilitate participation of Energy Storage Resources in the RPM.140 Specifically, 

PJM’s revised definition of Capacity Storage Resource includes all Energy Storage 

Resources and thus all Energy Storage Resources utilizing the Storage Participation 

Model will be eligible to participate in the RPM. 

PJM explains that it proposes to maintain the current provisions in its Tariff that: 

(1) exempt Capacity Storage Resources from the capacity must-offer requirement;

141

(2) require Capacity Storage Resources with a capacity obligation to offer into the day-

 137 Id. P 78 n.106.

138 Id. P 79.

139 Id. P 81.

140 Compliance Filing, Transmittal at 19.

141 Id.at 19 (citing Tariff, Attachment DD, § 6.6A).
Docket No. ER19-469-000, et al. - 30 -

ahead energy market;

142 and (3) define Capacity Storage Resources as eligible to 

participate as Capacity Performance Resources.143 According to PJM, a resource with a 

capacity obligation must be available to inject unless it has been rendered unavailable by 

a Generator Planned Outage, a Generator Maintenance Outage, or a Generator Forced 

Outage.

144 PJM states that its Tariff currently allows a Capacity Storage Resource to 

self-schedule (with or without a dispatchable range) or offer its unit as a dispatchable 

resource to meet its day-ahead must-offer obligation.

To account for Energy Storage Resources’ full range of operation and charge, PJM 

proposes to model their cost-based and market-based offer curves as continuous—with 

both positive and negative MW values.145 Energy Storage Resources participating in 

PJM’s markets would be allowed to enter a minimum and maximum operating range into 

PJM’s Markets Gateway and update those parameters throughout the operating day in 

accordance with their State of Charge.146 

With respect to operation in the day-ahead markets, PJM states that its market 

commitments are made on an hourly basis; as such, Energy Storage Resource participants in 

the day-ahead market would need to manage their State of Charge with the understanding 

that dispatch during the day-ahead market includes a duration of a minimum of one hour.

147 

PJM would rely on each resource’s operational mode and parameters to make dispatch 

decisions.148

 142 Id. at 28 (citing Tariff, Attachment K-Appendix, § 1.10.1A(d); Operating 

Agreement, Schedule 1, § 1.10.1A(d)).

143 Id. at 28-29 (citing Tariff, Attachment DD, § 5.5A).

144 Id. at 28 (citing Tariff, Attachment K-Appendix, § 1.10.1A(d); Operating 

Agreement, Schedule 1, §1.10.1A(d)).

145 Id. at 31.

146 Id. at 32.

147 Id. at 36 (citing PJM Manual 11, § 9.1).

148 Id. at 36.
Docket No. ER19-469-000, et al. - 31 -

To participate in PJM’s real-time market, an Energy Storage Resource’s market 

seller would be required to update the availability status of the resource 20 minutes 

before the hour—a practice consistent with current standards for other resources.149 With 

respect to the offers for a given hour, market sellers would be required to update their 

Energy Storage Resource’s operating mode 65 minutes before the hour along with other 

offer parameters that can be updated based on intraday offer rules.

150 As in the dayahead markets, participating Energy Storage Resources would be required to enter a ramp 

rate, Maximum Charge Limit, and Maximum Discharge Limit into the Markets Gateway, 

but would maintain the ability to edit these parameters intra-hour. PJM contends that it 

will not prohibit Energy Storage Resources from charging during peak periods, but as 

Energy Storage Resource installations increase, PJM intends to examine the impacts of 

charging times on system operations.151

PJM states that its current market rules allow Energy Storage Resources to 

participate in its ancillary services markets.152 Specifically, PJM explains that they are 

eligible to provide Synchronized Reserves, Non-Synchronized Reserves, Day-Ahead 

Scheduling Reserves, Regulation, Reactive Supply, and Black Start Service.153 PJM 

clarifies that it currently categorically excludes Energy Storage Resources from Tier 1 

Synchronized Reserves, but that they can request an exception to have their available 

headroom counted as Tier 1 Synchronized Reserve by the Ancillary Service Optimizer.154 

PJM proposes to retain this exception process for purposes of the Storage Participation 

Model. PJM states an Energy Storage Resource can offer in as Tier 2 Synchronized 

Reserves, and PJM will use its energy offer (or lost opportunity cost equal to $0) and 

dispatched basepoint to determine if it should be assigned reserves, similar to the practice 

for non-Energy Storage Resource generation.155 PJM clarifies that an Energy Storage 

Resource dispatched to zero MW will still be considered synchronized and able to offer 

Tier 2 in the Synchronized Reserve market, and that Energy Storage Resources may 

participate in the Synchronized Reserve market without an energy offer. Additionally, 

 149 Id. at 37 (citing PJM Manual 11, § 2.3.3).

150 Id. at 37.

151 Id. at 37-38.

152 Id. at 38.

153 Id. at 38-45.

154 Id. at 40.

155 Id. at 41.
Docket No. ER19-469-000, et al. - 32 -

PJM clarifies that an Energy Storage Resource physically disconnected from the grid and 

capable of providing energy within 10 minutes shall be treated as Non-Synchronized 

Reserve.156

PJM explains that its current rules categorically exempt Energy Storage Resources 

from the Day-Ahead Scheduling Reserve process, but that they can participate voluntarily 

by seeking an exception. PJM proposes to maintain this process under the Storage 

Participation Model.

157 PJM states that an Energy Storage Resource that wishes to clear 

in the Day-Ahead Scheduling Reserve market would need to inform PJM that it would 

like to be considered and would require an energy schedule.

PJM states that, under the Storage Participation Model, the range of an Energy 

Storage Resource’s Regulation offer will be a function of the operating limits specified 

for its continuous, charge, and discharge operating modes.158 PJM states that, to provide 

energy and regulation concurrently, an Energy Storage Resource may operate in any of 

the continuous, charge, and discharge operating modes, and that the market participant

will self-manage the Energy Storage Resource’s State of Charge by adjusting its 

operating limits. PJM also proposes to continue to offer a non-energy resource option, 

allowing Energy Storage Resources to provide Regulation service without an energy 

offer. PJM states its proposal is consistent with its current treatment of Energy Storage 

Resources providing Regulation service and ensures these resources can continue to 

participate in the Regulation market in a manner consistent with all other Regulation 

resources.

PJM explains that its current market rules require Energy Storage Resources with 

an executed Interconnection Service Agreement to have reactive capability in order to 

provide Reactive Supply, and that cost recovery for Reactive Supply is governed by 

Schedule 2 of PJM’s Tariff.

159 PJM further explains that an Energy Storage Resource

with an energy schedule dispatched to provide Reactive Service in real-time for reliability 

may receive payment for lost opportunity costs based on its energy offer.160

 156 Id. (citing PJM Manual, § 4b.2.1).

157 Id. at 42.

158 Id. at 43.

159 Id. at 43-44 (citing PJM Operating Agreement, Schedule 2).

160 Id. at 44 (citing Tariff, Attachment K-Appendix, § 3.2.2(i)).
Docket No. ER19-469-000, et al. - 33 -

PJM states that Energy Storage Resources are currently permitted to submit 

proposals in response to a PJM Black Start request for proposals if they meet all of the 

Black Start requirements, which include a minimum 16-hour duration or such other 

duration identified in the Transmission Owner’s restoration plan.161 PJM states that it 

does not propose any changes to this construct in the Storage Participation Model

because PJM’s Black Start Service rules expressly permit the submission of proposals by 

Energy Storage Resources.162

PJM proposes to utilize its current requirements for pumped-hydro resources in 

reporting outages under the Storage Participation Model.

163 PJM describes that,

currently, market participants with pumped-hydro resources in PJM are required to report 

an outage when a unit’s ability to meet its capacity obligation is limited by equipment. 

PJM explains that this requirement accounts for the fact that a pumped-hydro unit is not 

experiencing an “outage” every time the unit is unable to generate, such as when 

operating in pump mode. Thus, PJM explains that “out of charge” will not be considered 

an outage for the purposes of Equivalent Demand Forced Outage Rate (EFOR-d)164

calculation, unless the Energy Storage Resource was explicitly directed to discharge and 

was unable to do so due to lack of stored charge.165

ii. Protests/Comments

Calpine argues that PJM’s proposal inappropriately exempts Energy Storage 

Resources from certain capacity market operating requirements.166 For example, Calpine 

points to PJM’s proposal to not consider “out of charge” to be an outage for purposes of 

EFOR-d calculation.167 According to Calpine, “out of charge” for a battery resource is 

the same as being “out of gas” or “out of coal” for a gas or coal generator, respectively; 

as such, Calpine argues that if a gas or coal generator takes a forced outage because it 

 161 Id. at 44-45 (citing PJM Manual 13, § 3.1).

162 Id. at 45.

163 Id. at 46.

164 EFOR-d is defined in PJM’s manuals as the portion of time a unit is in demand, 

but is unavailable due to forced outages or deratings. PJM Manual 22, § 3.1.

165 Compliance Filing, Transmittal at 46.

166 Calpine Comments at 3. 

167 Id. (citing Compliance Filing, Transmittal at 4). 
Docket No. ER19-469-000, et al. - 34 -

runs out of fuel, its EFOR-d will be impacted, and there is no reason why an Energy 

Storage Resource should not receive the same treatment.168 Calpine contends that 

disparate treatment of similarly situated capacity resources is unjust, unreasonable, and 

otherwise unlawful. Moreover, Calpine argues that failure to account for an outage in a 

resource’s EFOR-d because the resource is “out of charge” will result in PJM incorrectly 

calculating the availability of capacity resources, which, in turn, will lead PJM to underprocure capacity resources and expose the system to potential reliability problems. 

Calpine further argues that a generator does not have the option to turn off after running 

for a certain number of hours unless mechanical failure necessitates a forced outage, and 

even then, a forced outage will impact the generator’s EFOR-d rating.169 Relatedly, 

PJM’s Market Monitor asserts that an Energy Storage Resource that is “out of charge” 

should be required to inform PJM of its unavailability and take an outage analogous to a 

lack-of-fuel outage.170 

Advanced Energy Economy argues that applying PJM’s existing Capacity 

Performance rules to Energy Storage Resources is unjust, unreasonable, and unduly 

discriminatory because the Capacity Performance construct was designed to give 

generators the incentive to improve their performance and firm their fuel supplies.171 

Advanced Energy Economy states that PJM did not provide support for applying its 

existing Capacity Performance rules to Energy Storage Resources without 

modification.172 Advanced Energy Economy claims the Capacity Performance rules 

could potentially punish Energy Storage Resources when they perform at their maximum 

capacity because, unlike generators, these resources do not have the ability to mitigate 

Non-Performance Charges through additional measures. 

Similarly, Tesla argues that Capacity Performance charges that are not limited to 

the physical capability of an Energy Storage Resource unduly discriminate against such 

resources and create barriers to participation in the capacity market.173 Tesla explains 

that PJM’s Capacity Performance rules require resources to be able to respond to calls 

 168 Id. at 4. 

169 Id. at 5.

170 PJM’s Market Monitor Comments at 7.

171 Advanced Energy Economy Comments at 12-13.

172 Id. at 13.

173 Tesla Comments at 11-12.
Docket No. ER19-469-000, et al. - 35 -

24 hours a day, 365 days a year, for an unlimited number of consecutive hours.174 Tesla 

argues that, while this requirement may promote performance for traditional generators, it 

unduly discriminates and effectively blocks participation of Energy Storage Resources by 

not recognizing their physical attributes. Tesla further expands that Capacity Performance 

rules potentially subject Energy Storage Resources to penalties for not performing beyond 

the resource’s physical capability, which creates a barrier to participation in PJM’s 

capacity market because Energy Storage Resources cannot effectively manage this 

financial risk.175

Tesla also asserts that current frequency regulation rules in PJM do not allow 

behind-the-meter Energy Storage Resources to inject energy onto the grid during the 

provision of Regulation service and asks the Commission to require PJM to allow such 

resources to utilize their full capacity for the provision of Regulation service.176

iii. Answer

PJM disagrees with commenters’ arguments that it is unjust and unreasonable to 

apply Capacity Performance penalties to Energy Storage Resources even if they are 

performing to the maximum extent of their physical and operational capacities.177 PJM 

argues that its current Capacity Performance rules clearly define and contemplate Energy 

Storage Resource participation, and that the Commission accepted those rules as just and 

reasonable as applied to all Capacity Performance Resources, including Energy Storage 

Resources.178

iv. Data Request Response

PJM provides several clarifications regarding which sections of its Tariff make 

Energy Storage Resources eligible to provide certain ancillary services. PJM clarifies 

that, under Tariff Section 1.7.19A, Energy Storage Resources will be eligible to provide 

both Tier 1 and Tier 2 Synchronized Reserve: “Synchronized Reserve can be supplied 

from non-emergency generation resources and/or Demand Resources located within the 

 174 Id. at 14-15.

175 Id. at 15.

176 Id. at 21.

177 PJM March 5, 2019 Answer at 24 (citing Advanced Energy Economy 

Comments at 12, Tesla Comments at 8).

178 Id. at 24-25 (citing Tariff, Attachment DD, § 10A).
Docket No. ER19-469-000, et al. - 36 -

metered boundaries of the PJM Region.”179 Regarding their eligibility to provide DayAhead Scheduling Reserve, PJM cites to the Tariff definition of Day-Ahead Scheduling 

Reserve Resources as “synchronized and non-synchronized generation resources and 

Demand Resources electrically located within the PJM Region that are capable of 

providing Day-ahead Scheduling Reserves.”180 Additionally, PJM explains that Energy 

Storage Resources are eligible to provide Reactive Service by section 12.0 of the existing

pro forma Interconnection Service Agreement in Tariff, Attachment O, which requires 

that resources interconnecting to the PJM system have the ability to maintain specific 

leading and lagging power factors.181

Regarding their eligibility to provide Non-Synchronized Reserve, PJM clarifies 

that a practical outcome of its Storage Participation Model is that it is technically 

infeasible for an Energy Storage Resource to provide Non-Synchronized Reserves.182 

However, Storage Model Participants can provide Synchronized Reserves to contribute

to PJM’s Synchronized Reserve Requirement or Primary Reserve Requirement, so 

PJM asserts that there is no barrier for Energy Storage Resources to provide and be 

compensated for contributing towards all PJM reserve requirements comparable to other 

resources.183

PJM explains that an Energy Storage Resource that is “out of charge” would not 

be considered an outage for purposes of EFOR-d calculations because the fact that it is 

“out of charge” does not mean that it is unavailable for providing a service to PJM, 

nor does it mean that it has malfunctioned or otherwise been taken out of service.184 

Additionally, PJM states that an Energy Storage Resource that is “out of charge” would 

not fall under the category of a Generator Forced Outage because it would not constitute 

“an Emergency or threatened Emergency, unanticipated failure, or other cause beyond 

the control of the owner or operator.”185 Likewise, PJM asserts that an Energy Storage 

 179 Data Request Response at 8-9.

180 Id. at 7.

181 Id. at 10.

182 Id. at 6.

183 Id. at 7.

184 Id. at 13.

185 PJM’s Tariff defines Generator Forced Outage as an immediate reduction in 

output or capacity or removal from service, in whole or in part, of a generating unit by 

reason of an Emergency or threatened Emergency, unanticipated failure, or other cause 
Docket No. ER19-469-000, et al. - 37 -

Resource that is “out of charge” does not meet the other Tariff definitions related to an 

outage.

v. Comments on Data Request Response

PJM’s Market Monitor argues that PJM fails to identify the service that an Energy 

Storage Resource is available to provide if it is “out of charge.”186 PJM’s Market 

Monitor further argues that PJM did not include a more detailed definition of a forced 

outage from the Tariff.

187 PJM’s Market Monitor asserts that PJM’s interpretation of the 

outage rules would allow a battery to discharge its entire 10-hour capacity in one hour, 

and in the following hour be unavailable to follow PJM’s dispatch instruction due to lack 

of charge, and incur no impact on its EFOR-d.188 PJM’s Market Monitor explains that 

this is not consistent with PJM’s treatment of units that are unavailable due to economic 

decisions, such as a lack of fuel, an interruption due to lack of gas supply, or that do not 

have staff available to start a unit at the time of a call.

PJM’s Market Monitor states that PJM market rules currently require that 

generators submit forced outage tickets when they are not available and the outage (the 

lack of availability) is not due to a Generator Maintenance Outage or a Generator Planned 

Outage.189 PJM’s Market Monitor further states that outages caused by lack of fuel, 

whether they are outside management control or not, are included in the calculation of 

 

beyond the control of the owner or operator of the facility, as specified in the relevant 

portions of PJM’s Manuals. A reduction in output or removal from service of a 

generating unit in response to changes in market conditions shall not constitute a 

Generator Forced Outage. Id. at 13-14 (citing Tariff, § 1, Definitions – G-H).

186 PJM’s Market Monitor Comments on Data Request Response at 2. 

187 A Generation Capacity Resource committed to PJM loads through an RPM 

Auction, FRR Capacity Plan, or by designation as a replacement resource under 

Attachment DD of PJM’s Tariff, that does not deliver all or part of its scheduled energy 

shall be deemed to have experienced a Generator Forced Outage with respect to such 

undelivered energy, in accordance with standards and procedures for full and partial 

Generator Forced Outages specified in the Reliability Assurance Agreement (RAA), and 

PJM’s Manuals. Id. (citing PJM Tariff, § 1.9.4).

188 Id. at 2.

189 Id. at 2-3.
Docket No. ER19-469-000, et al. - 38 -

EFOR-d.190 PJM’s Market Monitor points to PJM’s Manual 18, which states that 

“Effective with the 2018/2019 Delivery Year, the EFOR-d based on forced outage data 

from an October through September period prior to the Delivery Year will be based on all 

forced outage data and not exclude forced outage data for Outside Management Control 

events.”191 PJM’s Market Monitor concludes that when an Energy Storage Resource is 

“out of charge” due to the resource owner’s operating decisions, it should be considered 

on an outage if it is unavailable for PJM dispatch.

vi. Commission Determination

We find that PJM’s proposed tariff revisions comply with the requirements of 

Order No. 841 because PJM ensures that Energy Storage Resources are eligible to 

provide all capacity, energy, and ancillary services that they are technically capable of 

providing. 

We disagree with commenters’ arguments that an Energy Storage Resource should 

be considered on an outage when it is “out of charge,” for the purposes of calculating that 

resource’s EFOR-d. We agree with PJM that an Energy Storage Resource that is “out of 

charge” would not fall under the category of a Generator Forced Outage because it would 

not constitute “an Emergency or threatened Emergency, unanticipated failure, or other 

cause beyond the control of the owner or operator.”192 Additionally, we agree with PJM 

that its proposal is also consistent with how PJM currently treats pumped-hydro 

resources. Therefore, we find that PJM’s proposal not to consider an Energy Storage 

Resource that is “out of charge” as an outage for purposes of EFOR-d does not conflict

with Order No. 841, and PJM appropriately explains how it intends to apply its existing 

market rules to Energy Storage Resources for the purposes of EFOR-d calculations. 

We also accept PJM’s proposal to apply its existing Capacity Performance rules 

to Energy Storage Resources. We reiterate our finding in Order No. 841 that Energy 

Storage Resources must still meet all of the technical, operational, and/or performance 

requirements that are necessary to reliably provide a service. Order No. 841 does not 

exempt an Energy Storage Resource that is participating in RTO/ISO capacity markets 

from any applicable penalties for non-performance.193 We find that PJM has 

 190 Id. at 3.

191 Id.

192 See Data Request Response at 13-14 (citing Tariff, § 1, Definitions – G-H).

193 Order No. 841, 162 FERC ¶ 61,127 at PP 78, 95.
Docket No. ER19-469-000, et al. - 39 -

appropriately clarified how it will apply its existing Capacity Performance penalties to 

Energy Storage Resources, as required by Order No. 841.

In response to Tesla’s comment that the current PJM rules do not allow a behindthe-meter Energy Storage Resource to inject energy onto the grid during the provision of 

Frequency Regulation Service, we note that PJM clarifies in its answer that Energy 

Storage Resources that are co-located with load and share a single grid connection may 

provide Frequency Regulation between load reduction and injection, provided that they 

have an Interconnection Service Agreement or a Wholesale Market Participation 

Agreement.

b. Ability to De-Rate Capacity to Meet Minimum Run-Time 

Requirements

To implement section 35.28(g)(9)(i)(A) of the Commission’s regulations, Order 

No. 841 requires that each RTO/ISO have tariff provisions providing that resources using 

the participation model for electric storage resources can de-rate their capacity to meet 

minimum run-time requirements.194 Electric storage resources that participate in an 

RTO/ISO capacity market are not exempt from meeting the performance metrics and 

criteria that apply to all other resources that participate in that market and are not exempt 

from any applicable penalties for non-performance.195 

Order No. 841 states that an electric storage resource de-rating its capacity to 

provide capacity or other services is not engaging in physical withholding if it is de-rating 

to meet minimum run-time requirements. However, each RTO/ISO may request that its 

market monitor verify whether an electric storage resource de-rated its capacity to meet a 

minimum run-time requirement to ensure that such resource is not engaging in physical 

withholding, as defined by the Commission.196 Additionally, to the extent that market 

power concerns arise as a result of electric storage resources de-rating capacity to provide 

capacity or other services, each RTO/ISO may consider whether it is appropriate to 

update and/or apply existing market power mitigation processes to electric storage 

resources to alleviate market power concerns.197 Further, electric storage resources may 

 194 Id. P 94.

195 Id. P 95.

196 Id. P 96.

197 Id. P 97.
Docket No. ER19-469-000, et al. - 40 -

provide services in RTO/ISO markets without de-rating so long as they meet the 

requirements to provide the particular service that they seek to provide.198

Order No. 841 provides each RTO/ISO with flexibility to either use its existing 

rules for must-offer quantities or to modify its existing rules as necessary to reflect the 

physical and operational characteristics of electric storage resources.199 However, if an 

electric storage resource elects to de-rate its capacity, it must not de-rate its capacity 

below any capacity obligations that it has assumed, such as any applicable must-offer 

requirement. Also, the de-rated quantity should be based on the quantity of energy that 

an electric storage resource can discharge continuously over the minimum run-time set by 

the RTO/ISO.

Order No. 841 does not require RTOs/ISOs to make specific changes to minimum 

run-time or must-offer requirements associated with providing capacity.

200 However, 

each RTO/ISO must demonstrate on compliance that its market rules provide a means for 

electric storage resources to provide capacity, including how its capacity market rules are 

applicable to resources using the participation model.

201 Where an RTO/ISO does not 

have existing tariff provisions that enable electric storage resources to provide capacity, 

the RTO/ISO must propose such rules.202

i. Filing

PJM states that while there has been notable development of flywheel and battery 

storage in the PJM region in the last few years, those currently operating are short 

duration resources, and no such facilities have yet offered into the RPM on a stand-alone 

basis.

203 As such, PJM states that there is currently no stand-alone battery storage 

participation in PJM’s capacity market. However, PJM states there has been substantial 

 198 Id. P 98.

199 Id. P 99.

200 Id. P 100.

201 Id. PP 100, 101.

202 Id. P 100.

203 Compliance Filing, Transmittal at 18-19.
Docket No. ER19-469-000, et al. - 41 -

(currently about 5,000 MW) Energy Storage Resource participation in the capacity 

market in the form of pumped-hydro resources.204 

PJM also clarifies its requirements regarding the Installed Capacity (ICAP) MW 

value of Capacity Storage Resources to ensure they are treated in a manner comparable 

with other resources with similar operational characteristics.205 PJM explains that it 

currently determines the capacity value (in installed capacity MW) of Capacity Storage 

Resources, under which PJM includes all types of Energy Storage Resources, based on 

their discharge/output capability over 10 hours of sustained continuous operation.206 

PJM states that setting an Energy Storage Resource’s capacity value based on the level of 

continuous output that can be sustained for 10 hours ensures that PJM dispatchers can 

call upon such resources to manage loads in a typical summer peak day in a manner 

comparable to any other dispatchable resource.207 PJM states that the Storage 

Participation Model retains the existing 10-hour minimum run-time requirement.208 PJM 

elaborates that, as Order No. 841 requires, it has long used the approach of allowing 

resources to de-rate their capacity to meet output duration requirements.209 Further, PJM 

states that this approach is how PJM determines the maximum capacity value of battery 

storage projects currently seeking interconnection, with Capacity Interconnection Rights, 

under PJM’s interconnection rules. Thus, PJM proposes no changes to its governing 

documents related to this requirement.

PJM references the affidavit by Mr. Bastian and explains that he shows that under 

a typical PJM region summer weekday load shape, PJM loads are at or above 90 percent 

of the daily peak for a period of approximately 10 hours.210 Mr. Bastian further explains 

that PJM relies on the ability of capacity resources to maintain output at their stated 

capability levels during such periods to manage the system’s ability to meet those loads 

throughout the afternoon and evening. PJM concludes that the capacity value of a 

Capacity Storage Resource is reasonably based on the output level it can be expected to 

 204 Id. at 19.

205 Id.

206 Id. at 20.

207 Id. at 20-21.

208 Id. at 21.

209 Id. at 20.

210 Id. at 22.
Docket No. ER19-469-000, et al. - 42 -

provide on a continuous basis because they are capable of sustained, continuous output 

and can be dispatched, unlike intermittent resources.211

ii. Protests/Comments

Exelon supports PJM’s 10-hour minimum run-time requirement. Exelon agrees 

with PJM that requiring 10 hours of sustained continuous operation for Energy Storage 

Resources providing capacity is reasonable and appropriate for the PJM footprint.212 

Exelon states that 10 hours of sustained continuous operation is currently a Tariff 

requirement for other dispatchable resources and was adopted based on PJM’s needs. 

Exelon further states that PJM should not be forced to change its current Tariff and rules 

to develop a participation model specific to Energy Storage Resources, and Order 

No. 841 does not require RTOs/ISOs do so.213 Exelon further states that there are 

regional differences between and among the various RTOs/ISOs, which must be 

recognized and respected.214

Multiple commenters request that the Commission reject PJM’s proposed 10-hour 

minimum run-time requirement.215 They generally argue that this requirement creates a 

barrier for Energy Storage Resources to participate in PJM’s capacity market, and 

therefore, is unjust and unreasonable.216 EDF and Clean Energy Entities elaborate that

PJM creates a financial barrier for battery storage to compete and will lead to 

unjustifiably low capacity values for Energy Storage Resources or result in hours of 

unnecessary capacity that will go unused by customers.217 Joint Consumer Advocates 

 211 Id. at 27.

212 Exelon Comments at 2.

213 Id. at 3.

214 Id. at 4.

215 Advanced Energy Economy Comments at 12; Clean Energy Entities Comments 

at 3; EDF Comments at 5; Energy Storage Association Protest at 10; Joint Consumer 

Advocates Comments at 7, 8-9; Public Interest Organizations Comments at 8; SEIA 

Comments at 5-6.

216 Advanced Energy Economy Comments at 12; Clean Energy Entities Comments 

at 2; EDF Comments at 2; Energy Storage Association Comments at 8-9; Joint Consumer 

Advocates Comments at 13-14; Public Interest Organizations Comments at 4, 10-11.

217 EDF Comments at 2; Clean Energy Entities Comments at 2.
Docket No. ER19-469-000, et al. - 43 -

claim that PJM’s proposal would also result in higher costs for ratepayers.218 Advanced 

Energy Economy elaborates that PJM’s proposal would inhibit competition and cause 

unjust and unreasonable rates.219

Multiple commenters contend that, although PJM currently uses a 10-hour 

minimum run-time requirement for pumped-hydro resources, Order No. 841 requires 

RTOs/ISOs to develop a participation model that provides a realistic opportunity for 

battery and other storage types to participate in wholesale electricity markets at just and 

reasonable rates that reflect the true value such resources provide.220 Energy Storage 

Association argues that PJM’s proposal creates arbitrary and undue burdens to nonpumped-hydro Energy Storage Resource participation in PJM’s capacity market.221 

Clean Energy Entities and Joint Consumer Advocates claim that PJM has not explained 

why the 10-hour minimum run-time requirement is necessary for non-hydro Energy 

Storage Resources.222 Public Interest Organizations further contend it is unclear how the 

10-hour minimum run-time requirement has been applied to pumped-hydro resources 

based on the available data.223 

Multiple commenters note that PJM does not use its 10-hour minimum run-time 

requirement for all resources. NextEra contends that, while it is true that the 10-hour 

minimum run-time requirement has been historically used for all dispatchable resources 

in PJM, PJM has a different procedure for calculating the minimum run-time requirement 

 218 Joint Consumer Advocates Comments at 13.

219 Advanced Energy Economy Comments at 12.

220 Id. at 10-11; EDF Comments at 3-4 (citing Order No. 841, 162 FERC ¶ 61,127

at P 55); Energy Storage Association Comments at 1; Joint Consumer Advocates 

Comments at 7; Public Interest Organizations Comments at 10-11.

221 Energy Storage Association Comments at 1. 

222 Clean Energy Entities Comments at 5.

223 Public Interest Organizations Comments at 11-12. Public Interest Organizations 

point to data from Bath County Pumped-Hydro Station that implies the station can 

maintain full output for just under eight hours, Yards Creek Pumped-Hydro Station that 

implies the station can maintain its full capacity output for between seven and eight hours, 

and Seneca Pumped-Hydro Station that states the station would support output at the full 

capacity value for slightly more than eight hours. Id. at 12-13.
Docket No. ER19-469-000, et al. - 44 -

for intermittent solar and wind resources.224 NextEra notes that capacity interconnection 

rights and Unforced Capacity values for intermittent resources are measured over only 

four hours. NextEra therefore contends that the use of a 10-hour minimum run-time

requirement discriminates against Capacity Storage Resources compared to intermittent 

resources.225 NextEra argues that Energy Storage Resources have the technical capability 

to reliably provide capacity at rates substantially greater than intermittent resources.226 

NextEra provides an example that shows PJM’s methodology would restrict a Capacity 

Storage Resource to 20 MW even though it can, on average, provide approximately two 

to five times that much capacity during the identified Performance Hours – 40 MW in 

summer and 100 MW in the winter.227

Several commenters point out that no other RTO/ISO proposes as long of a 

minimum run-time requirement.228 Clean Energy Entities point to the four-hour 

minimum run-time requirements proposed by NYISO, MISO, and CAISO as well as the 

two-hour minimum run-time requirement proposed by ISO-NE.229 Advanced Energy 

Economy points to ISO-NE’s and NYISO’s compliance proposals, stating that these 

proposals better reflect both the unique physical and operational characteristics of Energy 

Storage Resources and their technical capabilities to provide energy and ancillary 

services during critical peak periods. Tesla states that PJM has not provided any 

rationale as to why system needs in its territory would differ so greatly from other regions 

as to require such a significant increase in required minimum run time.230 Some

commenters contend that PJM’s proposed minimum run-time requirement would not 

properly account for the capacity of hybrid resources, and thus, would lead to unjust and 

unreasonable market outcomes.231 Union of Concerned Scientists argues that a hybrid 

 224 NextEra Comments at 2, 4.

225 Id. at 2.

226 Id. at 11. 

227 Id. at 10. 

228 Clean Energy Entities Comments at 6-7; Advanced Energy Economy 

Comments at 11; Energy Storage Association Comments at 9-10; EDF Comments at 2-3.

229 Clean Energy Entities Comments at 7.

230 Tesla Comments at 14.

231 Clean Energy Entities Comments at 3-4; Union of Concerned Scientists 

Comments at 12; Energy Storage Association Comments at 8.
Docket No. ER19-469-000, et al. - 45 -

resource will seek to avoid designation as an Energy Storage Resource if it carries with 

it the obligation to pass the 10-hour minimum run-time requirement.

232 NextEra argues 

that PJM’s singular focus on dispatchability is irrational within the context of hybrid 

resources.

233 NextEra explains that if a hybrid resource – e.g., a project with a four-hour 

battery storage resource co-located with a solar resource – was measured according to 

PJM Manual 21, its Capacity Interconnection Rights would be significantly lower than 

those assigned to a solar resource with identical nameplate capacity because PJM 

Manual 21 measures the capacity value of dispatchable resources over a 10-hour period 

but measures the capacity value of intermittent resources over a four-hour period.

234 

Several commenters argue that PJM’s 10-hour minimum run-time requirement is

not based on a sound consideration of physical and operational characteristics of Energy 

Storage Resources.

235 Public Interest Organizations explain that duration is not a 

significant concern for a vast majority of traditional generators and, because a 10-hour 

minimum run-time requirement does not impose significant costs on them or reduce their 

capacity value, there was never a need to consider how to best make use of resources 

with shorter durations.236 Joint Consumer Advocates explain that the unique “energylimited nature” of Energy Storage Resources, which limits them to “only discharg[ing] as 

much energy as has previously been charged,” separates them from traditional resources

and thus PJM’s capacity market rules should account for their “energy-limited nature.”237 

Commenters also take issue with the results of the studies PJM uses to support its 

10-hour minimum run-time requirement.

238 Clean Energy Entities take issue with PJM’s 

assumption that non-hydro Energy Storage Resources will account for 8.5 percent of 

peak load in the capacity market, and PJM’s use of the 2018 Limited Energy Capability 

Resources report, which they state is not publicly available and does not analyze the 

 232 Union of Concerned Scientists Comments at 15-16.

233 NextEra Comments at 6. 

234 Id. at 4-7. 

235 Public Interest Organizations Comments at 10, 15; Joint Consumer Advocates 

Comments at 7; Advanced Energy Economy Comments at 12. 

236 Public Interest Organizations Comments at 11.

237 Joint Consumer Advocates Comments at 5-6.

238 Advanced Energy Economy Comments at 11; Public Interest Organizations 

Comments at 11-12, 14-15; Joint Consumer Advocates Comments at 8, 21-22.
Docket No. ER19-469-000, et al. - 46 -

minimum run-time requirement.239 Advanced Energy Economy, Clean Energy Entities,

and Public Interest Organizations argue that the 2010 demand response study cited by 

PJM is out-of-date and does not provide persuasive evidence.240 Tesla points to more 

recent studies by the National Renewable Energy Laboratory and ICF International, Inc. 

that find that a four-hour minimum run-time requirement is sufficient.

241 Public Interest 

Organizations argue that the results of the 2010 demand response study hinge on specific 

operational limitations of demand response that do not apply to Energy Storage 

Resources.

242 In contrast to demand response, Public Interest Organizations argue that an 

Energy Storage Resource is a nearly perfectly dispatchable resource and can be 

dispatched second-to-second to precisely fill in gaps between load and energy produced 

by other resources.243 Tesla argues that, in order to ensure just and reasonable rates, any 

minimum run-time requirement above four hours for electric storage resources should be 

based upon appropriate studies of the ability of such resources to serve the specific 

system’s forecasted load that demonstrate a specific duration is required to meet those 

system needs.244 Specifically, Tesla recommends that RTOs/ISOs: (1) calculate the 

effective load carrying capability of electric storage resources with various run times at 

the forecasted level of system load, (2) establish the maximum quantity in MW of electric 

storage resources of a specific run time that can provide capacity service to the system 

based on forecasted load, and (3) limit performance penalties to the physical energy 

capacity in MW hours (MWh) committed to the capacity market by the electric storage 

resource.

245

 239 Clean Energy Entities Comments at 9-10.

240 Advanced Energy Economy Comments at 11; Clean Energy Entities Comments 

at 9; Public Interest Organizations Comments at 13-15.

241 Tesla Comments at 13 (citing P. Denholm and R. Margolis, The Potential for 

Energy Storage to Provide Peaking Capacity in California under Increased Penetration 

of Solar Photovoltaics (Mar. 2018), https://www.nrel.gov/docs/fy18osti/70905.pdf, and 

H. Johal et al., Unlocking the Hidden (Capacity) Value in Energy Storage (Nov. 2016), 

https://www.icf.com/resources/white-papers/2016/unlocking-the-hidden-capacity-valuein-energy-storage).

242 Public Interest Organizations Comments at 11-12.

243 Id. at 15.

244 Tesla Comments at 8.

245 Id. at 8-12.
Docket No. ER19-469-000, et al. - 47 -

Public Interest Organizations further state that setting electric storage resource

requirements based on the duration of peak periods is equivalent to valuing an electric 

storage resource as if it were a non-dispatchable, block-loaded resource similar to 

demand response.246 Joint Consumer Advocates also argue that PJM errs in proposing to 

base the Energy Storage Resource capacity rating on a typical peak summer weekday, 

rather than basing measurement on peak load conditions.247 They explain that Energy 

Storage Resources have not penetrated PJM’s markets enough that they would be called 

upon to ensure resource adequacy on a typical summer day and are not expected to reach 

such levels in the near future, but they can provide significant capacity value on peak 

days.248 EDF further argues that establishing an Energy Storage Resource’s capacity 

value based on sustained performance for at least 10 hours goes beyond the capacity 

market’s purpose of covering peak demand during emergency conditions.249 

Several commenters argue that PJM’s proposal contradicts language in its own 

Tariff and manuals.250 Energy Storage Association notes that PJM defines “Peak Hours” 

in several other locations in its manuals and that those other definitions do not exceed 

four consecutive hours, in contrast with PJM’s 10-hour minimum run-time proposal.251 

Clean Energy Entities also state that PJM did not define “peak-hour period” for Energy 

Storage Resources, but the most logical interpretation of PJM’s Tariff is that it is

four hours.252 Clean Energy Entities and Public Interest Organizations argue PJM would 

have to file an FPA section 205 filing to establish a prospective 10-hour minimum runtime requirement.253 Public Interest Organizations and Energy Storage Association state 

that the Commission previously approved a less restrictive standard for determining the 

 246 Public Interest Organizations Comments at 15. 

247 Joint Consumer Advocates Comments at 8, 21-22.

248 Id. at 8.

249 EDF Comments at 4 (citing PJM Interconnection, LLC, 155 FERC ¶ 61,157, at 

P 112 (2016) (“[t]he purpose of the capacity market is to ensure PJM has adequate 

resources during an emergency”)).

250 Union of Concerned Scientist Comments at 17; Public Interest Organizations 

at 6-7; NextEra Comments at 7-8, 10; GlidePath Comments at 3.

251 Energy Storage Association Comments at 6 (citing Bastian Affidavit). 

252 Clean Energy Entities Comment at 20.

253 Id. at 6; Public Interest Organizations Comments at 7.
Docket No. ER19-469-000, et al. - 48 -

capacity value of a Capacity Storage Resource in the Capacity Performance 

proceeding.

254 NextEra asserts that section 5.6.1(h) of Attachment DD – which sets the 

rules by which seasonal capacity resources may aggregate sell offers in a capacity market 

auction – defines peak-hour periods differently than PJM’s Manual 21.255 Energy 

Storage Association explains that PJM’s Tariff states that Capacity Storage Resources

may offer to sell capacity in a quantity consistent with their average expected output 

during peak periods.256 

Public Interest Organizations assert that PJM’s citation to RAA, Schedule 9 and 

the associated Manual 21 is inapposite as Schedule 9 governs Generation Capacity 

Resources, which electric storage resources are not.257 GlidePath does not object to 

PJM’s proposed tariff revisions, but argues that, despite PJM’s claim that its 10-hour 

minimum run-time requirement is a longstanding requirement, this requirement is not in 

the Tariff and PJM does not propose to incorporate this requirement into its Tariff as part 

of its compliance filing.258 GlidePath concludes that the Commission should either 

clarify that the Tariff is inconsistent with PJM’s description of the 10-hour minimum runtime requirement for Energy Storage Resources, or state that the Commission makes no 

determination with respect to PJM’s position on the minimum run-time requirement for 

Energy Storage Resources.259 

A number of comments offer alternative proposals, the most common of which is 

that the Commission should instruct PJM to use a four-hour minimum run-time 

 254 Public Interest Organizations Comments at 4-5; Energy Storage Association 

Comments at 5.

255 NextEra Comments at 7-8 (Attachment DD defines peak-hour periods as “the 

hour ending 1500 local prevailing time through the hour ending 1900 local prevailing 

time on any day during the calendar months of June through August... and the hour 

ending 800 local prevailing time through the hour ending 900 local prevailing time and 

the hour ending 1900 local prevailing time through the hour ending 2000 local prevailing 

time on any day during the calendar months of January and February”). 

256 Energy Storage Association Comments at 3 (citing PJM Tariff, Attachment DD, 

§ 5.6.1(h)).

257 Public Interest Organizations Comments at 6-7.

258 GlidePath Comments at 4.

259 Id. at 5.
Docket No. ER19-469-000, et al. - 49 -

requirement.260 Alternatively, Clean Energy Entities request that the Commission instruct 

PJM to use a four-hour minimum run-time requirement for non-hydro Energy Storage 

Resources on an interim basis, so non-hydro Energy Storage Resources may offer capacity 

in the August 2019 Base Residual Auction.261 Public Interest Organizations request that 

the Commission direct PJM to fulfill its 2015 commitment to incorporate a calculation for 

the capacity value of Capacity Storage Resources based on output during peak hour 

periods in its manuals.262 Joint Consumer Advocates propose that PJM could define a 

lower minimum run-time requirement and review the requirement when Energy Storage 

Resources have a higher penetration level in PJM’s market.263

In contrast, Calpine asks the Commission to consider whether Energy Storage 

Resources should be permitted to participate as capacity resources before they are 

able to fully provide the services needed by PJM to reliability operate the grid.

264 

Calpine argues that the manner in which PJM proposes to apply the 10-hour minimum 

run-time requirement to Energy Storage Resources provides preferential treatment to 

Energy Storage Resources compared to thermal resources.265 Specifically, Calpine points 

to PJM’s statement that “the capacity value of a Capacity Storage Resource is based on 

the resource’s MW output capability that can be maintained over a continuous ten-hour 

period when starting at a fully charged state with an assumed ability to return to a fully 

charged state during the fourteen-hour period remaining until the start of the next tenhour discharge period.”266 According to Calpine, permitting a Capacity Storage 

Resource to be offline for 14 hours in between the 10-hour discharge periods is 

inconsistent with the requirements of thermal generation resources participating in the 

capacity market, which are instead expected to run when, and for as long as, PJM calls on 

them to do so.267 Although Calpine recognizes that electric storage resources have 

 260 Clean Energy Entities Comments at 3; Energy Storage Association Comments 

Protest at 10; SEIA Comments at 5-6.

261 Clean Energy Entities Comments at 3.

262 Public Interest Organizations Comments at 17-18.

263 Joint Consumer Advocates Comments at 9.

264 Calpine Comments at 5.

265 Id. at 4.

266 Id. (quoting Compliance Filing, Transmittal Letter at 25) (emphasis added).

267 Id. at 5.
Docket No. ER19-469-000, et al. - 50 -

operational limitations, it argues that the reliability requirements for capacity resources 

should not be degraded in an effort to encourage a particular resource type. 

Several commenters also argue that the Commission should determine that PJM’s 

10-hour minimum run-time requirement is outside the scope of this compliance filing.268 

Public Interest Organizations argue that even if the minimum run-time requirements for 

Energy Storage Resources are in scope for the current proceeding, the lack of stakeholder 

process and insufficient record make an order on Energy Storage Resource duration 

inappropriate at this time.269 

iii. Answers

PJM argues that its proposal is consistent with the requirements of Order No. 841 

because it applies the same technical standards for determining capacity value that are 

currently applied to all other dispatchable resources.270

In response to commenters’ arguments that PJM’s proposed method to determine 

the installed capacity value of Energy Storage Resources presents a barrier to entry by 

creating an economic disincentive to their participation in the Reliability Pricing Model, 

PJM argues its proposal is a technical determination of the maximum value of Capacity 

Interconnection Rights a resource may have when it seeks to interconnect to the PJM 

grid, and that any Energy Storage Resource wishing to participate in the RPM has the 

ability to de-rate its capacity to satisfy the technical eligibility requirements.271 PJM 

asserts that, while its approach may not provide the maximum potential economic value 

to all Energy Storage Resources wishing to participate in the RPM, its proposal does 

allow all Energy Storage Resources the opportunity to participate on a nondiscriminatory basis.272

 268 Public Interest Organizations Comments at 4, 8, 17-18; NextEra Limited

Comments at 3; Energy Storage Association Comments at 9.

269 Public Interest Organizations Comments at 15.

270 PJM March 5, 2019 Answer at 9-10 (citing Clean Energy Entities Protest at 

6-7, Energy Storage Association Protest at 2-10, Advanced Energy Economy Comments 

at 12-13).

271 Id. at 12 (citing EDF Comments at 2).

272 Id. at 12-13.
Docket No. ER19-469-000, et al. - 51 -

In response to protestors’ arguments that the Commission should require PJM to 

utilize a shorter minimum run-time requirement consistent with the requirements 

proposed by other RTOs/ISOs, PJM argues that simply substituting the requirements 

from other RTOs/ISOs would constitute arbitrary and capricious action.273 PJM argues 

that the proposal from Energy Storage Association to impose a four-hour minimum runtime requirement as an interim solution has no evidentiary support for how it would meet 

PJM’s reliability requirements.274 PJM argues that protestors have not offered 

alternatives that are anchored in any analysis specific to PJM’s load shape during peak 

periods or other analyses that their alternatives would better meet the PJM system’s 

reliability needs.275

In response to protestors’ arguments that the current Tariff language specifying 

capacity sell offer parameters for Energy Storage Resources276 requires a four-hour

duration, PJM argues that its Tariff clearly specifies that a capacity sell offer cannot 

exceed a resource’s installed capacity as determined under the RAA.277 PJM argues that 

the provision protestors cite must be read in conjunction with the Tariff’s other 

provisions on sell offers, which make clear that a seller cannot offer more than its 

resource’s installed capacity, which is determined under the RAA.278 PJM states that 

RAA, Schedule 9 explicitly states that the specific rules and procedures for determining 

the capability of Generation Capacity Resources are maintained in PJM’s Manuals.279 

PJM explains that the Tariff section cited by protestors permits an Energy Storage 

Resource to base its Capacity Performance offer on its average expected output during 

 273 Id. at 13 (citing Clean Energy Entities Protest at 21, Energy Storage 

Association Protest at 9-10).

274 Id. at 13.

275 Id. at 14.

276 See PJM Tariff, Attachment DD, § 5.6.1(h) (7.0.0) (“. . . a Capacity Market 

Seller that owns or controls one or more Capacity Storage Resources . . . may submit a 

Sell Offer as a Capacity Performance Resource in a MW quantity consistent with their 

average expected output during peak-hour periods”).

277 PJM March 5, 2019 Answer at 14-16 (citing Energy Storage Association 

Protest at 3-4, Clean Energy Entities Protest at 18-19, Public Interest Organizations 

Protest at 5).

278 Id. at 16-17 (citing PJM OATT, Attachment DD, §§ 5.8(g), 5.8(f), 5.6.1(b)).

279 Id. at 15.
Docket No. ER19-469-000, et al. - 52 -

peak-hour periods, so long as the offer does not exceed the installed capacity determined 

for that resource in accordance with the RAA.280 Thus, PJM argues, its proposed method 

for establishing an Energy Storage Resource’s installed capacity value is consistent with 

its Tariff, and accurately reflects PJM’s longstanding requirements.281

PJM contends that protestors’ criticisms of the analysis supporting its proposed 

method for determining the installed capacity value of Energy Storage Resources is 

misplaced.282 In response to arguments by Clean Energy Entities’ affiant Dr. Emma L. 

Nicholson and Energy Storage Association’s affiant Mr. Kevin Carden that PJM should 

establish its minimum run-time requirements for Energy Storage Resources based on 

their penetration in the capacity market, PJM contends that adopting a maximum quantity 

limit or sliding-scale limit for short-duration storage to accommodate that resource would 

be unduly discriminatory and contrary to PJM’s resource-agnostic evaluation of capacity 

resources.283 PJM further argues that Dr. Nicholson and Mr. Carden err in their efforts 

to diminish the significance of PJM’s 2010 study that found that Limited Demand 

Resources had to commit to interrupt for at least 10 hours per call, even if they were 

subject to an aggregate resource-class limit of 8.5 percent of load.284 PJM clarifies that it 

did not base its proposal for valuing the installed capacity of Energy Storage Resources

on the Limited Demand Resources analysis, but that the Limited Demand Resources 

analysis nonetheless supports its proposal.285 PJM argues that the alleged differences 

between Limited Demand Resources and Energy Storage Resources that Dr. Nicholson 

and Mr. Carden cite provide no basis for affording Energy Storage Resources a much 

shorter minimum run-time requirement. PJM disputes Dr. Nicholson’s assertion that the 

2010 Limited Demand Resources analysis is based on inputs that are out-of-date, and 

argues that typical summer load shapes have not changed greatly since the study was 

conducted.286 Finally, PJM disagrees with Dr. Nicholson and Mr. Carden’s argument 

that there is not likely to be sufficient penetration of storage to cause a reliability 

 280 Id. at 17.

281 Id. at 17-18.

282 Id. at 18.

283 Id. at 18-19 (citing Nicholson Affidavit at 3, Carden Affidavit at P 8).

284 Id. at 19.

285 Id. at 20.

286 Id. at 21 (citing Nicholson Affidavit at 9).
Docket No. ER19-469-000, et al. - 53 -

problem.287 PJM argues that if the system need on the peak day in question required 

capacity for a longer duration than the Energy Storage Resource could provide, PJM 

would have to find another resource to fill the gap in system need, and this shortcoming 

is incompatible with the fundamental obligations of a Capacity Resource.288 

Energy Storage Association responds that Order No. 841 was never intended to be 

a vehicle for PJM to implement new tariff barriers to the participation of Capacity 

Storage Resources in PJM’s market.289 Energy Storage Association contends that 

Manual 21 is ambiguous on how Capacity Storage Resources will be treated, and that 

PJM chooses to assert an interpretation of Manual 21 that would unilaterally develop 

rules that supersede a Commission-approved tariff.290 Energy Storage Association 

explains that at the time the Capacity Storage Resource asset type was first established in 

PJM’s Capacity Performance Filing,291 Capacity Storage Resources were repeatedly and 

exclusively discussed as part of a set of non-traditional resources.292 Energy Storage 

Association states that a separate and explicit approach to installed capacity 

determination for Capacity Storage Resources was not in place at the time the 

Commission accepted the Capacity Performance Filing, and thus the Tariff language the 

Commission accepted in that filing expressly provides that capacity market participation 

would be based on a Capacity Storage Resource’s average output during peak hours.293 

In response to PJM’s argument that it can apply RAA, Schedule 9 to Capacity Storage 

Resources, Energy Storage Association contends that PJM’s Capacity Performance Filing 

intentionally and repeatedly distinguishes Generation Capacity Resources from Capacity 

Storage Resources, indicating PJM’s and the Commission’s understanding that Capacity 

Storage Resources would be treated differently from the Generation Capacity Resources 

 287 Id. at 22-23 (citing Nicholson Affidavit at 10, Carden Affidavit at P 8).

288 Id. at 24.

289 Energy Storage Association Answer at 3.

290 Id. at 3-4.

291 See PJM Interconnection, L.L.C., Filing, Docket No. ER15-623-000 (filed 

December 12, 2014) (Capacity Performance Filing).

292 Energy Storage Association Answer at 4 (citing PJM Interconnection, L.L.C., 

Answer, Docket No. ER15-623-000, at 20 (filed February 13, 2015)).

293 Id. at 4-5 (citing PJM Interconnection, L.L.C., 151 FERC ¶ 61,208, at P 100 

(2015)).
Docket No. ER19-469-000, et al. - 54 -

discussed in RAA, Schedule 9.294 Thus, Energy Storage Association argues, while PJM 

contends that Capacity Storage Resources are dispatchable and therefore akin to 

Generation Capacity Resources, in numerous tariff provisions PJM clearly distinguishes 

the treatment of Capacity Storage Resources from Generation Capacity Storage, and it is 

immaterial that Capacity Storage Resources and generators are both dispatchable given 

the plain, unambiguous language in the tariff.295 

Energy Storage Association argues that PJM’s reliance on Manual 21 not only 

conflicts with the express intent of the Capacity Performance Filing, but also violates the 

Commission’s rule of reason.296 Energy Storage Association explains that provisions that 

significantly affect rates, terms, and conditions of service must be included in the tariff, 

and argues that PJM’s proposed 10-hour minimum run-time requirement for Capacity 

Storage Resources affects rates, terms, and conditions of capacity market service, and 

thus the Commission cannot rely on Manual 21 to justify PJM’s proposal.297

Energy Storage Association contends that publicly-available data disputes PJM’s 

claim that its 10-hour minimum run-time requirement already applies to pumped-hydro 

resources.298 Moreover, Energy Storage Association asserts that it is uncertain how long 

the claimed status-quo 10-hour duration requirement has been in effect.299 Energy 

Storage Association explains that, as recently as 2013, Manual 21 referred to a 12-hour 

minimum run-time requirement, and that discussion of this history is notably absent from 

PJM’s justification for the 10-hour minimum run-time requirement.

Further, Energy Storage Association argues that, to the extent that Capacity 

Storage Resources can provide full capacity value at less than 10-hours duration under 

significant penetrations in the market, PJM’s proposed 10-hour minimum run-time 

requirement violates Order No. 841’s directive that storage be allowed to provide all 

services for which it is technically capable. Energy Storage Association explains that it 

commissioned a reliability analysis that demonstrates that an incremental addition of 

4,000 MW of four-hour storage and an incremental addition of over 10,000 MW 

 294 Id. at 5-6 (citing PJM Tariff, Attachment DD § 5.5A, 5.6.1).

295 Id. at 6.

296 Id. at 7-8.

297 Id. at 8-9.

298 Id. at 9 (citing Public Interest Organizations Comments at 12-15).

299 Id. at 10.
Docket No. ER19-469-000, et al. - 55 -

of 6-hour storage would provide capacity value on par with Generation Capacity 

Resources.300 Energy Storage Association explains that this finding is consistent with the 

IEEE Study cited by PJM in its answer.301 Energy Storage Association explains that 

10,000 MW represents over 40 percent of all storage resources (e.g., pumped-hydro and 

battery storage) installed on the U.S. electric grid today, and argues this level of 

deployment is unlikely to be achieved in PJM’s footprint for many years to come.302

PJM’s Market Monitor argues that, in order for the capacity market to function on 

a resource agnostic basis, every MW of capacity offered must be a substitute for every 

other MW, so that a capacity MW from a steam plant is a substitute for a battery or any 

other resource.303 Thus, PJM’s Market Monitor contends, despite Energy Storage 

Association’s and Joint Consumer Advocates’ argument that the energy-limited nature of 

Energy Storage Resources would not cause a problem until sometime in the future, 

problems would commence immediately in the form of suppressed capacity market prices 

and displaced resources with greater capabilities. Further, PJM’s Market Monitor argues 

that the assertion that other RTO/ISO markets are using a four-hour minimum run-time 

requirement as the basis for capacity MW determinations does not justify using a fourhour minimum run-time requirement in PJM, and is not an indication that a four-hour 

minimum run-time requirement would be consistent with Order No. 841’s requirements 

in PJM.304 PJM’s Market Monitor states there is no basis for the assertion by Energy 

Storage Association and Joint Consumer Advocates that any problems introduced by 

significant market penetration by Energy Storage Resources with a lesser minimum runtime requirement could be mitigated through exposure to Capacity Performance market 

penalties.305

 300 Id. at 12 (citing Carden Affidavit at 16).

301 Id. at 12 (citing PJM March 5, 2019 Answer at n.72; Aramazd Muzhikyan, 

Laura Walter, Scott Benner, and Anthony Giacomoni, Limited Energy Capability 

Resource Duration Requirement for Participation in PJM Capacity Market (2019), 

available at https://www.pjm.com/-/media/library/reportsnotices/specialreports/2019/esr-duration.ashx?la=en (IEEE Study)).

302 Id. at 12-13.

303 PJM’s Market Monitor Answer at 5.

304 Id. at 6-7.

305 Id. at 7 (citing Energy Storage Association Comments at 7; Joint Consumer 

Advocates Comments at 8).
Docket No. ER19-469-000, et al. - 56 -

PJM’s Market Monitor contends that Energy Storage Association and Joint 

Consumer Advocates confuse economic barriers to Energy Storage Resource

participation with technical barriers.306 PJM’s Market Monitor argues that Order No. 841 

does not require PJM to provide a market participation model that will make Energy 

Storage Resources economic in PJM’s market, regardless of merit or technical 

capability.

307

PJM states that the Commission should reject Energy Storage Association’s 

proposal for PJM to modify its current capacity construct to establish a new category

of “energy-limited resources” that would only have to provide energy for four or six 

hours.308 PJM asserts that Energy Storage Association’s proposal runs counter to the 

Commission’s finding that PJM’s Capacity Performance rules are “appropriate, because 

[they] create[ ] the same expectations for all Capacity Performance Resources (i.e., the 

expectation that such resources will be available to provide energy and reserves when 

called upon), without regard to technology type.”309 PJM further states that in the 

Capacity Performance Order, the Commission found reasonable PJM’s phased 

elimination of a Demand Resource product that, among its other limitations, had to be 

“available to PJM . . . for a maximum of 6 hours a day;” and that, like Energy Storage 

Association’s present proposal, was subject to a maximum market penetration limit.310 

PJM explains that Energy Storage Association now proposes—contrary to the Capacity 

Performance Order—to reinstate a category of resources that would only have to provide 

capacity at their committed level for no more than six hours, even while Energy Storage 

Association acknowledges that such resources degrade reliability if they are committed at 

too high a level.311

 306 Id. at 7.

307 Id. at 7-8 (citing Energy Storage Association Comments at 4; Joint Consumer 

Advocates Comments at 2).

308 PJM May 14, 2019 Answer at 2.

309 Id. (citing Capacity Performance Order, 151 FERC ¶ 61,208 at P 99), order on 

reh’g, 155 FERC ¶ 61,157).

310 Id. at 3 (citing PJM Interconnection, L.L.C., 143 FERC ¶ 61,076, at P 59

(2013)), Id. at 6.

311 Id. at 3.
Docket No. ER19-469-000, et al. - 57 -

Additionally, PJM states that Capacity Storage Resources are also subject to 

certain differing rules as expressly noted in PJM’s governing documents.312 PJM states 

that Capacity Storage Resources are also subject to differing rules on Sell Offers, but the 

Sell Offer rules do not substitute for, or displace, the installed capacity rules that are 

intended under the RAA to apply to every resource capable of injecting energy onto the 

grid.313 Moreover, PJM explains that nothing in the instant filing or Manual 21 conflicts 

with the Tariff’s Sell Offer rules.314 PJM elaborates that under Tariff, Attachment DD, 

Section 5.6.1(h), Capacity Storage Resources are permitted to base Capacity Performance 

offers on their average expected output during peak-hour periods, provided, however, as 

explicitly prescribed by Tariff, Attachment DD, Section 5.8(g), PJM “shall accept a Sell 

Offer only up to the [MW] amount of installed capacity of Capacity Resources owned or 

controlled by such Capacity Market Seller that has not previously been committed for the 

applicable Delivery Year.”315 

PJM avers that including the technical details of installed capacity determination 

for Capacity Storage Resources in Manual 21 does not violate the Commission’s “rule of 

reason” and states that as Energy Storage Association itself notes, none of the rules 

detailing installed capacity determination for any resource are found in the Tariff.316 

PJM states that Energy Storage Association is incorrect to suggest that the installed 

capacity of pumped-hydro resources is not based on the output level the resource can 

provide over 

10 hours.

317 PJM elaborates that its intent, design and approach to determining installed 

capacity for pumped-hydro resources has always been 10 hours of sustained output for all 

units. PJM clarifies that it does not develop or track MWh estimates for pumped-hydro 

resources, but instead monitors and relies on reservoir data, and the exact number of 

available MWh from those reservoir levels can vary.318 PJM clarifies that consistent with 

these reservoir considerations, the MW capacity levels from PJM’s RPM Resource 

 312 Id. at 8.

313 Id. at 8-9.

314 Id. at 9.

315 Id. at 9-10.

316 Id. at 9.

317 Id. at 11.

318 Id. at 12.
Docket No. ER19-469-000, et al. - 58 -

Model were developed based on the level of output each unit could provide on a 

sustained basis for 10 hours, assuming efficient operations. 

iv. Data Request Response

PJM clarifies that every Capacity Storage Resource is also considered a 

Generation Capacity Resource.319 PJM explains that the RAA defines Capacity Resource 

as either a Generation Capacity Resource, Demand Resource, or Energy Efficiency 

Resource, and that PJM classifies all pumped-hydro resources and other Capacity Storage 

Resources as Generation Capacity Resources.320 PJM clarifies that, because they are 

Generation Capacity Resources, Capacity Storage Resources must meet the capability 

and reliability requirements of RAA, Schedules 9 and 10, respectively.321

PJM states that its proposal recognizes “the relative ability of units to maintain 

output at stated capability over a specified period of time.”322 Specifically, an Energy 

Storage Resource that is capable of supplying energy at a higher discharge rate over a 

shorter period of time is technically and operationally capable, by reducing its discharge 

rate, of supplying energy over a longer period of time. PJM contends that parties have 

not presented evidence in this proceeding that Energy Storage Resources are technically 

or operationally incapable of discharging their batteries at a reduced rate in order to 

supply energy on a more sustained basis.

PJM asserts that arguments regarding PJM’s determination of PJM’s system 

reliability needs do not address “the relative ability of units to maintain output at stated 

capability over a specified period of time.”323 Furthermore, PJM explains that such 

arguments also seek to depart from the Commission’s findings in the Capacity 

Performance Order that Capacity Resources are expected to perform on a sustained basis, 

and thus, seek special treatment for Capacity Storage Resources. Moreover, PJM avers 

that technical and operational requirements specific to Capacity Storage Resources do not 

 319 Data Request Response at 3.

320 Id. at 4 (citing RAA, art. 1).

321 Id. (citing RAA, Schedule 9-10). 

322 Id. at 11.

323 Id. at 12.
Docket No. ER19-469-000, et al. - 59 -

provide any justification for allowing them to base their capacity value on their output 

over a much shorter time period.324 

PJM states that it currently uses received telemetric information to verify that any 

given pumped-hydro unit can produce at its full capacity for 10 hours or more.325 PJM 

further states that it applies an analogous process for Energy Storage Resources, which 

consists of receiving information regarding capability and verifying the information 

received. 

v. Comments on Data Request Response

Advanced Energy Economy and Clean Energy Entities object to PJM’s 

characterization of their objections to the 10-hour minimum run-time requirement as 

“essentially economic,” arguing instead that PJM’s mischaracterization is misplaced and 

misleading.326 Advanced Energy Economy states that its comments focused on ensuring 

that the rules recognize the physical and operational characteristics of Energy Storage 

Resources and PJM should allow these resources to provide all of the capacity they are 

technically capable of providing.327 

Clean Energy Entities assert that PJM’s reference to Dr. Nicholson’s testimony is 

misleading.328 First, Clean Energy Entities clarify that the majority of their arguments 

did not focus on a disagreement with PJM’s determination of PJM’s system’s reliability 

needs, rather their arguments focused on other distinct issues.329 Additionally, Clean 

Energy Entities explain that Dr. Nicholson’s testimony demonstrated that the 2010 

demand response studies, used by PJM in support of the 10-hour minimum run-time

requirement, did not analyze the right question and were based on outdated information 

 324 Id. at 12-13.

325 Id. at 13.

326 Advanced Energy Economy Comments on Data Request Response at 3; Clean 

Energy Entities Comments on Data Request Response at 4 and 6 (citing Data Request 

Response at 11-12).

327 Advanced Energy Economy Comments on Data Request Response at 3.

328 Clean Energy Entities Comments on Data Request Response at 6.

329 Id. at 6-7. 
Docket No. ER19-469-000, et al. - 60 -

or unreasonable assumptions.330 Clean Energy Entities also clarify that Dr. Nicholson 

did not take any position on how PJM should determine the system’s reliability needs or 

on a specific minimum run-time requirement for non-hydro Energy Storage Resources.

Clean Energy Entities also point out that PJM did not meaningfully address their

argument that PJM’s proposal is not supported by the sole reference to a 10-hour 

minimum run-time requirement in PJM’s governing documents or manuals.331 Clean 

Energy Entities state that PJM’s failure to respond to Clean Energy Entities’ arguments 

highlights that PJM has failed to explain how the proposed 10-hour minimum run-time

requirement ties to calculating non-hydro Energy Storage Resource capacity value.332

Advanced Energy Economy states that PJM failed to answer Question 3(b) of the 

Commission’s Data Request and did not explain how its proposal recognizes the unique 

characteristics and capabilities of Capacity Storage Resources.

333 Advanced Energy 

Economy also contends that PJM’s answer did not explain how its proposal accounts for 

the abilities of Energy Storage Resources compared to other resource types. Advanced 

Energy Economy states that PJM applies the same rules and procedures to Energy 

Storage Resources as it does to pumped-hydro resources, which does not align with the 

requirements of Schedule 9 of the RAA.334 Advanced Energy Economy reiterates that 

because Energy Storage Resources are fundamentally different from pumped-hydro 

resources, it is not appropriate to apply the same capacity valuation procedures to both 

resource types. Advanced Energy Economy also argues that PJM’s evidence to support 

the proposal was not applicable to Energy Storage Resources and the proposal differs 

from those provided by other regions. Advanced Energy Economy concludes that PJM’s 

response does not demonstrate that the proposed minimum run-time requirement is just 

and reasonable or in compliance with Order No. 841.

vi. Commission Determination

We find that PJM’s Tariff satisfies Order No. 841’s general directive with respect 

to allowing electric storage resources to de-rate their capacity to meet minimum run-time 

requirements. However, we institute an FPA section 206 proceeding to direct PJM to 

 330 Id. at 7.

331 Id. at 8.

332 Id. at 9.

333 Advanced Energy Economy Comments on Data Request Response at 2.

334 Id. at 3.
Docket No. ER19-469-000, et al. - 61 -

include its rules and practices regarding minimum run-time requirements in its Tariff. In 

addition, in that same FPA section 206 proceeding, based on the comments submitted in 

this proceeding, we institute an investigation and establish paper hearing procedures 

regarding the justness and reasonableness of PJM’s minimum run-time requirements as 

applied to Capacity Storage Resources. 

Order No. 841 requires only that resources using the Storage Participation Model 

may de-rate their capacity to meet minimum run-time requirements.335 RAA, Schedule 9, 

Procedures for Establishing the Capability of Generation Capacity Resources, provides: 

“Such rules and procedures as may be required to determine and demonstrate the 

capability of Generation Capacity Resources . . . shall be developed by the Office of 

Interconnection and maintained in the PJM Manuals. . . . The rules and procedures shall 

recognize the difference in types of generating units and the relative ability of units to 

maintain output at stated capability over a specified period of time.”336 Because this 

tariff provision requires PJM to maintain rules and procedures in its Manuals that allow 

Capacity Storage Resources to de-rate their capacity to meet minimum run-time 

requirements, we find that PJM’s Tariff satisfies Order No. 841’s general directive that 

resources using the Storage Participation Model may de-rate their capacity to meet 

minimum run-time requirements. In Order No. 841, the Commission did not require 

RTOs/ISOs to make specific changes to minimum run-time or must-offer requirements 

associated with providing capacity.337 We find, therefore, that arguments concerning the 

specifics of PJM’s minimum run-time rules and procedures, including application of 

PJM’s 10-hour minimum run-time requirement to Capacity Storage Resources, are

beyond the scope of PJM’s Order No. 841 compliance filing. 

Nevertheless, we agree with commenters that PJM’s rules and procedures 

regarding minimum run-time requirements for every resource type, which currently are 

included only in PJM’s Manual, must be included in the PJM Tariff. Decisions as to 

whether an item should be placed in a tariff or in a business practice manual are guided 

by the Commission's rule of reason policy,338 under which provisions that “significantly 

 335 See supra P 96.

336 RAA, Schedule 9. 

337 Order No. 841, 162 FERC ¶ 61,127 at P 100.

338 See, e.g., ESA v. PJM, 162 FERC ¶ 61,296 at P 103 (citing Midcontinent Indep. 

Sys. Operator, Inc., 158 FERC ¶ 61,003, at P 69 (2017) (citing PacifiCorp, 127 FERC ¶ 

61,144, at P 11 (2009))); City of Cleveland, Ohio v. FERC, 773 F.2d 1368, 1376 (D.C. 

Cir. 1985) (finding that utilities must file “only those practices that affect rates and 

service significantly, that are reasonably susceptible of specification, and that are not so 

generally understood in any contractual arrangement as to render recitation superfluous”); 
Docket No. ER19-469-000, et al. - 62 -

affect rates, terms, and conditions” of service, are readily susceptible of specification, and 

are not generally understood in a contractual agreement must be included in the tariff, 

while items better classified as implementation details may be included only in a business 

practice manual.339 Although PJM’s minimum run-time rules and procedures applicable 

to all resource types significantly affect rates, terms, and conditions of service, its current 

Tariff does not include any minimum run-time requirements other than specifying that 

the Manual must allow resources to de-rate their capacity. Accordingly, we initiate a 

separate FPA section 206 proceeding in Docket No. EL19-100-000 to direct PJM to 

submit Tariff provisions reflecting the minimum run-time rules and procedures currently 

specified in its Manual for every resource. 

Further, the record in this proceeding raises concerns that PJM’s application of its 

minimum run-time rules and procedures to Capacity Storage Resources may be unjust, 

unreasonable, unduly discriminatory or preferential. For example, commenters argue 

that: (1) it is unduly discriminatory to apply a 10-hour minimum run-time requirement to 

Capacity Storage Resources, while only applying a 4-hour minimum run-time 

requirement to intermittent resources; (2) PJM’s 10-hour minimum run-time requirement 

is not based on a sound consideration of physical and operational characteristics of 

Capacity Storage Resources; and (3) multiple PJM Tariff provisions differ in the 

treatment of Capacity Storage Resources and Generation Capacity Resources, even 

though PJM contends in its Data Request Response that Capacity Storage Resources are 

Generation Capacity Resources. 

Accordingly, in the same FPA proceeding directed above in Docket No. EL19-

100-000, we will initiate paper hearing procedures to investigate whether PJM’s 

minimum run-time rules and procedures are unjust, unreasonable, unduly discriminatory 

or preferential as applied to Capacity Storage Resources. We find that a paper hearing is 

the appropriate procedure to determine whether PJM’s minimum run-time requirements

as applied to Capacity Storage Resources, which must be submitted as part of the filing 

directed below, are just and reasonable and not unduly discriminatory or preferential. 

Accordingly, no later than 45 days after the publication of notice in the Federal 

Register of the Commission’s initiation of this section 206 proceeding in Docket 

No. EL19-100-000, PJM must submit Tariff provisions reflecting its minimum run-time 

rules and procedures applicable to all resources. By the same date, PJM and other 

interested participants may file initial briefs addressing whether PJM’s application of 

 

Public Serv. Comm’n of N.Y. v. FERC, 813 F.2d 448, 454 (D.C. Cir. 1987) (holding that 

the Commission properly excused utilities from filing policies or practices that dealt with 

only matters of “practical insignificance” to serving customers).

339 See, e.g., ESA v. PJM, 162 FERC ¶ 61,296 at P 103 (citing Cal. Indep. Sys. 

Operator Corp., 122 FERC ¶ 61,271, at P 16 (2008)). 
Docket No. ER19-469-000, et al. - 63 -

those rules and practices to Capacity Storage Resources is just and reasonable and not

unduly discriminatory or preferential. Reply briefs may be filed within 30 days 

thereafter. Because we are instituting a separate FPA section 206 proceeding regarding 

PJM’s minimum run-time requirements, PJM’s relevant filing should be filed in the new 

Docket No. EL19-100-000 and all responsive pleadings should be filed only in that new 

docket.

In cases where, as here, the Commission institutes a section 206 investigation on 

its own motion, section 206(b) of the FPA requires that the Commission establish a 

refund effective date that is no earlier than the date of publication by the Commission of 

notice of its intention to initiate such proceeding nor later than five months after the 

publication date. In such cases, in order to give maximum protection to customers, and 

consistent with our precedent, we have historically tended to establish the section 206

refund effective date at the earliest date allowed by section 206, and we do so here as 

well.

340 That date is the date of publication of notice of initiation of the section 206 

proceeding in Docket No. EL19-100-000 in the Federal Register.

Section 206(b) of the FPA also requires that, if no final decision is rendered by the 

conclusion of the 180-day period commencing upon initiation of the section 206 

proceeding, the Commission shall state the reason why it has failed to render such a 

decision and state its best estimate as to when it reasonably expects to make such a 

decision. We expect to issue a final order in this proceeding within 12 months of 

receiving reply briefs.

3. Physical and Operational Characteristics of Electric Storage 

Resources

Order No. 841 adds section 35.28(g)(9)(i)(C) to the Commission’s regulations to 

require that each RTO/ISO have tariff provisions providing a participation model for 

electric storage resources that accounts for the following physical and operational 

characteristics of electric storage resources through bidding parameters or other means: 

State of Charge, Maximum State of Charge, Minimum State of Charge, Maximum 

Charge Limit, Minimum Charge Limit, Maximum Discharge Limit, Minimum Discharge 

Limit, Maximum Charge Time, Minimum Charge Time, Maximum Run Time, Minimum 

Run Time, Discharge Ramp Rate, and Charge Ramp Rate.341 Each RTO/ISO must 

demonstrate how its proposed or existing tariff provisions account for each of these 

specific physical and operational characteristics of electric storage resources, which are 

 340 See, e.g., Idaho Power Co., 145 FERC ¶ 61,122 (2013); Canal Electric Co., 

46 FERC ¶ 61,153, order on reh’g, 47 FERC ¶ 61,275 (1989).

341 Order No. 841, 162 FERC ¶ 61,127 at P 191.
Docket No. ER19-469-000, et al. - 64 -

described further below. Order No. 841 provides that, to the extent that an RTO/ISO 

proposes to comply with the requirement to account for any of the physical and 

operational characteristics of electric storage resources enumerated herein through its 

existing bidding parameters or other existing market mechanisms, it must demonstrate in 

its compliance filing how its existing market rules already account for that particular 

physical and operational characteristic.342 This requirement will improve the ability of 

electric storage resources to provide all of the services that they are technically capable of 

providing and allow RTOs/ISOs to procure these services more efficiently, which will 

enhance competition and, in turn, help to ensure that RTO/ISO markets produce just and 

reasonable rates.343

Order No. 841 does not require RTOs/ISOs to mandate that a resource 

owner/operator submit any information, but instead, provided flexibility to each 

RTO/ISO to determine whether resources using the participation model for electric 

storage resources are required to submit information regarding their physical and 

operational characteristics, or whether resources using the participation model should be 

allowed to submit such information at their discretion.344 This flexibility may help 

prevent resources using the participation model for electric storage resources from having 

to submit information that is not applicable given their physical, operational, or 

commercial circumstances. If an RTO/ISO adopts bidding parameters to account for the 

physical and operational characteristics set forth in Order No. 841, as specified below, it 

must permit a resource using the participation model for electric storage resources to 

submit those bidding parameters in both the day-ahead and the real-time markets.345 

Further, Order No. 841 allows each RTO/ISO to propose, in its compliance filing, 

bidding parameters or other means to account for physical and operational characteristics 

of electric storage resources besides those set forth in Order No. 841.346 To the extent 

that an RTO/ISO includes such a proposal in its compliance filing, it must demonstrate 

that such bidding parameters or other mechanisms do not impose barriers to the 

participation of electric storage resources in its markets.

 342 Id. PP 211, 220, 229.

343 Id. PP 211, 220, 230.

344 Id. P 192.

345 Id. P 193.

346 Id. P 235.
Docket No. ER19-469-000, et al. - 65 -

Order No. 841-A clarifies that the requirement that each RTO/ISO establish tariff 

provisions providing a participation model for electric storage resources that accounts for 

the physical and operational characteristics of electric storage resources through bidding 

parameters or other means allows for regional flexibility.347

State of Charge 

Order No. 841 provides that State of Charge represents the amount of energy 

stored by an electric storage resource in proportion to the limit on the amount of energy 

that it can store, typically expressed as a percentage.348 The State of Charge as a bidding 

parameter is the level of energy that an electric storage resource is anticipated to have 

available at the start of the market interval rather than the end. Order No. 841 provides 

each RTO/ISO the flexibility to propose telemetry requirements for such resources in its 

compliance filing and allows the RTOs/ISOs to implement the requirements of Order No. 

841 consistent with the telemetry requirements for different services and other market 

participants in each RTO/ISO.349 

Maximum State of Charge and Minimum State of Charge 

Maximum State of Charge represents the State of Charge that should not be 

exceeded (i.e., gone above) when the electric storage resource is receiving electric energy 

from the grid.350 This value may either be a static value based on manufacturer 

specifications or a dynamic value depending on the operational characteristics of the 

resource (e.g., if it is providing multiple services and needs to reserve part of its State of 

Charge for another service). 

Minimum State of Charge represents the State of Charge that should not be 

exceeded (i.e., gone below) when an electric storage resource is injecting electric energy 

onto the grid.351 This value may be either a static value based on manufacturer 

specifications or a dynamic value depending on the operational characteristics of the 

resource (e.g., if it is providing multiple services and needs to reserve part of its State of 

Charge for another service). 

 347 Order No. 841-A, 167 FERC ¶ 61,154 at P 93.

348 Order No. 841, 162 FERC ¶ 61,127 at P 213.

349 Id. P 214.

350 Id. P 215.

351 Id. P 215.
Docket No. ER19-469-000, et al. - 66 -

Maximum Charge Limit and Minimum Charge Limit 

The Maximum Charge Limit for a resource using the electric storage resource 

participation model is the maximum MW quantity of electric energy that it can receive 

from the grid.352 The Minimum Charge Limit represents the minimum MW level that the 

resource can receive from the grid.353 

Maximum Discharge Limit and Minimum Discharge Limit 

The Maximum Discharge Limit is the maximum MW quantity that the resource 

can inject onto the grid.354 The Maximum Discharge Limit is analogous to, and could be 

represented by, the economic maximum that traditional generation resources can 

generally submit with their offers. The Minimum Discharge Limit represents the 

minimum MW output level that the resource can inject onto the grid.355 

Maximum Charge Time and Minimum Charge Time 

The Maximum Charge Time represents the maximum duration that a resource 

using the participation model for electric storage resources is able to be dispatched by the 

RTO/ISO to receive electric energy from the grid (e.g., for four hours).356 If the 

RTO/ISO is not managing the State of Charge of the electric storage resource in real 

time, then the Maximum Charge Time will prevent it from dispatching the resource to 

charge for a duration that would exceed the resource’s Maximum State of Charge. 

The Minimum Charge Time represents the shortest duration that a resource using

the participation model for electric storage resources is able to be dispatched by the 

RTO/ISO to receive electric energy from the grid.357 Minimum Charge Time is similar to 

the Minimum Run Time for traditional generation resources but represents the minimum 

time the resource can receive electric energy from the grid, rather than provide electric 

energy to the grid. 

 352 Id. P 216.

353 Id. P 231.

354 Id. P 216.

355 Id. P 231.

356 Id. P 223.

357 Id. P 222.
Docket No. ER19-469-000, et al. - 67 -

Maximum Run Time and Minimum Run Time 

The Maximum Run Time reflects the maximum amount of time that a resource 

using the participation model for electric storage resources is able to inject electric energy 

to the grid due to physical or operational constraints, such as its State of Charge or 

potential obligations to provide other services.358 The Minimum Run Time allows the 

resource to identify the minimum amount of time the resource is physically able to 

discharge electric energy onto the grid. 

Discharge Ramp Rate and Charge Ramp Rate

The Discharge Ramp Rate represents the speed at which electric storage resources 

can move from zero output to full output, or Maximum Discharge Limit.359 The Charge 

Ramp Rate represents the speed at which electric storage resources can move from zero 

output to fully charging, or the resource’s Maximum Charge Limit. 

a. Filing

To comply with Order No. 841’s requirement that RTOs/ISOs account for 

specified physical and operational characteristics of electric storage resources in their 

participation models, PJM proposes to allow Energy Storage Resources using the Storage 

Participation Model to report certain data in PJM Markets Gateway for the day-ahead 

market and, in some instances, to update data for the real-time market.360 The bidding 

parameters that PJM proposes for Energy Storage Resources to submit are: (1) Minimum 

and Maximum Charge Limit; (2) Minimum and Maximum Discharge Limit; and (3) 

Charge and Discharge Ramp Rate. 361 PJM states that these values are required for PJM 

to dispatch resources within their operational range. PJM proposes not to require Energy 

Storage Resources to submit other pieces of data, including: (1) Minimum and 

Maximum State of Charge; (2) Minimum and Maximum Charge Time; and (3) Minimum 

and Maximum Run Time, because the Energy Storage Resource will account for those 

characteristics in managing its State of Charge and these variables are not required for 

 358 Id. P 224.

359 Id. P 234.

360 Compliance Filing, Transmittal at 47-48 (citing Order No. 841, 162 FERC 

¶ 61,127 at PP 235-236). 

361 Id. at 48. 
Docket No. ER19-469-000, et al. - 68 -

PJM to dispatch an Energy Storage Resource within its operational range.

362 Further, 

PJM explains that these values are commitment variables that Energy Storage Resources 

will make independent of PJM. PJM reiterates it is not making commitment decisions for 

Energy Storage Resources.363

For State of Charge, PJM proposes that Energy Storage Resources submit data to 

PJM via real-time telemetry, which PJM will use for the purposes of operational 

situational awareness in real-time.

364 PJM proposes to use the same telemetry 

requirements as it does for other generation resources to reflect State of Charge.

365

b. Protests/Comments

Energy Storage Association, Union of Concerned Scientists, and SEIA assert that 

PJM’s choice not to include State of Charge, Minimum State of Charge, and Maximum 

State of Charge as bidding parameters will cause several problems. Energy Storage 

Association argues that without bidding parameters for State of Charge and related 

characteristics, there is a greater chance of infeasible schedules, and thus, infeasible 

dispatch, poor performance, and imposition of penalties, all of which present barriers to 

the participation of Energy Storage Resources in RTO/ISO markets.366 Union of 

Concerned Scientists adds that this lack this lack of bidding parameters may result in

infeasible schedules may be created which will lead to both increased costs for 

consumers and unrealistic dispatch instructions that will cause deviation penalties for the 

Energy Storage Resource asset owner.367 Energy Storage Association elaborates that,

even if PJM were directed to include the three State of Charge parameters in its Tariff, it 

appears that PJM would not be able to utilize them because PJM considers the three State 

of Charge parameters to be commitment parameters and PJM will not be making 

commitment decisions for Energy Storage Resources.

368 Union of Concerned Scientists 

charges that PJM’s proposal deprives PJM’s market system, operators, and ongoing 

 362 Id. at 48-49. 

363 Id. at 49. 

364 Id. at 48. 

365 Id. at 46 (citing PJM Manual 14D, § 4.2.2). 

366 Energy Storage Association Comments at 14. 

367 Union of Concerned Scientists Comments at 3-4. 

368 Energy Storage Association Comments at 14-15.
Docket No. ER19-469-000, et al. - 69 -

reliability assessments from receiving information relevant to feasible schedules, 

operating levels, and capabilities available for the system.369 SEIA argues the 

Commission should encourage PJM to incorporate State of Charge parameters into 

Energy Storage Resource offers for energy market dispatch.370 SEIA asserts that this 

approach would yield substantial market efficiencies by reducing the potential for 

infeasible schedules and dispatch.371

Energy Storage Association argues that PJM’s failure to include any of the three 

State of Charge parameters (i.e., State of Charge, Maximum State of Charge, and 

Minimum State of Charge) in either the day-ahead or real-time market design is 

inconsistent with Order No. 841.372 Energy Storage Association argues that PJM’s 

proposal to require Energy Storage Resources to use their real-time telemetry to report 

their State of Charge is misplaced because Energy Storage Resources cannot submit their 

State of Charge as defined by Order No. 841 in both the day-ahead and real-time markets 

by telemetering instantaneous State of Charge to PJM.

373 Energy Storage Association 

asserts that PJM’s proposal to have Minimum and Maximum State of Charge parameters 

captured by other submitted bidding parameters reflects PJM’s failure to demonstrate that 

other submitted bidding parameters will account for these unique parameters that 

represent the State of Charge that should not be gone above or gone below when the 

Energy Storage Resource is receiving electric energy from or injecting electric energy 

onto the grid.374 

Energy Storage Association notes that CAISO proposes to have Energy Storage 

Resources submit the State of Charge as a part of a day-ahead offer, and suggests PJM 

use this as an example.

375 Alternatively, Energy Storage Association requests the 

Commission find that PJM’s failure to include State of Charge and related parameters is 

non-compliant with Order No. 841 and direct PJM to initiate a stakeholder process to 

create a market design that (1) includes the three State of Charge parameters (State of 

 369 Union of Concerned Scientists Comments at 3. 

370 SEIA Comments at 6.

371 Id. at 7.

372 Energy Storage Association Comments at 10-11. 

373 Id. at 12. 

374 Id. at 13. 

375 Id.
Docket No. ER19-469-000, et al. - 70 -

Charge, Maximum State of Charge, and Minimum State of Charge) as defined by and 

required by Order No. 841 and (2) utilizes them properly.376 SEIA recommends the 

Commission instruct PJM to facilitate additional stakeholder proceedings to determine 

whether the inclusion of State of Charge parameters enhances energy market dispatch to 

avoid infeasible schedules.

377

Union of Concerned Scientists argues that PJM should adopt elements of its 

pumped-hydro optimizer for the Energy Storage Resources’ State of Charge parameters.

Union of Concerned Scientists asserts that PJM’s choice not to include these 

characteristics contrasts with PJM’s pumped-hydro optimizer, which optimizes the 

availability and performance for pumped-hydro resources to provide PJM dispatchers 

with information and control to reliably operate the system.378 Union of Concerned 

Scientists argues the choice to decline information regarding State of Charge parameters 

seems incongruous and detrimental to reliability efforts give the heightened concern 

regarding grid operations in a changing supply mix.379 Union of Concerned Scientists 

notes that the Commission, in Order No. 841, stated that RTOs/ISOs have gained 

experience from operating pumped-hydro resources and found ways to facilitate their

market participation. Union of Concerned Scientists further notes that the Commission 

should “maintain this mindset” and require PJM to include State of Charge, Minimum 

State of Charge, and Maximum State of Charge as parameters in its markets and 

operating systems.380

Tesla requests that the Commission require RTOs/ISOs to allow electric storage 

resources to submit separate round-trip efficiency (i.e., the amount of energy lost from 

charge to discharge) parameters for summer and winter, for purposes of market 

registration or offers, because round-trip efficiency can be highly dependent on 

temperature.381 Tesla states that seasonal round-trip efficiency levels are sufficient for all 

 376 Id. at 15.

377 SEIA Comments at 1, 6.

378Union of Concerned Scientists Comments at 4. 

379 Id. at 4-5 (citing PJM Interconnection, L.L.C., PJM’s Evolving Resource Mix 

and System Reliability (2017); PJM Interconnection, L.L.C., PJM’s Fuel Security 

Analysis (2018)). 

380 Id. at 5. 

381 Tesla Comments at 23.
Docket No. ER19-469-000, et al. - 71 -

uses, including planning processes and determination of cost bases, so requiring more 

granular updates would not improve RTO/ISO processes.

c. Answer

PJM disagrees with Energy Storage Association’s argument that PJM has failed to 

implement the three State of Charge bidding parameters defined in Order No. 841 (State 

of Charge, Minimum State of Charge, and Maximum State of Charge) in either the dayahead or real-time market.382 PJM argues that its proposal fully accounts for all physical 

and operational characteristics required by Order No. 841, and that PJM will account for 

State of Charge, Minimum State of Charge, and Maximum State of Charge by allowing 

electric storage resources to manage their own State of Charge and reflect the resource’s 

capability through minimum and maximum MW operating range parameters.383 PJM 

clarifies that it will modify Markets Gateway to accept hourly informational State of 

Charge and daily Minimum and Maximum State of Charge parameters for studies and 

analysis that could lead to further consideration.384

d. Data Request Response

PJM clarifies that its proposed participation model accounts for certain physical 

and operational characteristics of Energy Storage Resources in other bidding parameters 

that participants submit to PJM. For Minimum State of Charge and Maximum State of 

Charge limits, PJM clarifies that these are taken into account via the Maximum and 

Minimum Discharge and Maximum and Minimum Charge values along with the Energy 

Storage Resource’s selection of different operating modes (i.e., continuous mode, charge 

mode, and discharge mode).385 PJM adds, for example, if an Energy Storage Resource is 

charging and is nearing its Maximum State of Charge, the Energy Storage Resource may 

reduce the Maximum Charge to zero to cease charging. Alternatively, PJM offers, if an 

Energy Storage Resource is discharging and nearing the end of its normal discharge 

ability, the Energy Storage Resource may update its limits to ensure that discharging 

stops. 

 382 PJM March 5, 2019 Answer at 25 (citing Energy Storage Association Protest at 

10-11).

383 Id. at 25-26.

384 Id. at 26.

385 Data Request Response at 24. 
Docket No. ER19-469-000, et al. - 72 -

For the Minimum Charge Time, Maximum Charge Time, Minimum Run Time, and 

Maximum Run Time characteristics, PJM notes that Energy Storage Resource operators 

can control these through the choice of operating modes, updating the Maximum and 

Minimum Charge/Discharge parameters, and through priced-based bids or offer curves.386 

PJM clarifies that operating modes will be preset by the Energy Storage Resource for 

hourly intervals, however, the operating modes may be overwritten to zero MW in intraday 

to prevent Energy Storage Resources from violating Minimum/Maximum Charge/Run 

time. PJM offers the example of an Energy Storage Resource with a 7.5 hour Maximum 

Run Time or Maximum Charge Time. That resource may schedule itself in charge mode 

for eight hours in the day-ahead market. Then, as the resource approaches 7.5 hours of 

operations, the resource may adjust its Maximum Charge Limit to zero. Following the 

redispatch of the PJM system, PJM’s dispatch of the resource will drop to zero. Therefore, 

PJM contends, the resource will not run longer than its Maximum Run Time or Maximum 

Charge Time. 

PJM reiterates that it does not intend to manage the State of Charge on behalf of 

resources, and therefore, the parameters of Minimum State of Charge, Maximum State of 

Charge, Minimum Charge Time, and Maximum Charge Time would not constrain the 

output of PJM’s dispatch and pricing engines.387 Similarly, the parameters of Minimum 

Run Time and Maximum Run Time are restrictions on the commitment of an Energy 

Storage Resource, which PJM has indicated resource owners would manage by 

nominating non-zero Maximum Charge and Discharge Limits.

PJM clarifies that both historic and current State of Charge telemetry will be used 

for situational awareness in the day-ahead and real-time markets those markets, but not 

for optimization purposes.

388 PJM adds that, if one or more resources are critical to 

reliability, PJM operators will use the telemetered State of Charge values to confirm that 

an operating schedule is physically achievable and determine whether contingency plans 

are necessary to maintain reliability.

PJM also states the parameters discussed here are dynamic and are a function of 

the real-time State of Charge of the resource.389 PJM argues that the communication of 

these parameters results in costs for market participants, who must calculate the 

appropriate values. PJM adds this also results in a cost for both PJM and the market 

 386 Id.

387 Id. at 25. 

388 Id.

389 Id. at 26. 
Docket No. ER19-469-000, et al. - 73 -

participant, since both will need to establish and maintain communication to ensure 

that the salient operational data is available to PJM dispatchers while also avoiding 

overwhelming PJM dispatchers with irrelevant data. PJM notes that it plans to create 

new data entry pages in its Markets Gateway interface to collect the static Minimum State 

of Charge and Maximum State of Charge parameters as well as the hourly State of 

Charge.

PJM states that it will account for State of Charge at the start of a future market 

interval via the Maximum/Minimum Charge/Discharge values, the three available 

operating modes, and offers.390 PJM provides the example of a resource targeting a 

lower State of Charge in a future interval, and explains that resource may choose 

discharge mode or continuous mode, adjust its discharge maximum to a positive value, 

and submit a supply offer that it believes will clear. PJM adds that if the resource clears 

the market to supply energy, its power output will be dispatched positive, and its State of 

Charge, in turn, will decline.391

e. Commission Determination

We find that PJM’s proposed tariff revisions do not comply with the requirement 

of Order No. 841 to account for the State of Charge, Maximum State of Charge, and 

Minimum State of Charge of resources using the Storage Participation Model. PJM’s 

Storage Participation Model fails to accurately represent the capabilities of Energy 

Storage Resources by only accounting for a small subset of the physical and operational 

characteristics that Order No. 841 required. PJM’s proposal does not fully comply with 

Order No. 841 because the limited bidding parameters available to Energy Storage 

Resources means that PJM would “make assumptions about the state of charge of an 

electric storage resource.”392 Specifically, we find that PJM’s proposal to account for 

Maximum State of Charge and Minimum State of Charge through a market participant’s 

continuous updates to its Maximum/Minimum Charge Limit and Maximum/Minimum 

Discharge Limit bidding parameters fails to accurately represent the capabilities of 

Energy Storage Resources in its market clearing engine. Further, PJM’s proposal to only 

collect State of Charge via real-time telemetry for situational awareness prevents market 

participants from accurately representing their physical and operational characteristics in 

the PJM markets. 

 390 Id.

391 Id. at 26-27. 

392 Order No. 841, 162 FERC ¶ 61,127 at P 213. 
Docket No. ER19-469-000, et al. - 74 -

PJM argues that accounting for State of Charge, Maximum State of Charge, and 

Minimum State of Charge in its dispatch would be tantamount to managing resources’ 

State of Charge. While Order No. 841 does not require that RTOs/ISOs manage

resources’ State of Charge (i.e., optimize Energy Storage Resources’ charge and 

discharge schedules over time),

393 Order No. 841 does require RTOs/ISOs to account for 

State of Charge so that Energy Storage Resources can participate in the energy market 

without receiving dispatch points that violate their physical and operational limits.

394 We

agree with protestors that failing to adequately account for Energy Storage Resources’ 

State of Charge could result in Energy Storage Resources receiving infeasible energy 

schedules. Therefore, we direct PJM to file, within 60 days of the date of issuance of this 

order, a further compliance filing that modifies PJM’s proposed Storage Participation 

Model to more appropriately account for an Energy Storage Resource’s State of Charge, 

Maximum State of Charge, and Minimum State of Charge through bidding parameters or 

other means in both its day-ahead and real-time market dispatch, as required by Order 

No. 841.395

We agree with PJM’s proposal for Energy Storage Resources to submit: 

(1) Minimum and Maximum Charge Limit; (2) Minimum and Maximum Discharge 

Limit; and (3) Charge and Discharge Ramp Rate bidding parameters in both the 

Day-ahead and Real-time markets. However, Order No. 841 requires that the Tariff 

provide for a participation model that accounts for each of the characteristics described in 

the rule.

396 PJM does not account for Minimum and Maximum Charge Limit, Minimum 

and Maximum Discharge Limit, and Charge and Discharge Ramp Rate in its Tariff. 

Accordingly, we direct PJM to file, within 60 days of the date of issuance of this order, a 

further compliance filing to include those bidding parameters in the Tariff. We find that 

those bidding parameters will account for those physical and operational characteristics 

of Energy Storage Resources, as required by Order No. 841. 

 393 Id. P 254.

394 See id. P 189.

395 Id. P 213 (“As noted above in the Requirement to Incorporate Bidding 

Parameters as Part of the Electric Storage Resource Participation Model section . . . we 

require each RTO/ISO to allow a resource using the participation model for electric 

storage resources to submit its State of Charge in both day-ahead and real-time 

markets.”). 

396 See id. P 191 (requiring each RTO/ISO to demonstrate how its proposed or 

existing tariff provisions account for each of these specific physical and operational 

characteristics of electric storage resources, which are described further below).
Docket No. ER19-469-000, et al. - 75 -

We also accept PJM’s proposal not to require Energy Storage Resources to submit 

Minimum and Maximum Charge Time and Minimum and Maximum Run Time. We find 

that this complies with Order No. 841 because, as PJM explains, Energy Storage 

Resources will account for these characteristics in selecting their operating mode (i.e., 

continuous, charge, or discharge). 

We find Tesla’s request that the Commission require PJM to allow electric storage 

resources to submit separate round-trip efficiency levels for summer and winter to be 

outside the scope of this compliance proceeding. Although Order No. 841 affords the 

RTOs/ISOs flexibility to propose additional bidding parameters to account for the 

physical and operational characteristics of electric storage resources, it does not require 

the RTOs/ISOs to account for any other physical and operational characteristics beyond 

those identified above. 

4. State of Charge Management

Order No. 841 requires each RTO/ISO to allow resources using the participation 

model for electric storage resources to self-manage their State of Charge.397 Order 

No. 841 provides that a resource using the participation model for electric storage 

resources that self-manages its State of Charge will be subject to any applicable penalties 

for deviating from a dispatch schedule to the extent that the resource deviates from the 

dispatch schedule in managing its State of Charge. Order No. 841 further provides that,

to the extent that the provision of a particular wholesale service, such as frequency 

regulation, requires a resource providing that service to follow a dispatch signal that has 

the effect of maintaining the resource’s ability to provide the service, an electric storage 

resource that is managing its own State of Charge would still be required to follow such a 

dispatch signal, just as all other resources providing that same service.

RTOs/ISOs are not required as part of Order No. 841 to manage the State of 

Charge for resources using the participation model for electric storage resources.

398 While 

RTOs/ISOs must permit resources to manage their own State of Charge, RTOs/ISOs may 

provide an option for the RTO/ISO to manage an electric storage resource’s State of 

Charge for any particular service or circumstance as they deem appropriate in their 

markets with the consent of the electric storage resource.399 If an RTO/ISO already has a 

mechanism to manage a resource’s State of Charge, then the RTO/ISO must make it 

optional for the electric storage resource owner/operator to use such mechanism so that 

 397 Order No. 841, 162 FERC ¶ 61,127 at P 253.

398 Id. P 254.

399 Id. n.300.
Docket No. ER19-469-000, et al. - 76 -

the electric storage resource is able to manage its own State of Charge if it elects to do 

so.400 Order No. 841 further provides that, where an electric storage resource has the

option to allow the RTO/ISO to manage its State of Charge, the electric storage resource is 

the default manager of the resource’s State of Charge. Order No. 841 states that 

RTOs/ISOs should be able to dispatch resources using the participation model for electric 

storage resources in the same manner as any other market participant to address any 

reliability challenges and should know that the resources have an adequate State of Charge 

to perform the service to which they have committed.401 RTOs/ISOs are not precluded 

from establishing telemetry or other communication requirements necessary to determine 

the capabilities of an electric storage resource in real time. Self-managing electric storage 

resources, just like all market participants, are subject to any non-performance penalties in 

the RTO/ISO tariff. 

a. Filing

PJM states that Energy Storage Resources are in the best position to manage their 

own State of Charge.402 PJM explains that it is not assuming the burden of managing 

Energy Storage Resources’ state-of-charge or commitment decisions; rather, PJM intends 

to require Energy Storage Resources to decide when—based upon the self-management 

of their operation parameters—they participate in PJM’s energy markets. PJM will then 

dispatch participating Energy Storage Resources based upon their most recently 

submitted parameters.403 Because Energy Storage Resources will manage their State of 

Charge, PJM states that it will not make commitment decisions or permit Energy Storage 

Resources to submit start-up costs and no-load costs.404

As discussed above, PJM proposes three potential modes of operation for Energy 

Storage Resource participants in its real-time and day-ahead markets: (1) continuous 

mode, (2) charge mode, and (3) discharge mode.405 PJM explains that, in continuous 

mode, a resource can be dispatched to either charge or discharge within its available 

operating range, as defined by the resource’s specified Maximum Discharge Limit and 

 400 Id. P 254.

401 Id. P 255.

402 Compliance Filing, Transmittal at 48. 

403 Id. at 32-33.

404 Id. at 52.

405 Id. at 33.
Docket No. ER19-469-000, et al. - 77 -

Maximum Charge Limit.406 PJM also explains that resources operating in continuous 

mode would have no limitation on start-up, an assumed instantaneous ramp rate, and the 

ability to update their Maximum Discharge Limit and Maximum Charge Limit in realtime. 

PJM asserts that, while continuous mode offers Energy Storage Resources 

operational flexibility, it does not guarantee each resource economically optimal 

operation across time; rather, PJM’s goal remains the economic optimization of the 

market as a whole.407 PJM explains that it currently uses an optimizer tool to establish 

the day-ahead energy market schedule for certain large pumped-hydro resources; this 

approach allows large pumped-hydro market participants to optimize their own pond 

levels and market participation, while giving PJM dispatchers the information and control 

necessary to reliably operate the system.408 To optimize their own participation, Energy 

Storage Resources will retain the ability to switch to other modes of operation by altering 

relevant parameters in Markets Gateway throughout the operating day.409

Because continuous mode is not compatible with all types of electric storage

resources (i.e., pumped-hydro), PJM proposes allowing charge and discharge modes as 

well.410 Under charge mode, an Energy Storage Resource specifies a Minimum Charge 

Limit, Maximum Charge Limit, and ramp rate, and will only be dispatched to charge. 

Similarly, under discharge mode an Energy Storage Resource specifies a Minimum 

Discharge Limit, Maximum Discharge Limit, and ramp rate, and will only be dispatched 

to discharge.

411 In either mode, an Energy Storage Resource may also submit a nondispatchable fixed MW schedule.

PJM proposes to apply its current telemetry requirements to resources participating 

in the Storage Participation Model. PJM currently requires real-time telemetry for 

resources that are larger than 10 MW, eligible to set prices in PJM’s energy market, 

interconnected to the grid at voltages greater than 50 kV, capacity resources, or 

participating in ancillary services. PJM notes that Energy Storage Resources that do not 

 406 Id. at 33-34.

407 Id. at 34.

408 Id. at 16-17.

409 Id. at 34.

410 Id. at 33.

411 Id. at 35-36.
Docket No. ER19-469-000, et al. - 78 -

have current telemetry requirements will not be required to telemeter under the Storage 

Participation Model.

412 PJM states it will require real-time telemetry of the State of 

Charge from all telemetered Energy Storage Resources for operational situational 

awareness. However, PJM states the telemetered State of Charge will not be used to 

optimize Energy Storage Resources across intervals in energy markets. PJM adds that this 

State of Charge information will inform PJM dispatch about Energy Storage Resources

that may be coming off their charge and allow PJM dispatch to anticipate and prepare for 

load or generation changes.

413

PJM states that, like all other resources participating in PJM’s day-ahead and realtime markets, Energy Storage Resources will be subject to deviation charges for failing to 

follow PJM dispatch.414 PJM proposes that Energy Storage Resources will incur 

deviation charges in the same manner as other resources, and an Energy Storage 

Resource will incur deviation charges when it (1) does not have a dispatchable range and 

fails to match its real-time output to the day-ahead schedule; (2) is not dispatched below 

the economic maximum; or (3) does not follow within 10 percent of the dispatch signal 

and the calculated deviation for the hour is greater than or equal to 5 MWh.415 

b. Protests/Comments

NextEra supports PJM’s proposal to have Energy Storage Resource operators selfmanage their State of Charge, and argues that PJM’s proposal provides a good model for 

other regions to follow.416 NextEra adds that this approach is appropriate because Energy 

Storage Resources, rather than RTOs/ISOs, are better equipped to evaluate the many 

physical and economic factors that influence the optimal modes of market participation 

from moment-to-moment. In short, NextEra asserts that PJM provides the adequate and 

appropriate tools for Energy Storage Resource operators to communicate through PJM’s 

Markets Gateway on a timely real-time basis.417

 412 Id. at 46-47 (citing Manual 14D, § 4.2.2).

413 Id. at 47. 

414 Id. at 53.

415 Id.; Manual 28: Operating Agreement Accounting, § 5 (Revision 81, 

October 25, 2018).

416 NextEra Comments at 11. 

417 Id. at 11-12. 
Docket No. ER19-469-000, et al. - 79 -

Tesla states that it does not oppose the option to utilize energy neutral signals for 

frequency regulation, but requests that the Commission require that PJM and other 

RTOs/ISOs provide the option for electric storage resources to self-manage their State of 

Charge during the provision of frequency regulation and to submit asymmetrical offer 

curves for regulation up and regulation down service.418 Tesla argues that energy neutral

signals for the provision of frequency regulation represent RTO/ISO-management of an 

electric storage resource’s State of Charge, and that Order No. 841 expressly requires that 

each RTO/ISO allow electric storage resources to self-manage their State of Charge.419 

Tesla argues that electric storage resources should have the option to self-manage their 

State of Charge when providing frequency regulation, and be allowed to provide an 

asymmetric offer curve for regulation up and regulation down. Tesla explains that an 

electric storage resource that is fully charged cannot offer its full capacity for frequency 

regulation with an energy neutral signal, but that it could provide its full capacity if it 

were allowed to bid only regulation up. Likewise, Tesla explains a fully discharged 

electric storage resource cannot provide frequency regulation based on an energy neutral 

signal, but could provide its full capacity for regulation down service. 

SEIA asserts that, even though the Commission did not mandate that the RTOs/ISOs 

manage electric storage resources’ State of Charge in Order No. 841, such an approach 

would create significant market efficiencies, especially with coming market changes as 

new electric storage resources enter the markets.420

Public Interest Organizations argue that under PJM’s proposal, PJM will not 

optimally dispatch Energy Storage Resources in real-time and that PJM’s proposal to 

permit Energy Storage Resources to self-manage their State of Charge severely limits 

their ability to utilize rapid response capabilities and manage the ebb and flow of energy 

real-time.421 According to Public Interest Organizations, Energy Storage Resource

owners have two methods to attempt to optimize their real-time participation, neither of 

which comes close to optimizing Energy Storage Resource participation in real-time: 

they may set static buy (charge) and sell (discharge) offers, and continuously update their 

Minimum and Maximum Charge Rates to reflect energy limits, or they may chase prices 

by monitoring LMPs and self-scheduling operations.422 Public Interest Organizations 

 418 Tesla Comments at 22-23.

419 Id.

420 SEIA Comments at 6-7.

421 Public Interest Organizations Comments at 19-20.

422 Id. at 20.
Docket No. ER19-469-000, et al. - 80 -

state that an Energy Storage Resource owner who entered charge and discharge offers 

and relied on economic real-time scheduling would need a prescient knowledge of future 

real-time prices to make even approximately optimal offers. Similarly, Public Interest 

Organizations argue that monitoring real-time prices and self-scheduling fares no better. 

Public Interest Organizations argue that the delay inherent in this approach means that 

Energy Storage Resources will not be able to respond to rapid price movements, and the 

owner’s lack of knowledge regarding the system outlook over the next hour or so would 

reduce them to little better than guessing if they should be charging or discharging during 

any interval.423 Public Interest Organizations assert that storage offers potential benefits 

in real-time operations beyond managing price volatility and the simple Energy Storage 

Resource model proposed in the filing offers little opportunity to realize these benefits.424

c. Data Request Response

In response to a question as to whether resources using PJM’s Storage 

Participation Model may self-manage their State of Charge, PJM clarifies that they may. 

PJM adds that the State of Charge is a consequence of the power output over time. 

Because resources control their power output via their choice of mode, Maximum and 

Minimum Charge/Discharge Limits, and offers by virtue of controlling their power 

output, resources can manage their State of Charge.425 Additionally, PJM proposes to 

add language to its Tariff clarifying that resources will be responsible for their own State 

of Charge Management.

PJM also proposes to add the following definition of State of Charge Management 

to its Tariff: “the control of State of Charge of an [Energy Storage Resource] Market 

Participant using minimum and maximum charge and discharge limits, changes in 

operating mode, charge and discharging offer curves, and self-scheduling of nondispatchable purchases and sales of energy in PJM’s markets. State of Charge 

Management shall not interfere with an [Energy Storage Resource] Model Participant’s 

obligation to follow PJM dispatch, consistent with all other resources.”426

 423 Id. at 20-21. 

424 Id. at 21. Public Interest Organizations state that storage may “help manage 

ramps, reduce the uplift associated with startup and shutdown of inflexible units, [and] 

rapidly shift between reserves, regulation and energy.”

425 Data Request Response at 28. 

426 Id. at 29.
Docket No. ER19-469-000, et al. - 81 -

d. Commission Determination

We find that PJM’s proposed Storage Participation Model complies with Order 

No. 841 because it allows Energy Storage Resources to manage their State of Charge. 

While Public Interest Organizations argue that PJM’s proposal to require Energy Storage 

Resources to self-manage their State of Charge severely limits their ability to utilize rapid 

response capabilities and manage the ebb and flow of energy in real-time, Order No. 841 

explains that RTOs/ISOs are not required to manage an electric storage resource’s State 

of Charge and that resources must be permitted to self-manage their own State of Charge. 

Thus, we find that PJM’s proposal to require Energy Storage Resources to manage their 

State of Charge complies with Order No. 841.

We also find that PJM’s proposal that Energy Storage Resources, like all other 

resources participating in PJM’s day-ahead and real-time markets, will be subject to 

deviation charges for failing to follow PJM dispatch complies with Order No. 841. Order 

No. 841 provides that a resource using the participation model for electric storage 

resources that self-manages its State of Charge will be subject to any applicable penalties 

for deviating from its dispatch schedule in managing its State of Charge. 

We further find that PJM’s proposal to apply its current telemetry requirements to 

resources participating in the Storage Participation Model complies with Order No. 841.

Order No. 841 does not preclude RTOs/ISOs from establishing telemetry or other 

communication requirements necessary to determine the capabilities of an electric storage 

resource in real-time. 

In response to Tesla’s comments regarding resources providing frequency 

regulation, we note that Order No. 841 addresses this issue by explaining that, to the 

extent that the provision of a particular wholesale service, such as frequency regulation, 

requires a resource providing that service to follow a dispatch signal that has the effect of 

maintaining the resource’s ability to provide the service, an electric storage resource that 

is managing its own state of charge would still be required to follow such a dispatch 

signal, just as all other resources providing that same service.427 We disagree with Tesla

that the Commission must require PJM to allow Energy Storage Resources to submit 

asymmetrical offer curves for regulation up and regulation down service, as it was not a 

requirement in Order No. 841, and thus, is outside the scope of this proceeding. As 

explained above, we find that PJM’s proposal complies with Order No. 841’s requirement 

to allow resources to self-manage their State of Charge.

 427 Order No. 841, 162 FERC ¶ 61,127 at P 253.
Docket No. ER19-469-000, et al. - 82 -

5. Minimum Size Requirement

Order No. 841 adds section 35.28(g)(9)(i)(D) to the Commission’s regulations to 

require that each RTO/ISO have tariff provisions providing a participation model for 

electric storage resources that establishes a minimum size requirement for participation in 

the RTO/ISO markets that does not exceed 100 kW.428 This minimum size requirement 

includes all minimum capacity requirements, minimum offer to sell requirements, and 

minimum bid to buy requirements for resources participating in these markets under the 

participation model for electric storage resources. Under this requirement, an RTO/ISO 

may allow offer and/or bid quantities smaller than or equal to 100 kW, but an RTO/ISO 

may not require a resource using the electric storage resource participation model to 

submit offer and/or bid quantities larger than 100 kW.429 The Commission found that 

minimum size requirements do not need to be resource specific or location-specific.430

Order No. 841-A denies requests for rehearing regarding the minimum size 

requirement,431 including MISO’s request for clarification or, in the alternative, rehearing 

to phase in the implementation of the minimum size requirement.432 In response to 

MISO’s request for clarification that the 100 kW limit does not apply to the Minimum 

Charge Limit or Minimum Discharge Limit, Order No. 841-A clarifies that the minimum 

size requirement does not prohibit an RTO/ISO from establishing a minimum size limit 

that is lower than 100 kW on any minimum capacity requirements, minimum offer to sell 

requirements, or minimum bid to buy requirements. Order No. 841-A clarifies further 

that it is possible that the quantities for the Minimum Charge Limit and Minimum 

Discharge Limit may be smaller than 100 kW for resources using the participation model 

for electric storage resources. However, Order No.841-A does not specify how the 

minimum size requirement may affect the quantities submitted for some of the physical 

and operational characteristics of electric storage resources, and stated that the 

Commission would not prejudge how the RTOs/ISOs may propose any such relationships 

 428 Id. P 270.

429 Id. P 276.

430 Id. P 273.

431 Order No. 841-A, 167 FERC ¶ 61,154 at PP 102-104.

432 Id. P 105.
Docket No. ER19-469-000, et al. - 83 -

between the minimum size requirement and the physical and operational characteristics 

of resources using the participation model for electric storage resources.433

a. Filing

PJM states that its current 100 kW participation threshold is consistent with the 

Commission’s minimum size threshold.434

b. Data Request Response

PJM states that 100 kW is the minimum offer threshold for all resources 

participating in all of its markets.435 PJM states that, for example, its Tariff provides that 

“a Sell Offer shall state quantities in increments of 0.1 [MW].”436 PJM also cites to 

Attachment K-Appendix section 1.10 which provides that Regulation and Synchronized 

Reserve offers “must equal or exceed 0.1 [MW].”437 To ensure consistency, PJM 

proposes an additional revision to its Tariff, which states that “Energy Storage Resource

Model Participants may offer quantities (including charging and discharging) equivalent 

to 0.1 MW or greater into all applicable PJM markets.”438 PJM further clarifies that all 

generating units, including Energy Storage Resources, that are smaller than 100 kW may 

be aggregated to meet PJM’s 100 kW participation threshold. PJM states that its manuals 

provide that “[g]enerating units that are connected to the system at the same electrical 

location may be aggregated and offered into PJM’s market as a single unit.”439

c. Comments on Data Request Response

Advanced Energy Economy states that PJM has not demonstrated that limiting 

aggregations of Energy Storage Resources to a single electrical location to meet the 

100 kW minimum size requirement is just and reasonable or in compliance with Order 

 433 Id. P 106.

434 Compliance Filing, Transmittal at 11.

435 Data Request Response at 30.

436 Id. at 31 (quoting Tariff, Attachment DD, § 5.6).

437 Id. at 31; Tariff, Attachment K-Appendix, § 1.10.

438 Data Request Response at 31; Tariff, Attachment K-Appendix, § 1.4A(f).

439 Data Request Response at 32 (citing Manual 11, § 2.3.3).
Docket No. ER19-469-000, et al. - 84 -

No. 841.440 Rather, Advanced Energy Economy requests the Commission direct PJM to 

allow Energy Storage Resource aggregation across a broader area.441

d. Commission Determination

We find that the minimum size requirement for resources using the Storage

Participation Model provided in PJM’s Tariff complies with the requirements of Order 

No. 841 because PJM has established a minimum size requirement that does not exceed 

100 kW, as required by Order No. 841. Additionally, we find Advanced Energy 

Economy’s request that the Commission require PJM to allow Energy Storage Resource

aggregation across a broader area to be outside the scope of this proceeding because 

Order No. 841 does not address the aggregation of Energy Storage Resources or other 

resources.

442

6. Energy Used to Charge Electric Storage Resources

a. Price for Charging Energy

Order No. 841 adds section 35.28(g)(9)(ii) to the Commission’s regulations to

require that the sale of electric energy from the RTO/ISO markets to an electric storage 

resource that the resource then resells back to those markets be at the wholesale LMP.443 

This provision applies regardless of whether the electric storage resource is using the 

electric storage resource participation model or participates in RTO/ISO markets through 

other means, as long as the resource meets the definition of an electric storage resource 

set forth in Order No. 841. An electric storage resource’s wholesale energy purchases 

should take place at the applicable nodal LMP, and not the zonal price.444 

Order No. 841 finds that, when an electric storage resource is charging to resell

energy at a later time, then its behavior is similar to other load and applicable 

transmission charges should apply.445 However, Order No. 841 finds that electric storage 

 440 Advanced Energy Economy Comment on Data Request Response at 7.

441 Id. at 7-8.

442 See Order No. 841-A, 167 FERC ¶ 61,154 at PP 30, 143, 155.

443 Order No. 841, 162 FERC ¶ 61,127 at P 294.

444 Id. P 296.

445 Id. P 297. To the extent that load resources located at a single node pay 

different transmission charges than load resources located across multiple nodes, each 
Docket No. ER19-469-000, et al. - 85 -

resources should not be charged transmission charges when they are dispatched by an 

RTO/ISO to provide a service (such as frequency regulation or a downward ramping 

service).

446 Order No. 841-A clarifies that the Commission’s use of the phrase 

“applicable transmission charges” was intended to convey that an RTO/ISO may propose 

to apply its existing rate structure for transmission charges to an electric storage resource 

that is charging at wholesale but is not being dispatched by the RTO/ISO to provide a 

service in the RTO/ISO markets.447 Order No. 841-A further clarifies that, on 

compliance, each RTO/ISO may propose that any electric storage resource that is 

charging for the purpose of participating in an RTO/ISO market but is not being 

dispatched by the RTO/ISO to provide a service should be assessed charges consistent 

with how the RTO/ISO assesses transmission charges to wholesale load under its existing 

rate structure. Order No. 841-A also states that if an RTO/ISO proposes not to apply 

transmission charges to an electric storage resource that is charging at wholesale but is 

not being dispatched by the RTO/ISO to provide a service, then the RTO/ISO must 

demonstrate that exempting such a resource from these charges is reasonable given its 

existing rate structure for transmission charges. 

With respect to the meaning of a “service,” Order No. 841-A acknowledges that 

the participation of electric storage resources in RTO/ISO markets may convey a range of 

benefits, particularly under certain system conditions, but declines to grant clarification 

that charging pursuant to economic dispatch always qualifies as a service.

448 However, 

Order No. 841-A does clarify that services do not need to be limited to ancillary services 

and that they can include any service defined in an RTO/ISO tariff. Order No. 841-A 

explains that to the extent that an RTO/ISO seeks to create a new service that would 

involve charging pursuant to economic dispatch under certain system conditions, the 

RTO/ISO may propose such revisions to its tariff through a separate FPA section 205 

filing.

Order No. 841 does not require that electric storage resources purchase all electric 

energy for future use from RTO/ISO markets, and does not address whether they can pay 

 

RTO/ISO must apply those transmission charges for single-node resources to electric 

storage resources that are located at a single pricing node, as long as they are not being 

dispatched to provide an ancillary service by an RTO/ISO. 

446 Id. P 298.

447 Order No. 841-A, 167 FERC ¶ 61,154 at P 121.

448 Id. P 120.
Docket No. ER19-469-000, et al. - 86 -

some other rate, such as a retail rate, for charging of co-located generation.449 Regarding 

electric storage resources’ use of the distribution system, the Commission found that it 

may be appropriate, on a case-by-case basis, for distribution utilities to assess a wholesale 

distribution charge to an electric utility participating in the RTO/ISO markets.450 Order 

No. 841-A clarifies that the Commission will consider any proposal to establish a rate for 

providing wholesale distribution service to an electric storage resource for its charging on 

a case-by-case basis (e.g., a facility-specific rate, a wholesale distribution service rate that 

applies to all or some subset of electric storage resources, a generally applicable 

wholesale distribution service tariff, or any other rate mechanism).451

Additionally, Order No. 841 finds that efficiency losses are charging energy and 

therefore not a component of station power load. Thus, charging energy lost to 

conversion inefficiencies should be settled at the LMP as long as those efficiency losses 

are an unavoidable component of the conversion, storage, and discharge process that is 

used to resell energy back to RTO/ISO markets and are not a component of what an 

RTO/ISO considers onsite load.452 With respect to directly integrated and other ancillary 

loads, Order No. 841 provides RTOs/ISOs flexibility to determine whether they are a 

component of charging energy or a component of station power.

Order No. 841-A denies Pacific Gas and Electric’s request to clarify that states 

have jurisdiction to determine how power flowing from the distribution grid into the 

electric storage resource located behind the customer meter is split between retail 

consumption and wholesale charging for later discharge into the wholesale markets. 

Order No. 841-A further reiterates that the Commission’s finding regarding charging 

energy did not address payment of the retail rate for energy and therefore Order No. 841 

does not authorize electric storage resources to bypass retail rates for its on-site electricity 

consumption, as Pacific Gas & Electric suggested.

453

 449 Order No. 841, 162 FERC ¶ 61,127 at P 299.

450 Id. P 301.

451 Order No. 841-A, 167 FERC ¶ 61,154 at P 123.

452 Order No. 841, 162 FERC ¶ 61,127 at P 302.

453 Order No. 841-A, 167 FERC ¶ 61,154 at P 119 (citing Order No. 841, 

162 FERC ¶ 61,127 at PP 323-324).
Docket No. ER19-469-000, et al. - 87 -

i. Filing

PJM states that its Tariff currently applies the applicable interval LMP to energy 

bought and sold during the applicable market interval, so Energy Storage Resources can 

buy and sell energy at LMP without further revisions to PJM’s Tariff or Operating 

Agreement.454

PJM proposes to adopt four new definitions to distinguish the unique behaviors 

of Energy Storage Resources purchasing charging energy from the grid: (1) Direct 

Charging Energy, (2) Dispatched Charging Energy, (3) Non-Dispatched Charging 

Energy, and (4) Load-Serving Charging Energy.455

PJM proposes to define Direct Charging Energy as the energy that an Energy 

Storage Resource purchases from the PJM Interchange Energy Market and (i) later resells 

to the PJM Interchange Energy Market; or (ii) is lost to conversion inefficiencies, 

provided that such inefficiencies are an unavoidable component of the conversion, 

storage, and discharge process that is used to resell energy back to the PJM Interchange 

Energy Market.456 PJM explains that Direct Charging Energy is an umbrella term for all 

energy purchased by an Energy Storage Resource that is later resold back to PJM or lost 

to conversion inefficiencies and includes both Dispatched Charging Energy and NonDispatched Charging Energy as subcategories of Direct Charging Energy.457

PJM proposes to define Dispatched Charging Energy as “Direct Charging Energy 

that an [Energy Storage Resource] Model Participant receives from the electric grid 

pursuant to PJM dispatch while providing a service in PJM’s markets.”458 Because Order 

No. 841 provides that transmission charges should not be assessed when an Energy 

Storage Resource is “dispatched to provide a service,” PJM states that absent further 

clarification from the Commission as to what “services” are contemplated in this 

 454 Compliance Filing, Transmittal at 51 (citing Tariff, Attachment K-Appendix, § 

1.7.7).

455 Id. at 54.

456 Id. at 54-55.

457 Id. at 55.

458 Id.
Docket No. ER19-469-000, et al. - 88 -

requirement, PJM will further define the services that constitute Dispatched Charging 

Energy prior to implementation of the Storage Participation Model.

459

PJM proposes to define Non-Dispatched Charging Energy as “[a]ll Direct 

Charging Energy that an [Energy Storage Resource] Model Participant receives from the 

electric grid that is not otherwise Dispatched Charging Energy.”460 PJM explains that 

Non-Dispatched Charging Energy includes all charging energy purchased by an Energy 

Storage Resource when it does not notify PJM of the charging and does not schedule 

charging.

PJM proposes to define Load Serving Charging Energy as energy that is purchased 

from the PJM Interchange Energy Market and stored in an Energy Storage Resource for 

later resale to end-use load.461 Load Serving Charging Energy is separate and distinct 

from Direct Charging Energy.462 PJM explains that, according to its Tariff, only a Load 

Serving Entity may purchase energy that is physically withdrawn from the grid, stored in 

an Energy Storage Resource, and then provided to an end user.463

 459 Id. at 55 n.135.

460 Id. at 55.

461 Id.; Tariff, Attachment K-Appendix, § 1.7.2.

462 Compliance Filing, Transmittal at 56.

463 Id. The RAA defines a Load Serving Entity as:

any entity (or the duly designated agent of such an entity), 

including a load aggregator or power marketer, (i) serving endusers within the PJM Region, and (ii) that has been granted the 

authority or has an obligation pursuant to state or local law, 

regulation or franchise to sell electric energy to end-users 

located within the PJM Region. Load Serving Entity shall

include any end-use customer that qualifies under state rules or 

a utility retail tariff to manage directly its own supply of 

electric power and energy and use of transmission and ancillary 

services. 

RAA, Art. 1 (Definitions).
Docket No. ER19-469-000, et al. - 89 -

PJM proposes that Energy Storage Resources purchasing Non-Dispatched 

Charging Energy must be Transmission Customers paying for transmission service under 

either Part II or Part III of the Tariff.464 PJM also proposes to adopt new PJM Tariff, 

Attachment F-2 (Form of Network Integration Transmission Service Agreement for 

Purchases of Non-Dispatched Charging Energy), which will allow Energy Storage 

Resources utilizing the Storage Participation Model to obtain Network Transmission 

Service for purchases of Non-Dispatched Charging Energy with detailed transparency 

regarding the charges and credits applied to such purchases.

465 PJM proposes that 

Network Transmission Service and Point-to-Point Transmission Service are not required 

for purchases of Dispatched Charging Energy.466 

PJM proposes to exempt Direct Charging Energy from specific charges currently 

allocated to load, including charges related to Reactive Service as well as miscellaneous 

credits and charges allocated to load.467 More specifically, PJM proposes to exempt 

Direct Charging Energy from Non-Deviation Uplift Charges;468 Reactive Service 

Charges;469 Control Area Service Charges;470 Inadvertent Interchange and meter 

correction charge billing adjustments;471 LMP surplus charges and credits;472 and Auction 

Revenue Rights.473

 464 Compliance Filing, Transmittal at 56-58 (citing Tariff, Attachment KAppendix, § 1.4A.1).

465 Id. at 57-58 (citing Tariff, Attachment F-2: Form of Network Integration 

Transmission Service Agreement for Purchases of Non-Dispatched Charging Energy).

466 Compliance Filing, Tariff, Attachment K-Appendix, § 1.4A.1(b).

467 Compliance Filing, Transmittal at 58-59.

468 Id. at 59 (citing Tariff, Attachment K-Appendix, § 3.2.3).

469 Id. at 59-60 (citing Tariff, Attachment K-Appendix, § 3.2.3B).

470 Id. at 60 (citing Tariff, Schedule 9-1).

471 Id. (citing Tariff, Attachment K-Appendix, §§ 3.7 and 3.6-3.6.4).

472 Id. (citing Tariff, Attachment K-Appendix, § 5.5).

473 Id. (citing revisions to Tariff, Attachment K-Appendix, § 7.4.2).
Docket No. ER19-469-000, et al. - 90 -

PJM also proposes to exempt Direct Charging Energy from charges allocated to 

Transmission Customers in the following PJM markets: Synchronized Reserves, 

Regulation, Capacity Market charges; Economic Demand Response in the Day-Ahead 

and Real-Time Markets; and Emergency Demand Response.474

ii. Protests/Comments

The New Jersey Commission supports PJM's enumeration of a Load Serving 

Charging Energy product because it will ensure that energy purchased for end-use will 

remain in the purview of a load serving entity under state jurisdiction.475 However, the 

New Jersey Commission argues that providing load serving entities proper jurisdictional 

authority over Load Serving Charging Energy does not cure the potential jurisdictional 

issues raised in the implementation of interconnection requirements and the protections 

envisioned by Order No. 841.476 

iii. Data Request Response

PJM explains that all purchases from PJM’s energy market are at the applicable 

nodal LMP, including an Energy Storage Resource’s wholesale energy purchases.477 

PJM states that its compliance filing proposes to establish the right of an Energy Storage 

Resource to purchase electric energy from PJM’s markets.478 According to PJM, because 

it is critical to ensure that PJM solely engages in sales for resale and does not

inadvertently make end-use sales, PJM’s proposed tariff revisions limit the right of 

 474 Id. at 61.

475 New Jersey Commission Comments at 5-6 (citing Compliance Filing, 

Transmittal at 55-56 (“Load Serving Charging Energy: ‘Load Serving Charging Energy’

is energy that is purchased from the PJM energy markets by an [Load Serving Entity] and 

stored in an [Energy Storage Resource] for later resale to end-use load.”)).

476 Id. at 6.

477 Data Request Response at 32 (citing Tariff, Attachment K-Appendix, § 1.7.7 

(“The price paid for energy bought and sold in the PJM Interchange Energy Market and 

for demand reductions will reflect the hourly [LMP] at each load and generation bus, 

determined by the Office of the Interconnection in accordance with this Agreement.”)).

478 Id. at 33 (citing Tariff, Attachment K-Appendix, § 1.7.2 (“Only Market Buyers 

and Energy Storage Resources shall be eligible to purchase energy or related services in 

the PJM Interchange Energy Market. Market Buyers shall comply with all requirements 

for making purchases from the PJM Interchange Energy Market.”)).
Docket No. ER19-469-000, et al. - 91 -

Energy Storage Resources to make purchases from PJM to only those purchases that are 

stored for later resale to PJM markets. PJM states that resales to end-users must only be 

made by Load Serving Entities that have been authorized to do so under appropriate state 

or local law.479

iv. Commission Determination

We find that PJM’s compliance filing complies with the requirements of Order 

No. 841 regarding the price paid for an electric storage resource’s charging energy. 

Specifically, PJM’s Tariff provides that the price paid for energy bought and sold in the 

PJM Interchange Energy Market and for demand reductions will reflect the hourly LMP 

at each load and generation bus.480 PJM’s proposed Tariff revisions also limit the right of 

Energy Storage Resources to make purchases from PJM to only those purchases that are 

stored for later resale to PJM markets. We also find that PJM complies with the 

requirement to settle charging energy lost to conversion inefficiencies at the wholesale 

LMP. Specifically, PJM’s proposed definition of Direct Charging Energy includes 

energy purchased from PJM markets, stored, and returned to PJM’s markets or lost to 

conversion inefficiencies.481 Therefore, we find that the Tariff provides that sales of 

electric energy from PJM’s markets to an Energy Storage Resource that the resource then 

resells back to those markets will be at the applicable nodal LMP, as required by Order 

No. 841. 

We find that PJM partially complies with the requirement to not assess 

transmission charges to an Energy Storage Resource that is dispatched to withdraw 

energy to provide a service. PJM defines Dispatched Charging Energy as “Direct 

Charging Energy that an [Energy Storage Resource] Model Participant receives from the 

electric grid pursuant to PJM dispatch while providing a service in PJM’s markets.”482 

PJM’s proposed Tariff provisions state that “Network Transmission Service and Point-toPoint Transmission Service are not required for purchases of Dispatched Charging 

Energy.”483 However, PJM has not defined the services that constitute Dispatched 

Charging Energy, stating that it will do so prior to implementation of the Storage 

Participation Model. Accordingly, we direct PJM to file, within 60 days of the date of 

 479 Id. (citing Compliance Filing, Transmittal at 56).

480 Tariff, Attachment K-Appendix, § 1.7.7.

481 Compliance Filing, Attachment A (OATT Definitions C-D).

482 Id.

483 Tariff, Attachment K-Appendix, § 1.4A.1(b).
Docket No. ER19-469-000, et al. - 92 -

issuance of this order, a further compliance filing that provides Tariff provisions 

describing the services that constitute Dispatched Charging Energy.

b. Metering and Accounting Practices for Charging Energy

To help implement the new requirement in section 35.28(g)(9)(ii) of the 

Commission’s regulations, Order No. 841 requires each RTO/ISO to implement metering 

and accounting practices as needed to address the complexities of implementing the 

requirement that the sale of electric energy from RTO/ISO markets to an electric storage 

resource that the resource then resells back to those markets be at the wholesale LMP.484 

Order No. 841 requires each RTO/ISO to directly meter electric storage resources,

485 but 

allows flexibility for each RTO/ISO to propose alternative approaches that may not entail 

direct metering but nonetheless address the complexities of implementing the 

requirement that the sale of electric energy from RTO/ISO markets to an electric storage

resource that the resource then resells back to those markets be at the wholesale LMP.486 

Metering and accounting rules may need to differ based on whether the resource is 

located on the transmission system, the distribution system, or behind the meter.487 

The Commission rejected the suggestion that electric storage resources must 

choose to participate in either wholesale or retail markets due to the complexity of the 

metering and accounting practices.488 The Commission found that it is possible for 

electric storage resources that are selling retail services also to be technically capable of 

providing wholesale services, and it would adversely affect competition in the RTO/ISO 

markets if these technically capable resources were excluded from participation. In 

response to concerns that not requiring electric storage resources to choose to participate 

exclusively in either wholesale or retail markets will allow resources using the 

participation model for electric storage resources to evade the distribution utility’s retail 

service or to simultaneously buy electricity at the retail rate and sell it at the wholesale 

LMP, Order No. 841-A states that each RTO/ISO can address these issues by developing 

its metering and accounting requirements in cooperation with the distribution utilities and 

 484 Order No. 841, 162 FERC ¶ 61,127 at P 322.

485 Order No. 841-A clarifies that the RTO/ISO itself does not need to be the entity 

that directly meters electric storage resources. Order No. 841-A, 167 FERC ¶ 61,154 at P 

138.

486 Order No. 841, 162 FERC ¶ 61,127 at P 322.

487 Id. P 324.

488 Id. P 325.
Docket No. ER19-469-000, et al. - 93 -

relevant electric retail regulatory authorities in its footprint, as the Commission 

recognized in Order No. 841.489 Order No. 841-A also notes that, when the Commission

found that the sale of electric energy from the RTO/ISO markets to an electric storage 

resource that the resource then resells back to those markets must be at the wholesale 

LMP, it was referring to the sale of energy from the grid that is used to charge electric 

storage resources for later resale into the energy or ancillary service markets.490 

Order No. 841 also requires RTOs/ISOs to prevent electric storage resources from 

paying twice for the same charging energy (i.e., they should not have to pay both the 

wholesale and retail price for the same charging energy).

491 To the extent that the host 

distribution utility is unable—due to a lack of the necessary metering infrastructure and 

accounting practices—or unwilling to net out any energy purchases associated with an 

electric storage resource’s wholesale charging activities from the host customer’s retail 

bill, the Commission found that RTOs/ISOs would be prevented from charging that 

resource wholesale rates for the charging energy for which it is already paying retail 

rates.492 Order No. 841-A clarifies that an RTO/ISO could require verification from the 

host distribution utility that it is unable or unwilling to net wholesale demand from retail 

settlement before the RTO/ISO ceases to settle an electric storage resource’s wholesale 

demand at the wholesale LMP.493 Order No. 841-A clarifies further that the Commission 

would consider on compliance each RTO’s/ISO’s proposal to identify whether a 

distribution utility is unable or unwilling to net out from a host customer’s retail bill the 

 489 Order No. 841-A, 167 FERC ¶ 61,154 at P 142 (citing Order No. 841, 162 

FERC ¶ 61,127 at P 324).

490 Id. (citing Order No. 841, 162 FERC ¶ 61,127 at P 294).

491 Id. P 326.

492 Paragraph 326 of the preamble of Order No. 841 uses the phrase “resources 

using the participation model for electric storage resources” with respect to the 

requirements set forth therein (e.g., “we require each RTO/ISO to prevent resources using 

the participation model for electric storage resources from paying twice for the same 

charging energy”). However, section 35.28(g)(9)(ii) of the Commission’s regulations (as 

modified by Order No. 841), which these requirements are intended to implement, 

specifies that it applies to electric storage resources. Thus, the Commission used the 

incorrect term in paragraph 326 of Order No. 841. In this order, we use the correct term 

throughout. 

493 Order No. 841-A, 167 FERC ¶ 61,154 at P 138.
Docket No. ER19-469-000, et al. - 94 -

wholesale energy purchases associated with charging an electric storage resource that is 

participating in the RTO/ISO market. 

i. Filing

In its First Compliance Filing, PJM stated that it will directly meter Energy 

Storage Resources as part of the Storage Participation Model.494 PJM stated that its 

proposed changes to the definitions of Energy Storage Resource and Capacity Storage 

Resource (which were accepted effective February 3, 2019) would allow resources with

retail-serving capability to immediately begin participating in PJM’s capacity, energy, 

and ancillary services markets. PJM explained that it would test its proposed accounting 

methodology on those Energy Storage Resources with retail-serving capability in order to 

obtain sufficient testing data to ensure that an Energy Storage Resource’s wholesale and 

retail sales and purchases are appropriately captured, accounted for, and settled.495 PJM 

stated that it would develop and test its metering and accounting practices prior to 

implementation of the Storage Participation Model on December 3, 2019.496

In the instant compliance filing, PJM proposes Tariff provisions providing that a 

purchaser of Non-Dispatched Charging Energy must arrange to provide directly to the 

Transmission Provider, on a daily basis, its peak load (net of operating behind-the-meter 

generation, but not to be less than zero, unless such generation is separately metered and 

reported to PJM) as well as its hourly load.

497 PJM also proposes that, for behind-themeter generation of a purchaser of Non-Dispatched Charging Energy that requires 

metering pursuant to Operating Agreement, section 14.5, it must arrange for the 

Transmission Owner or electric distribution company to provide directly to PJM 

information pertaining to such behind-the-meter generation and the total load at its 

location as necessary for PJM’s planning purposes.498 PJM also proposes that, to the 

extent required, PJM will reconcile a Non-Dispatched Charging Energy purchaser’s 

hourly energy responsibilities as initially reported to PJM and its hourly energy 

 494 Compliance Filing, Docket No. ER19-462-000, Transmittal at 8.

495 Id. at 8-9.

496 Id. at 2.

497 Compliance Filing, Tariff, Attachment F-2, Specifications for Network 

Integration Transmission Service for Purchases of Non-Dispatched Charging Energy, §§ 

3.1, 3.3.

498 Id. § 3.6.
Docket No. ER19-469-000, et al. - 95 -

consumption based on, or estimated from, metered usage, and provide corresponding

charges and credits at the particular rate.499

ii. Protests/Comments

Advanced Energy Economy contends that PJM must include in its Tariff a basic 

workable framework of its metering and accounting practices.500 Advanced Energy 

Economy states that such practices for Energy Storage Resources must include flexibility 

and provide guidance for resolving disputes for resources connected to the distribution 

grid or located behind the meter.501 Additionally, Advanced Energy Economy explains 

that the metering and accounting practices must be carefully designed and implemented 

so as to not negatively impact competition and just and reasonable rates. 

FirstEnergy Utilities/Dayton P&L/EKPC also contend that PJM’s proposal leaves 

numerous metering issues unresolved that must be addressed, including: installing 

separate metering infrastructure to account for the wholesale market activity and retail 

load of each individual Energy Storage Resource, metering testing obligations, metering 

ownership, metering maintenance, data collection, and cost recovery.502 FirstEnergy 

Utilities/Dayton P&L/EKPC argue that distribution utilities will need to work with state 

commissions to develop or revise processes, rates, and tariffs regarding the development 

of Energy Storage Resource metering infrastructure and policies regarding data 

collection, metering, testing, and maintenance before PJM’s proposal can be 

implemented.503

Several commenters express concern about the ability of electric storage resources 

located on the distribution system or behind the meter to participate in PJM’s markets 

under its compliance proposal.504 These commenters contend that PJM has failed to 

describe how such resources are able to inject and withdraw energy and provide all of the 

 499 Id. § 5.0.

500 Advanced Energy Economy Comments at 7-8.

501 Id. at 8.

502 FirstEnergy Utilities/Dayton P&L/EKPC Comments at 11.

503 Id. at 11-12.

504 See Advanced Energy Economy Comments at 4; EDF Comments at 1; Tesla 

Comments at 18.
Docket No. ER19-469-000, et al. - 96 -

wholesale services they are technically capable of providing.505 To address this issue, 

Advanced Energy Economy states that PJM must revise its Tariff to ensure that its 

proposed participation model includes electric storage resources located on the 

distribution grid or behind the meter and specifically allows such resources to charge and 

discharge at wholesale LMP when dispatched to provide any wholesale services.506 EDF 

similarly asks the Commission to require PJM to explain how its proposed participation 

model allows electric storage facilities located behind the meter or on the distribution 

system to participate on equal footing with transmission-level electric storage facilities 

and to simultaneously participate in wholesale and retail-level programs.507 EDF states 

that PJM does not address whether it will prohibit electric storage resources from dual 

retail/wholesale market participation.508

Public Interest Organizations state that, to avoid conflict with state or local 

jurisdiction over retail electric service, PJM’s past practice has been to deny 

interconnection applications when it could result in electric storage resources charging at 

wholesale and then later discharging to serve retail load.509 They assert that this conflict

appears to have been resolved by the electric storage resource accounting practices PJM 

filed in Docket No. ER19-462-000. However, to remove ambiguity, Public Interest 

Organizations request that the Commission direct PJM to clarify that the potential for

electric storage resources participating in wholesale markets to also provide energy to 

retail loads will no longer serve as grounds for rejecting market participation.

 505 Advanced Energy Economy Comments at 4 (asserting that Order No. 841 

requires each RTO/ISO to provide all Energy Storage Resources, including those located 

on the distribution grid or behind the meter, with a clear path to provide all of the 

wholesale services they are technically capable of providing); EDF Comments at 1; Tesla 

Comments at 18. 

506 Advanced Energy Economy Comments at 6.

507 EDF Comments at 1, 5 (citing Order No. 841, 162 FERC ¶ 61,127 at PP 29, 

325).

508 Id. at 5-6 (citing Order No. 841, 162 FERC ¶ 61,127 at P 325).

509 Public Interest Organizations Comments at 24 (citing David Egan, Distributed 

Energy Resource Scenarios (2016) at 8-9, https://www.pjm.com/-/media/committeesgroups/committees/mrc/20160617-special/20160617-item-06-distributedenergy-resourcescenarios.ashx).
Docket No. ER19-469-000, et al. - 97 -

According to Tesla, PJM’s existing rules allow a behind-the-meter electric storage 

resource to elect a portion of its capacity to serve onsite load as a demand resource and 

another portion of its capacity to operate as a generation resource, which artificially limits 

the amount of capacity the resource can offer as both a demand resource and a generation 

resource.510 To ensure that electric storage resources are compensated comparably for 

the full range of their service, Tesla urges the Commission to require PJM to allow 

behind-the-meter electric storage resources to seamlessly cycle between reducing on-site 

demand and injecting onto the grid.511 

iii. Answers

PJM disagrees with Advanced Energy Economy that metering and accounting 

practices should be documented in its Tariff because, according to PJM, such 

arrangements could show wide diversity and analogous accounting methods (e.g.,

determination of municipal or rural electric co-op load) are not documented in the 

Tariff.

512

PJM states that several commenters request that PJM explain how behind-themeter electric storage resources can participate under PJM’s proposal.513 PJM explains 

that behind-the-meter electric storage resources can participate in PJM under two 

constructs: (1) a “net-excess” construct, where discharging power is first used to reduce 

on-site load, and only unused surplus power is injected onto the grid and sold at 

wholesale to PJM Markets, and (2) a “virtual buy-all/sell-all” construct, where a resource 

is directly metered at the device level and settled at wholesale for 100 percent of its 

energy flows, and the retail customer meter is “grossed-up” so that electric storage 

resource discharging does not inappropriately reduce the customer’s billed load. PJM 

states that under either construct, the retail regulator retains authority over the retail 

billing arrangements, and the Commission retains authority over all wholesale sales. 

PJM states it can accommodate both of these constructs today, and clarifies that it intends 

to document metering and accounting requirements in PJM’s Manuals. 

 510 Tesla Comments at 20-21.

511 Id. at 21.

512 PJM March 5, 2019 Answer at n.91 (citing Advanced Energy Economy 

Comments at 7-8).

513 Id. at 29 (citing Advanced Energy Economy Comments at 4; Tesla Comments 

at 21).
Docket No. ER19-469-000, et al. - 98 -

NRECA filed an answer to Advanced Energy Economy’s and Tesla’s comments 

arguing that the tariff provisions they seek are beyond the scope of the Order No. 841 

compliance proceedings. According to NRECA, the compliance proceedings should not 

become vehicles to restructure, unbundle, or otherwise federally regulate local 

distribution facilities, local distribution services, or retail electric services, which NRECA 

claims would be beyond the requirements of Order No. 841 and the Commission’s 

statutory authority.514

In response to Advanced Energy Economy’s argument that Order No. 841 

“requires a clear path” for electric storage resources on distribution systems or behind the 

retail meter “to be able to inject energy onto the wholesale grid (provided they are 

technically and contractually able to do so) and provide all wholesale services they are 

technically capable of providing,”515 NRECA states that Order No. 841 never uses the 

term “clear path” and instead requires each RTO/ISO to revise its tariff to establish 

market rules that “facilitate . . . participation” by electric storage resources and “remove 

barriers” to such participation.516 According to NRECA, Order No. 841 is exclusively 

addressed to RTOs/ISOs and does not require an RTO/ISO to adopt market rules that 

clear a new path through non-RTO/ISO local distribution facilities, retail meters, or retail 

electric regulation more generally.517 

In response to Tesla’s assertion that behind-the-meter electric storage resources 

should be able to seamlessly transition between serving onsite load and injecting energy 

onto the grid, NRECA states that Order No. 841 never uses the term “seamlessly 

transitioning” or authorizes behind-the-meter storage to operate in contravention of state 

or local law.518 NRECA asserts that nothing in the rule disturbs state and local regulation 

of retail metering, retail net metering, or storage use on local distribution systems, 

including behind-the-meter storage.519 NRECA further argues that Tesla’s reference to a 

program in ISO-NE as a “best practice” for all behind-the-meter resources is beyond the 

 514 NRECA Answer at 2 (citing 16 U.S.C. § 824 (2018)).

515 Advanced Energy Economy Comments at 7. 

516 NRECA Answer at 4 (citing Order No. 841, 162 FERC ¶ 61,127 at PP 1, 3, 19, 

20).

517 Id. (citing Order No. 841, 162 FERC ¶ 61,127 at PP 19, 20; 18 C.F.R. § 

35.28(g)(9)). 

518 Id. at 5-6 (citing Tesla Comments at 18).

519 Id. at 6.
Docket No. ER19-469-000, et al. - 99 -

scope of the issues in these compliance proceedings and that mechanisms to prevent 

double-compensation of distributed energy resource (DER) aggregations must be 

addressed in Docket No. RM18-9-000.520

iv. Data Request Response

In response to a request for PJM to provide specific citations to show how the 

metering requirements of PJM’s Manual 14D are applicable to Energy Storage 

Resources, PJM states that it considers all Energy Storage Resources that inject onto the 

grid and sell electric energy in applicable PJM markets to be generators. PJM adds that 

its Tariff’s definition of Small Generation Resource covers Energy Storage Resources. 

PJM notes that Energy Storage Resources interconnecting with PJM will execute an 

Interconnection Service Agreement or a Wholesale Market Participation Agreement, 

which will contain the necessary metering information.521

PJM clarifies that it does not intend to make a filing with the Commission 

regarding the metering and accounting practices that PJM will implement on December 

3, 2019. PJM states that, consistent with existing practice, those metering and accounting 

practices will be located in PJM’s Manuals.522 PJM states that it plans to present to 

stakeholders at the May 20, 2019 DERs Subcommittee draft metering and accounting 

practices for Energy Storage Resources in various configurations. PJM explains that both 

“net excess” and “virtual buy all/sell all” approaches will be included among the 

presented draft practices and it will document the practices in its manuals prior to the 

December 3, 2019 implementation deadline.523

With respect to preventing Energy Storage Resources from paying twice for the 

same charging energy, PJM states that it will work with Energy Storage Resources to 

facilitate meeting all requirements to opt in to the participation model, both for new and 

existing resources. PJM states that those Energy Storage Resources that are located 

behind a retail meter must be identified as such in the PJM New Services Queue under 

existing rules. PJM explains that, because such resources are potentially subject to retail 

 520 Id. at 6-7 (citing Tesla Comments at 19).

521 Data Request Response at 30. 

522 Id. at 33-34.

523 Id. at 34.
Docket No. ER19-469-000, et al. - 100 -

billing for charging energy, PJM staff will coordinate with the distribution utility to 

identify whether it intends to bill charging energy at retail, and if it does, PJM will not set 

up metering or accounting that would bill the resource for charging energy at wholesale.

v. Comments on Data Request Response

Advanced Energy Economy states that PJM’s intention to include its metering and 

accounting practices in PJM Manuals does not satisfy the Commission’s “rule of reason 

policy.”524 Advanced Energy Economy explains that provisions that have a significant 

impact on rates, terms, and conditions of service must be included in the Tariff. As a 

result, Advanced Energy Economy argues that the Commission should direct PJM to 

provide a basic workable methodology or framework in its Tariff, with the precise 

metering and accounting details laid out in PJM’s Manuals.525

vi. Commission Determination

We find that PJM’s proposed tariff revisions partially comply with the 

requirements of Order No. 841 pertaining to metering and accounting practices for 

electric storage resources and require PJM to file, within 60 days of the date of issuance 

of this order, a further compliance filing as more fully described below.

As discussed above, PJM has demonstrated that its Tariff provides that Energy 

Storage Resources will be charged wholesale LMP for their charging energy that is 

purchased from PJM markets to be resold back to those markets. PJM explains that it is

still in the process of developing the necessary metering and accounting practices to 

implement that Tariff requirement. Thus, as commenters point out, PJM’s proposal 

leaves numerous metering and accounting issues unaddressed. We encourage PJM to 

continue working with stakeholders to draft and implement those practices before 

implementation of the Storage Participation Model. 

We are concerned that PJM’s compliance filing does not include any information 

about its metering and accounting practices in its Tariff and that PJM does not intend to 

make a filing with the Commission regarding such practices. Decisions regarding 

whether an item should be placed in a tariff or in a business practice manual are guided 

by the Commission's rule of reason policy, under which provisions that “significantly 

affect rates, terms, and conditions” of service, are readily susceptible of specification, and 

are not generally understood in a contractual agreement must be included in a tariff, 

while items better classified as implementation details may be included only in the 

 524 Advanced Energy Economy Comment on Data Request Response at 5.

525 Id. at 5-6.
Docket No. ER19-469-000, et al. - 101 -

business practice manual.526 PJM states that analogous accounting methods are not 

documented in the Tariff and it, therefore, does not propose to include its accounting 

methods related to Energy Storage Resources in its Tariff. Given that these metering and 

accounting practices will enable Energy Storage Resources located on the transmission 

system, the distribution system, and behind the meter to pay the wholesale LMP for 

charging energy as required by Order No. 841, we find that these practices significantly

affect rates, terms, and conditions and a general description of them should be included in 

the Tariff.527 

While we are requiring PJM to include a general description of its metering and 

accounting practices in its Tariff, we agree with PJM and commenters that more detailed 

descriptions of these practices, which are not readily susceptible to specification, may be 

appropriately considered implementation details and can be located in business practice

manuals or other documents. However, due to the unique nature of Energy Storage 

Resources, it may be particularly difficult for Energy Storage Resource market 

participants to ascertain which sets of procedures apply to them. Because Energy Storage 

Resource market participants should be aware of which procedures apply to them in order 

to plan and manage their participation in the markets accordingly, we find that it is 

imperative that the Tariff cite to the specific agreements, manuals, or other documents 

where market participants can locate the rules applicable to Energy Storage Resources. 

Accordingly, we direct PJM to file, within 60 days of the date of issuance of this order,

Tariff revisions to include a general description of the metering and accounting practices 

for Energy Storage Resources as well as references directing market participants to any 

other PJM documents containing the details of those practices. 

Order No. 841 also requires RTOs/ISOs to prevent electric storage resources from 

paying twice for the same charging energy. PJM states in its Data Request Response 

that, because Energy Storage Resources located behind a retail meter are potentially 

subject to retail billing for charging energy, PJM staff will coordinate with the 

distribution utility to identify whether it intends to bill charging energy at retail, and if it 

does, PJM will not set up metering or accounting that would bill the resource for charging 

energy at wholesale. Accordingly, we also direct PJM to file, within 60 days of the date 

of issuance of this order, a further compliance filing revising its Tariff to state that PJM

will not charge a distribution-connected Energy Storage Resource for charging energy if 

 526 ESA v. PJM, 162 FERC ¶ 61,296 at P 103; see also City of Cleveland, Ohio v. 

FERC, 773 F.2d at 1376 (finding that utilities must file “only those practices that affect 

rates and service significantly, that are reasonably susceptible of specification, and that 

are not so generally understood in any contractual arrangement as to render recitation 

superfluous”).

527 See, e.g., ESA v. PJM, 162 FERC ¶ 61,296 at P 103 (citations omitted).
Docket No. ER19-469-000, et al. - 102 -

the distribution utility is unwilling or unable to net out any energy purchases associated 

with the Energy Storage Resource’s wholesale charging activities from the host 

customer’s retail bill. 

As to concerns regarding the ability of Energy Storage Resources located on the 

distribution system or behind the meter to participate in PJM’s markets,528 we reiterate 

that PJM’s definitions of Energy Storage Resource and Capacity Storage Resource are 

inclusive of those resources located on a distribution system or behind the meter.529 As 

described above, we find that PJM has demonstrated that all Energy Storage Resources, 

including those located on the distribution system or behind the meter, will be eligible to 

provide all capacity, energy, and ancillary services that they are technically capable of 

providing.530

However, we agree with commenters that Order No. 841 requires each RTO/ISO 

to allow electric storage resources to participate in RTO/ISO markets even if they also 

provide retail services.531 In Order No. 841, the Commission was not persuaded by the 

suggestion that electric storage resources must choose to participate in either wholesale or 

retail markets and found that excluding resources technically capable of providing both 

retail and wholesale services would adversely affect competition in the RTO/ISO 

markets.532 Because PJM states that its metering and accounting practices are still under 

development, it is unclear how and to what extent those practices will allow for 

participation in retail and wholesale markets. Thus, we direct PJM to file, within 60 days 

of the date of issuance of this order, a further compliance filing to explain how its 

metering and accounting practices will allow for participation in retail and wholesale 

markets and to make any necessary Tariff changes to ensure the separation and proper 

accounting of wholesale and retail uses.

 528 See, e.g., Advanced Energy Economy Comments at 4; EDF Comments at 1; 

Tesla Comments at 18.

529 See First Compliance Order, 166 FERC ¶ 61,087 at P 10.

530 See supra P 92.

531 See, e.g., EDF Comments at 5-6 (citing Order No. 841, 162 FERC ¶ 61,127 at 

P 325).

532 Order No. 841, 162 FERC ¶ 61,127 at P 325.
Docket No. ER19-469-000, et al. - 103 -

7. Miscellaneous

a. Protests/Comments

Joint Consumer Advocates assert that PJM’s proposal fails to address pending 

capacity market changes related to the minimum offer price rule (MOPR),

533 which they 

argue creates uncertainty and decreases potential Energy Storage Resource

participation.534 Joint Consumer Advocates emphasize that subjecting Energy Storage 

Resources to the MOPR would create additional barriers to participation because Energy 

Storage Resources would face further constraints on their flexibility to participate in 

PJM’s capacity market. 

Joint Consumer Advocates argue that any Order No. 841 compliance filing or 

MOPR construct approved by the Commission must consider the ability of the states to 

incent preferred resources and the goals of Order No. 841.535 Joint Consumer Advocates 

warn that additional barriers to Energy Storage Resource participation would deny states 

in PJM access to an important resource type as they pursue their respective clean energy 

goals.536 Further, Joint Consumer Advocates state that the Capacity Order makes no 

distinction between resource types and should be read to include Energy Storage

Resources, if the inclusion aligns with a state’s policy preference.537

P3 states that, while it and its members have been supportive of the Commission’s 

directives to more fully integrate Energy Storage Resources in the wholesale markets, it 

urges the Commission to not lose sight of the importance of price formation efforts that 

must remain a priority as Energy Storage Resources and other DERs become more 

integrated into the markets—especially given the fact that those resources now have the 

ability to set energy and capacity wholesale market prices.538 P3 states that PJM’s 

compliance filing is largely silent on efforts PJM will take to ensure that price formation 

efforts are respected, prioritized, and administered in its markets given the new role of 

Energy Storage Resources as energy, capacity and ancillary market price-setting 

 533 See PJM Interconnection, L.L.C., 163 FERC ¶ 61,236 (2018) (Capacity Order).

534 Joint Consumer Advocates Comments at 13.

535 Id. at 14.

536 Id. at 13.

537 Id. at 13-14.

538 P3 Comments at 3-4.
Docket No. ER19-469-000, et al. - 104 -

resources.539 P3 urges the Commission to reiterate the importance of PJM’s continued 

efforts to ensure proper price formation for all resources in PJM’s markets.

According to PJM’s Market Monitor, much of the urgency to address Energy 

Storage Resource-related issues is removed when recognizing the basic economics of 

Energy Storage Resources.

540 PJM’s Market Monitor argues that Energy Storage 

Resources are not economic in PJM markets as energy and capacity resources and are not 

likely to become economic unless the difference between on-peak and off-peak prices 

changes significantly.541 

PJM’s Market Monitor also asserts that PJM’s proposed Energy Storage Resource

capacity market rules are not adequate.542 PJM’s Market Monitor states that every MW 

of capacity offered must be a substitute for every other MW and argues that PJM has not 

explained why Energy Storage Resources are a substitute for generation. In support of its 

position, PJM’s Market Monitor states that Energy Storage Resources are net load, not 

net generation, which means that the system cannot be served by their capacity alone. 

PJM’s Market Monitor argues that, rather than maintaining a resource agnostic standard, 

PJM is proposing a standard for Energy Storage Resources that is quite different from the 

standard that exists for thermal generation. 

PJM’s Market Monitor further contends that PJM’s capacity market is based on 

atavistic rules about the determinants of the need for capacity based on peak load only.543 

PJM’s Market Monitor argues that there is no way to reflect Energy Storage Resources as 

off-peak capacity demand, with a capacity payment obligation, and as on-peak capacity 

resources.

544 PJM’s Market Monitor argues that if the cost of capacity were assigned in a

manner more consistent with the actual economics, the fact that Energy Storage 

Resources are using capacity at times and providing capacity at times could be reflected 

in their costs and revenues in a manner analogous to the energy market. PJM’s Market 

Monitor states that, rather than attempting to fit Energy Storage Resources into the 

existing capacity construct, another model for their participation is a well-designed 

 539 Id. at 5.

540 PJM’s Market Monitor Comments at 3.

541 Id. at 4. 

542 Id.

543 Id. at 8. 

544 Id.
Docket No. ER19-469-000, et al. - 105 -

demand side product and that equivalent revenue streams would result if Energy Storage 

Resources outside the capacity market were used to reduce customers’ loads. PJM’s

Market Monitor further explains that the revenues to Energy Storage Resources in that 

case would result from the reduction of actual payments by customers for capacity which 

are in turn a function of both the wholesale and retail allocation of capacity costs to 

customers.

Public Interest Organizations request the Commission condition its approval of 

PJM’s proposed Storage Participation Model for the energy and ancillary service markets 

on PJM providing annual publicly available reports to the Commission that address the 

economic and operational efficiency with which PJM uses Energy Storage Resources. 545 

Additionally, Public Interest Organizations request that PJM investigate developing 

metrics for measuring the dispatch performance of Energy Storage Resources using 

Perfect Dispatch or similar methods, to be implemented once Energy Storage Resources

have more than a de minimis participation in PJM’s energy market.546

b. Answer

Joint Consumer Advocates reiterate the concern raised in its comments that PJM 

must address the impact of pending capacity market changes on Energy Storage Resource

participation.547 Joint Consumer Advocates state that, despite the request of multiple 

parties, PJM has not offered even minimal guidance as to how it would incorporate stateincentivized Energy Storage Resources into any alternative regime, as required by the 

Capacity Order, that would shield them from the devastating consequences of a 

MOPR.548

c. Commission Determination

We find issues raised by commenters about PJM’s MOPR and price formation to 

be outside of the scope of PJM’s compliance with Order No. 841.

 545 Public Interest Organizations Comments at 22.

546 Id. at 23.

547 Joint Consumer Advocates Answer at 4 (citing Calpine Corp v. PJM 

Interconnection, L.L.C., 163 FERC ¶ 61,236, at P 158 (2018)).

548 Id. at 5 (citing Joint Consumer Advocates Comments at 10-14, New Jersey 

Commission Comments at 7-8).
Docket No. ER19-469-000, et al. - 106 -

PJM’s Market Monitor also raises a number of general concerns about allowing 

Energy Storage Resources to participate in PJM’s markets, including that they are not 

currently economic in energy or capacity markets and that they do not fit into the existing 

capacity market construct in the same way as thermal generation.

549 We also find these 

comments to be beyond the scope of this compliance proceeding. Order No. 841 requires 

that each RTO/ISO establish a participation model that ensures eligibility to participate in 

the RTO/ISO markets and that compensates electric storage resources for the wholesale 

services they provide in the same manner as other resources that provide these 

services.

550 Thus, Order No. 841 requires PJM to allow Energy Storage Resources to 

participate in PJM’s markets and to be compensated in the same manner as other 

resources. Additionally, as discussed above, Order No. 841 requires each RTO/ISO to 

allow a resource using the participation model for electric storage resources to be eligible 

to provide all capacity, energy, and ancillary services that it is technically capable of 

providing. 

Finally, we also decline to require PJM to provide annual reports or to develop 

additional metrics for measuring dispatch performance of Energy Storage Resources as 

these were not requirements of Order No. 841.

8. Effective Date

Order No. 841 requires each RTO/ISO to file tariff changes needed to implement 

the requirements of Order No. 841 within 270 days of its publication in the Federal 

Register, and allows a further 365 days from that date to implement the tariff 

provisions.551 The Commission declined to allow the RTOs/ISOs to develop their own 

implementation schedules, finding that the compliance and implementation schedule set 

forth in the Final Rule is appropriate.552 The Commission stated that the regional 

flexibility allowed in the Final Rule will assist the RTOs/ISOs in meeting the compliance 

and implementation deadlines.553 Order No. 841-A reiterates that Order No. 841’s 

 549 PJM’s Market Monitor Comments at 3-4.

550 Order No. 841, 162 FERC ¶ 61,127 at P 52.

551 Order No. 841, 162 FERC ¶ 61,127 at P 348.

552 Id. P 349.

553 Id. P 350.
Docket No. ER19-469-000, et al. - 107 -

compliance and implementation schedule is reasonable, and declines to permit the 

individual RTOs/ISOs to propose their own timeframes.554

a. PJM’s October 8, 2019 Filing

On October 8, 2019, PJM made a filing informing the Commission of its intent to 

continue with all necessary preparatory work in anticipation of implementing the Storage 

Participation Model on December 3, 2019.555 PJM requests that, if the Commission 

intends for PJM to activate the Storage Participation Model on December 3, 2019, the 

Commission issue an order accepting its proposed Tariff revisions by no later than 

November 3, 2019. PJM states that if the Commission issues an order accepting the 

Tariff revisions after November 3, 2019, or takes some other action with respect to PJM’s 

proposed revisions, PJM may need to seek a modified effective date for its Tariff records, 

depending on the specific circumstances. PJM states that it is therefore resubmitting its 

Tariff records in this proceeding to change the corresponding effective dates from 

12/3/2019 to 12/31/9998 to provide for this flexibility and will submit an informational 

filing and updated Tariff records with the appropriate effective date once such date is 

known.556

b. Commission Determination

PJM represents that it is prepared to implement its proposed Tariff revisions on 

December 3, 2019 as long as the Commission issues an order accepting such revisions by 

November 3, 2019. We affirm that we find PJM’s proposed Tariff revisions to be just 

and reasonable and accept them as in compliance with Order No. 841, to become 

effective December 3, 2019. Thus, we expect PJM to implement its currently proposed 

Tariff revisions on December 3, 2019, as required by Order No. 841. However, we will 

allow PJM to propose a later effective date for the further compliance directives 

contained herein, which require PJM to add certain additional Tariff revisions, separate 

from and in addition to those PJM has already proposed, in order to achieve full 

compliance with the Final Rule. 

 554 Order No. 841-A, 167 FERC ¶ 61,154 at P 154.

555 PJM October 8, 2019 Filing at 2.

556 Id. at 2-3.
Docket No. ER19-469-000, et al. - 108 -

The Commission orders:

(A) PJM’s compliance filing is hereby accepted, as modified, effective 

December 3, 2019.

(B) PJM is hereby directed to submit a further compliance filing in Docket 

No. ER19-469-000, within 60 days of the date of this order, as discussed in the body of 

this order.

(C) Pursuant to the authority contained in and subject to the jurisdiction 

conferred upon the Federal Energy Regulatory Commission by section 402(a) of the 

Department of Energy Organization Act and the FPA, particularly section 206 thereof, 

and pursuant to the Commission’s Rules of Practice and Procedure and the regulations 

under the FPA (18 C.F.R. Chapter I), the Commission hereby institutes a proceeding in 

Docket No. EL19-100-000, concerning the justness and reasonableness of PJM’s 

minimum run-time requirements, as discussed in the body of this order. 

(D) PJM is hereby directed to submit tariff provisions reflecting its minimum 

run-time rules and procedures applicable to all resources, in a new ER docket, no later 

than 45 days after the publication of notice in the Federal Register of the Commission’s 

initiation of the section 206 proceeding in Docket No. EL19-100-000, as discussed in the 

body of this order. By the same date, PJM and other interested parties may file initial 

briefs addressing PJM’s application of those rules and procedures to Capacity Storage 

Resources in Docket No. EL19-100-000, as discussed in the body of this order. Reply 

briefs may be filed no later than 30 days thereafter.

(E) Any interested person desiring to be heard in Docket No. EL19-100-000 

must file a notice of intervention or motion to intervene, as appropriate, with the 

Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426, 

in accordance with Rule 214 of the Commission’s Rules of Practice and Procedure, 

18 C.F.R. § 385.214 (2019), within 21 days of the date of issuance of this order. The 

Commission encourages electronic submission of interventions in lieu of paper using the 

“eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit 

an original and three copies of the protest or intervention to the Federal Energy 

Regulatory Commission, 888 First Street, NE, Washington, DC 20426.

(F) The Secretary shall promptly publish in the Federal Register a notice 

of the Commission’s initiation of the proceeding under section 206 of the FPA in Docket 

No. EL19-100-000. 
Docket No. ER19-469-000, et al. - 109 -

(G) The refund effective date in Docket No. EL19-100-000 established 

pursuant to section 206 of the FPA shall be the date of publication in the Federal Register

of the notice discussed in Ordering Paragraph (F) above.

By the Commission. Commissioner McNamee is concurring with a separate statement 

 attached.

( S E A L )

Kimberly D. Bose,

Secretary.
Docket No. ER19-469-000, et al. - 110 -

V. Appendix A: Abbreviated Names of Intervenors

The following table contains the abbreviated names of intervenors that are used in 

this Order on Compliance Filings. 

Abbreviation Intervenor(s)

Advanced Energy Economy Advanced Energy Economy

AEP American Electric Power Service 

Corporation

AMP American Municipal Power, Inc.

APPA American Public Power Association

AWEA American Wind Energy Association

Calpine Calpine Corporation

Dayton Power & Light The Dayton Power and Light Company

DC People’s Counsel Office of the People's Counsel for the 

District of Columbia

Delaware Public Advocate Delaware Division of the Public 

Advocate

Delaware Municipal Electric Delaware Municipal Electric 

Corporation, Inc.

Dominion Dominion Energy Services, Inc.

EKPC East Kentucky Power Cooperative, Inc.

EDF EDF Renewables, Inc.

EPSA Electric Power Supply Association

Energy Storage Association Energy Storage Association

Exelon Exelon Corporation

FirstEnergy Utilities The FirstEnergy Utility Companies

GlidePath GlidePath Power Solutions LLC

Illinois Citizens Utility Board Illinois Citizens Utility Board

Illinois Commerce Commission Illinois Commerce Commission
Docket No. ER19-469-000, et al. - 111 -

Lincoln Clean Energy Lincoln Clean Energy, LLC

Lockheed Martin* Lockheed Martin Corporation

LS Power LS Power Associates, L.P.

Maryland Office of People's Counsel Maryland Office of People's Counsel

Maryland Commission Maryland Public Service Commission

Michigan Agency for Energy Michigan Agency for Energy

Michigan Commission Michigan Public Service Commission

NRECA National Rural Electric Cooperative 

Association

New Jersey Commission New Jersey Board of Public Utilities

New Jersey Division of Rate Counsel New Jersey Division of Rate Counsel

NextEra NextEra Energy Resources, LLC

North Carolina Electric Membership 

Corporation

North Carolina Electric Membership 

Corporation

NRDC NRDC/FERC Project

NRG NRG Power Marketing LLC

P3 PJM Power Providers Group

Penn Oak Penn Oak Services, LLC

PJM’s Market Monitor Monitoring Analytics, LLC, acting in its 

capacity as the Independent Market 

Monitor for PJM

RESA Renewable Energy Systems Americas, 

Inc.

Union of Concerned Scientists Union of Concerned Scientists

Voith Hydro Voith Hydro, Inc.

* late intervention
Docket No. ER19-469-000, et al. - 112 -

VI. Appendix B: Abbreviated Names of Initial Commenters

The following table contains the abbreviated names of initial commenters that are 

used in this Order on Compliance Filings.

Initial 

Commenters

Abbreviation Commenter(s)

Advanced Energy Economy Advanced Energy Economy

AWEA/Solar Council American Wind Energy 

Association and the Solar Council

Calpine Calpine Corporation

Dominion Dominion Energy Services, Inc. on 

behalf of Virginia Electric and 

Power Company

EDF EDF Renewables, Inc.

Energy Storage Association Energy Storage Association

Exelon Exelon Corporation

FirstEnergy Utilities/Dayton 

P&L/EKPC 

FirstEnergy Utility Companies, 

The Dayton Power and Light 

Company, and East Kentucky 

Power Cooperative, Inc.

GlidePath GlidePath Power Solutions LLC

PJM’s Market Monitor557 Monitoring Analytics, LLC

Joint Consumer Advocates Office of the People’s Counsel for 

the District of Columbia, Citizens 

Utility Board, and Delaware 

Division of the Public Advocate

New Jersey Commission New Jersey Board of Public 

Utilities

 557 PJM’s Market Monitor filed an errata to its February 7, 2019 comments on 

February 8, 2019.
Docket No. ER19-469-000, et al. - 113 -

NextEra558 NextEra Energy Resources, LLC

P3 PJM Power Providers Group

Public Interest Organizations Public Interest Organizations

SEIA Solar Energy Industries 

Association

Tesla Tesla, Inc.

Union of Concerned Scientists Union of Concerned Scientists

Voith Hydro Voith Hydro, Inc.

 558 NextEra filed an errata to its February 7, 2019 protest on February 8, 2019.
Docket No. ER19-469-000, et al. - 114 -

VII. Appendix C: Abbreviated Names of Reply Commenters

The following table contains the abbreviated names of reply commenters that are 

used in this Order on Compliance Filings. 

Abbreviation Commenter(s) 

Energy Storage Association Energy Storage Association

FirstEnergy Utilities The FirstEnergy Utility Companies, 

et al.

Joint Consumer Advocates Office of the People’s Counsel for 

the District of Columbia, Citizens 

Utility Board, and Delaware Division 

of the Public Advocate

PJM’s Market Monitor Monitoring Analytics, LLC

NRECA National Rural Electric Cooperative 

Association

PJM PJM Interconnection, L.L.C.
Docket No. ER19-469-000, et al. - 115 -

VIII. Appendix D: Tariff Sections

Docket No. ER19-469-000

PJM Interconnection, L.L.C., Intra-PJM Tariffs

C-D, OATT Definitions – C-D, 18.0.0

E-F, OATT Definitions – E - F, 22.0.0

L-M-N, OATT Definitions – L – M - N, 21.0.0

OATT Definitions – R - S, OATT Definitions – R - S, 18.0.0

SCHEDULE 9-1, OATT SCHEDULE 9-1, 3.0.0

Attachment F-2, OATT Attachment F-2, 0.0.0

OATT ATT K APPX Sec 1.4A, OATT Attachment K Appendix Sec 1.4A Energy 

Storage Resource, 0.0.0

OATT ATT K APPX Sec 1.7, OATT Attachment K Appendix Sec 1.7 General, 19.0.0

OATT ATT K Appx Sec 3.2, OATT Attachment K Appendix Sec 3.2 - Market Buyers, 

45.0.0

OATT ATT K APPX Sec 3.6, OATT Attachment K Appendix Sec 3.6 Metering 

Reconciliation, 7.0.0

OATT ATT K APPX Sec 3.7, OATT Attachment K Appendix Sec 3.7 Inadvertent 

Interchange, 1.0.0

OATT ATT K APPX Sec 5.2, OATT Attachment K Appendix Sec 5.2 Transmission 

Congestion, 15.0.0

OATT ATT K APPX Sec 5.5, OATT Attachment K Appendix Sec 5.5 Distribution of 

Total, 2.0.0

OATT Attch K Appx Sec 7.4, OATT Attachment K Appendix Sec 7.4 Allocation of 

Auction Re, 15.0.0

C-D, OA Definitions C - D, 20.0.0

E-F, OA Definitions E - F, 14.0.0

I-L, OA Definitions I - L, 14.0.0

M-N, OA Definitions M - N, 12.0.0

S–T, OA Definitions S – T, 14.0.0

OA Schedule 1 Sec 1.4A, OA Schedule 1 Sec 1.4A Energy Storage Resource 

Participation, 0.0.0

OA Schedule 1 Sec 1.7, OA Schedule 1 Sec 1.7 General., 18.0.0

OA Schedule 1 Sec 3.2, OA Schedule 1 Sec 3.2 - Market Buyers, 44.0.0

OA Schedule 1 Sec 3.6, OA Schedule 1 Sec 3.6 - Metering Reconciliation, 7.0.0

OA Schedule 1 Sec 3.7, OA Schedule 1 Sec 3.7 - Inadvertent Interchange, 1.0.0

OA Schedule 1 Sec 5.2, OA Schedule 1 Sec 5.2 Transmission Congestion Credit Cal, 

15.0.0

OA Schedule 1 Sec 5.5, OA Schedule 1 Sec 5.5 Distribution of Total Transmission Los, 

5.0.0

OA Schedule 1 Sec 7.4, OA Schedule 1 Sec 7.4 Allocation of Auction Revenues., 15.0.0
Docket No. ER19-469-000, et al. - 116 -

OA SCHEDULE 2, OA SCHEDULE 2, 8.0.0.

Docket No. ER19-469-001

PJM Interconnection, L.L.C., FERC FPA Electric Tariff

OATT Definitions – R - S, OATT Definitions – R - S, 18.1.0

OATT ATT K APPX Sec 1.4A, OATT Attachment K Appendix Sec 1.4A Energy 

Storage Resource, 0.1.0

OATT ATT K Appx Sec 3.2, OATT Attachment K Appendix Sec 3.2 - Market Buyers, 

45.1.1

S–T, OA Definitions S – T, 14.1.1

OA Schedule 1 Sec 1.4A, OA Schedule 1 Sec 1.4A Energy Storage Resource 

Participation, 0.1.0

OA Schedule 1 Sec 3.2, OA Schedule 1 Sec 3.2 - Market Buyers, 44.1.1
UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

PJM Interconnection, L.L.C. Docket Nos. ER19-469-000

ER19-469-001

EL19-100-000

(Issued October 17, 2019)

McNAMEE, Commissioner, concurring: 

I concur with today’s order insofar as it finds that PJM Interconnection, L.L.C. 

(PJM) complies in part with Order Nos. 8411 and 841-A2 (together, the Storage Orders) 

as issued and the Commission’s regulations.3

 I write separately, however, to express my 

continuing concern that the Commission exceeded its statutory authority under the 

Federal Power Act,

4 and should have, at the very least, provided states the opportunity to 

opt-out of the participation model created by the Storage Orders.5

On February 15, 2018,6 the Commission issued Order No. 841 to remove barriers 

to the participation of electric energy storage resources (ESRs) in the capacity, energy, 

and ancillary service markets operated by Regional Transmission Organizations (RTOs) 

and Independent System Operators (ISOs).7

 In Order No. 841, the Commission denied 

 1 Elec. Storage Participation in Mkts. Operated by Reg’l Transmission Orgs. & 

Indep. Sys. Operators, Order No. 841, 162 FERC ¶ 61,127 (2018) (Order No. 841).

2 Elec. Storage Participation in Mkts. Operated by Reg’l Transmission Orgs. & 

Indep. Sys. Operators, Order No. 841-A, 167 FERC ¶ 61,154 (2019) (Order No. 841-A).

3 18 C.F.R. §§ 35.28(b)(9), 35.28(g)(9) (2019).

4 16 U.S.C. §§ 791a-825r (2018).

5 See generally Order No. 841-A, 167 FERC ¶ 61,154 (McNamee, Comm’r 

concurring in part and dissenting in part) (McNamee Separate Statement).

6 This order was later amended by an errata issued on February 28, 2018. Elec. 

Storage Participation in Mkts. Operated by Reg’l Transmission Orgs. & Indep. Sys. 

Operators, Docket Nos. RM16-23-000 and AD16-20-000, Errata Notice (Feb. 28, 2018).

7 See generally Order No. 841, 162 FERC ¶ 61,127.
Docket Nos. ER19-460-000, et al. - 2 -

requests to allow states to decide whether distribution-level ESRs or those resources 

located behind a retail meter could participate in RTO or ISO markets.8

 On rehearing, in 

Order No. 841-A, a majority of the Commission affirmed these findings and declined to 

provide the states with an opt-out.9

I was not a member of the Commission at the time Order No. 841 was issued, but I 

concurred in part and dissented in part when Order 841-A was issued. Specifically, I 

stated my support for ESRs and my belief that they have the potential to transform the 

electricity industry. But to the extent the Commission’s Storage Orders exercised 

authority over the distribution system and behind-the-meter, I concluded:

[T]he majority has exceeded the Commission’s jurisdictional 

authority by depriving the states of the ability to determine 

whether distribution-level ESRs may use distribution 

facilities so as to access the wholesale markets. By doing so, 

in my view, the Commission claimed jurisdiction over 

functions and assets reserved by statute to the states. Further, 

even if the majority thought they could rightly exercise 

jurisdiction in this matter, I think they should have furthered 

the path of “cooperative federalism” by permitting the states 

to choose whether or not behind-the-meter and distributionconnected ESRs may participate in the wholesale markets 

through an opt-out provision.

10 

Therefore, I concluded that the Commission exceeded its statutory authority in the 

Storage Orders and stated that I would have granted rehearing to reconsider the 

Commission’s assertion of jurisdiction and its failure to provide states the opportunity to 

opt-out of the participation model created by the Storage Orders.11

While I approve PJM’s compliance filing today to the extent it complies with the 

Commission’s Storage Orders, I note that the Storage Orders are presently pending 

judicial review,12 and I reiterate my concern with the Commission’s assertion of 

 8 Id. P 35.

9 Order No. 841-A, 167 FERC ¶ 61,154 at PP 30-56.

10 McNamee Separate Statement, 167 FERC ¶ 61,154 at P 3 (footnotes & citations 

omitted).

11 Id. PP 2-24.

12 See Nat’l Ass’n of Regulatory Comm’rs v. FERC, Nos. 19-1142 and 19-1147 
Docket Nos. ER19-460-000, et al. - 3 -

jurisdiction over ESRs interconnecting either to a distribution system or behind-themeter. Further, I continue to believe the Commission should have included in the Storage 

Orders an opt-out provision for states.

For these reasons, I respectfully concur.

______________________________

Bernard L. McNamee

Commissioner

 

(D.C. Cir. filed July 11, 2019).