FERC approves CAISO’s EV, storage-related demand response proposals

by Peter Maloney
APPA News
October 21, 2020

The Federal Energy Regulatory Commission (FERC) has approved tariff revision proposals by the California Independent System Operator (CAISO) designed to enhance demand response using electric vehicle charging stations and energy storage.

The first proposal allows electric vehicle supply equipment (EVSE) to participate in CAISO’s demand response program independently from a host facility.

CAISO said it is seeing a growing number of EV charging stations at large load centers like grocery stores, movie theaters, and offices that frequently operate under the same retail meter and account as their host. Thus, the entire facility must participate as a single metered resource even though the load profiles of the charging station and the host may be very different.

CAISO told FERC that failing to capture the unique load profile of the charging station may send the wrong price signals to the owners of electric vehicles.

To enhance demand response participation in its markets, CAISO proposed allowing EVSE to be treated as a separate load curtailment measure when providing demand response at facilities with onsite load.

CAISO’s proposal does not require those resources to separate EVSE from the rest of their load but, where demand response resources elect to measure EVSE performance separately, CAISO will require the resource to sub-meter the EVSE to avoid co-mingling the EVSE load and the onsite host load’s performance.

The EVSE and onsite host load will continue to operate under a single resource identity and to bid and meet CAISO schedules together as a single resource but will be settled separately based on their individual baselines.

In addition, a proxy demand resource can consist entirely of one or more EVSE resources, with no onsite load, and nothing requires the demand response provider to include onsite load in a proxy demand resource consisting entirely of EVSE. CAISO said the revisions would provide transparency and more accurate price signals for EVSE and onsite load that participate in demand response programs.

In the order, (ER20-2443-000), FERC agreed with CAISO that the revisions would “better capture EVSE’s distinct characteristics, provide more accurate price signals to EVSE owners, and create incentives for them to participate in demand response programs.”

In the second proposal, CAISO requested that behind-the-meter energy storage be required to submit separate bids, for a consumption resource when charging and for a curtailment resource when discharging.

Each bid would have a separate resource identification and its own baseline and demand response energy measurement to establish typical use, using methodologies nearly identical to CAISO’s existing metering generator output methodology.

FERC said that accounting for both energy storage functions “should provide incentives for behind-the-meter energy storage resources to consume energy during oversupply conditions and supply energy during periods of high demand,” enhancing reliability and market efficiency and potentially increasing participation in demand response programs.

FERC, in the Sept. 30 order, also granted CAISO’s request to set the effective date for both proposals to Oct. 1.

CAISO board OKs storage and DER enhancements

In a separate action, CAISO’s board of directors on Oct. 2 approved energy storage and distributed energy resource enhancements designed to make it easier to integrate and operate those resources while maintaining grid reliability, and authorized CAISO management request FERC approval of the proposal.

The approval of Phase 4 of the Energy Storage and Distributed Energy Resources (ESDER 4) enhancements included:

• An optional end-of-hour, state-of-charge parameter to give storage resource owners real-time management of future resource use commitments;
• Offering demand response resource owners the option of including a daily maximum run time constraint, and requiring a minimum curtailment of 1 megawatt (MW) to better manage demand response; and
• Streamlined participation by simplifying agreements for non-generator resources.

CAISO noted that batteries, both stand alone and hybrid, are fast growing components of the resource mix, with more than 1,500 MW scheduled to connect to the grid by the end of 2021.