In Docket No. ER21-864, on January 12, 2021, Meyersdale Storage requested reactive power compensation pursuant to Schedule 2 of the PJM OATT for its 18 MW lithium-ion battery (Facility) which is co-located with GlidePath’s 30 MW Meyersdale Wind Energy Center. The Facility interconnects with Mid-Atlantic Interstate Transmission LLC’s (MAIT) 115 kV Meyersdale North substation in the Pennsylvania Electric Company (Penelec) transmission zone. Meyersdale provides energy and frequency regulation services on a merchant basis to the PJM energy and ancillary services markets and is contractually obligated to provide Reactive Power Service to PJM. It began operation in 2015.
Meyersdale requested reactive power compensation in the amount of $837,000 annually, which it derived using a methodology consistent with AEP. Given that a battery storage facility’s inverter does not function the same as a traditional synchronous generator, Meyersdale did not use the stated “nameplate” power factor as it is not applicable and does not reflect the Facility’s capabilities. Rather, Meyersdale set forth an alternative power factor of 0.70 that differs from the generator nameplate which is traditionally used in an AEP analysis. In response to a protest from the IMM, Meyersdale asserted that, because its data is from testing performed in accordance with PJM Manual 14D requirements, it can operate at significantly lower (i.e. more difficult) power factors than a traditional resource. Meyersdale also asserted that the objective technical descriptions and testing data included with its filing demonstrates Meyersdale’s superior reactive power capabilities, as compared to a conventional resource on a per-MW basis. Meyersdale argued that the IMM’s assertion that “Meyersdale cannot sustain its rated output for a significant period of time” is true for real power for which batteries have output duration limits, but that is irrelevant in the instant filing as it can, in fact, inject or absorb its full reactive power capability at any time, regardless of battery charging conditions (similar to some solar facilities).
In setting the matters for hearing and settlement, FERC stated that under Order No. 841, RTOs and ISOs are required to allow electric storage resources to provide all capacity, energy, and ancillary services that they are technically capable of providing so long as they satisfy the RTOs’/ISOs’ technical requirements. However, FERC was unable to determine, based on the record, whether Meyersdale’s battery storage facility can provide reactive capability consistent with Schedule 2 of the PJM Tariff, and therefore FERC set this threshold question for hearing, along with Rate Schedule in its entirety. The case is in settlement procedures.
In Docket No. ER21-304, in its orders issued in April 2021 and reaffirmed on August 3, 2021, FERC dismissed Cherokee’s submission of a request for reactive power compensation under Schedule 2 of the PJM OATT. FERC found that the Large Generator Interconnection Agreement (LGIA), through which Cherokee claimed entitlement to reactive power compensation, was not in FERC’s authority, since, where a utility is obligated to purchase the total output of a qualifying facility (QF), as in this case, the relevant state exercises authority over the interconnection and the allocation of interconnection costs.
Cherokee owns and operates the Cherokee Energy Center (Facility), which is a (QF) under the Public Utility Regulatory Policies Act of 1978 (PURPA). Cherokee sells capacity and energy from the Facility to Duke Energy Carolinas, LLC (DEC) under a Power Purchase Agreement (PPA), which initially was scheduled to expire on December 31, 2020, but has since been extended until the earlier of an ongoing state proceeding concerning the PPA, or August 29, 2021. Cherokee and DEC are parties to a LGIA providing for the interconnection of the Facility to DEC’s system. Cherokee states that the LGIA requires Cherokee to provide reactive service to DEC with compensation to be set forth in the reactive rate at issue in this proceeding. On November 2, 2020, Cherokee filed the proposed reactive rate schedule with FERC. In that filing, Cherokee also invoked the Commission’s reactive service comparability standard, which requires that a transmission provider pay for reactive services within the established power factor range to the extent the transmission provider pays it own or affiliated generators for that service.
FERC found that Cherokee was not selling the real or reactive output from the Facility to a third party nor did Cherokee state its intention to do so, even after the expiration of the PPA. FERC also found that sales of energy and capacity that made pursuant to a state’s regulatory authority under PURPA includes reactive power. It therefore concluded that it did not have regulatory authority of the LGIA.
Dr. Paul Dumais
CEO of Dumais Consulting with expertise in FERC regulatory matters, including transmission formula rates, reactive power and more.