Archive: August 24, 2017

K&L Gates Blockchain Energizer – Volume 11
FERC Seeks Additional Comments on Proposed Primary Frequency Response Requirements for Electric Storage and Small Generating Facilities

K&L Gates Blockchain Energizer – Volume 11

By Molly Suda, Buck B. Endemann, and Ben Tejblum

There is a lot of buzz around blockchain technology and its potential to revolutionize a wide range of industries from finance and healthcare to real estate and supply chain management. Reports estimate that over $1.4 billion was invested in blockchain startups in 2016 alone, and many institutions and companies are forming partnerships to explore how blockchain ledgers and smart contracts can be deployed to manage and share data, create transactional efficiencies, and reduce costs.

While virtual currencies and blockchain technology in the financial services industry have been the subject of significant debate and discussion, blockchain applications that could transform the energy industry have received comparatively less attention. Every other week, the K&L Gates’ Blockchain Energizer will highlight emerging issues or stories relating to the use of blockchain technology in the energy space. To subscribe to the Blockchain Energizer newsletter, please click here.


  • Bank Consortium Moves Forward with “Know Your Customer” Distributed Ledger Technology
  • Solar Technology Company Announces ICO to Fund Development of Local, Decentralized Energy Trading Platform
  • UK Startup Testing Blockchain Platform to Cut Time for Switching Energy Suppliers

To view more information on theses topics in Volume 11 of the Blockchain Energizer, click here.

FERC Seeks Additional Comments on Proposed Primary Frequency Response Requirements for Electric Storage and Small Generating Facilities

By Molly Suda, William M. Keyser, and Elizabeth P. Trinkle

In one of its first orders since regaining a quorum, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Request for Supplemental Comments (“Notice”) on August 18, 2017, seeking comments related to circumstances where electric storage resources should be required to provide primary frequency response and the costs associated with primary frequency response capabilities for small generating facilities.

The Notice builds off of comments received in response to FERC’s November 17, 2016 Notice of Proposed Rulemaking (“NOPR”). Along with a number of other proposals, the NOPR proposed to modify the pro forma Large Generator Interconnection Agreement and the pro forma Small Generator Interconnection Agreement to require all new large and small generating facilities, both synchronous and non-synchronous, to install, maintain, and operate equipment capable of providing primary frequency response as a condition of interconnection. The NOPR also proposed including minimum operating requirements for droop and deadband parameters and requirements to ensure timely and sustained responses to frequency deviations.

The NOPR did not include provisions specific to electric storage resources, and several commenters noted that by failing to address electric storage resources’ unique technical attributes, the NOPR requirements could pose an unduly discriminatory burden on such resources. In response to these concerns, FERC seeks additional information to better understand (1) the performance characteristics and limitations of electric storage resources; (2) potential ramifications to electric storage resources from the proposed primary frequency response requirements; and (3) what changes are needed to address the issues raised by stakeholders. While the Notice sets forth a number of specific questions for commenters to address, in general, the Notice seeks comments on operational limitations or challenges and potential adverse effects if electric storage resources are required to provide primary frequency response. The Notice also seeks comments on whether there are reasonable parameters or requirements that could apply to electric storage resources’ provision of primary frequency response.

In response to the NOPR, commenters also suggested a need to further investigate the costs for small generating facilities to install frequency response capability and argued that the proposed requirement would impose disproportionate costs on small generating facilities. Accordingly, to further assess small generating facilities’ ability and cost to comply with the proposed primary frequency response requirement, the Notice seeks comment on:

  • The differences in costs to install, maintain and operate governor or equivalent controls for small generating facilities versus large generating facilities;
  • Whether recent technological advances in primary frequency response capability minimize or eliminate barriers to entry for small generating facilities; and
  • Whether an exemption is appropriate for all or a subset of small generating facilities based on disproportionate cost impacts.

Developers, owners, and operators of electric storage resources and small generating facilities should consider whether the proposed primary frequency response requirements materially affect the cost, operation, and/or feasibility of projects to be developed. The Notice offers interested stakeholders an additional opportunity to shape FERC’s interconnection policy to avoid barriers to the integration of electric storage resources and small generating facilities and ensure any unique features of these technologies are addressed in future rules. The invitation for additional comments suggests that FERC may be interested in building a record to support different treatment or rules for energy storage resources and smaller distributed energy resources compared to traditional generation. Comments are due 21 days after publication of the Notice in the Federal Register.

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