FERC Approves NYISO Market Access for Behind-the-Meter Resources

On May 17, 2016, the Federal Energy Regulatory Commission (FERC) issued an order, 155 FERC ¶ 61,166 (2016), approving a set of tariff changes proposed by the New York Independent System Operator (NYISO) to permit behind-the-meter generation resources to participate in the grid operator’s energy, ancillary services, and capacity markets.  Through the approved tariff revisions, behind-the-meter resources meeting certain eligibility requirements will now be permitted to bid energy and capacity into the NYISO markets in a manner similar to traditional generators.  To be eligible to participate in the NYISO markets, a behind-the-meter resource must have a minimum nameplate capacity of at least 2 MW, a minimum host load of at least 1 MW, and an interconnection capable of exporting at least 1 MW of energy to New York’s transmission or distribution system.  However, under the new rules, behind-the-meter generation bidding into the market may not participate in demand response or generation buy-back programs.  Recognizing that not all behind-the-meter resources wishing to participate in the NYISO markets would satisfy the approved eligibility criteria, NYISO indicated that it intends to develop additional software, rules, and procedures in the future to integrate additional distributed generation in the wholesale markets and to align the NYISO’s wholesale markets with the New York State Public Service Commission’s Reforming the Energy Vision proceeding.  In approving the changes, FERC noted that participation of behind-the-meter resources in the NYISO markets would “improve the competitiveness, efficiency, and reliability of those markets.”