RM15-2 FInal Rule, News Release issued 11/19/2015

November 19, 2015
News Media Contact
Craig Cano | 202-502-8680
Docket Nos. RM15-2-000, RM16-1-000
Item Nos. E-1, E-3

FERC Orders Address Sale, Provision of Ancillary Services
The Federal Energy Regulatory Commission (FERC) today issued a final rule to allow the sale of primary frequency
response service at market-based rates by sellers with market-based rate authority for sales of energy and capacity.
The rule will promote competition in anticipation of growing demand for primary frequency response service as a result
of a reliability standard taking effect in 2016 that requires balancing authorities to meet a minimum frequency
response obligation.
Today’s final rule defines primary frequency response service as a resource standing by to provide autonomous, preprogrammed changes in output to rapidly arrest large changes in frequency until dispatched resources can take over.
Primary frequency response service is one of the tools available to help maintain system frequency within
predetermined boundaries above and below 60 Hertz to ensure reliable operation of the North American electric
system.
Most balancing authorities should be able to use their own resources to meet the Frequency Response and Frequency
Bias Setting Reliability Standard (BAL-003-1), approved by FERC in January 2014. However, the standard does not limit
balancing authorities in how they meet the requirements of the standard, and the Commission believes that some may
be interested in voluntary purchases of a primary frequency response product if doing so would be economically
beneficial.
Under Order No. 2001, any entity selling the service at either market- or cost-based rates must report those sales in its
Electric Quarterly Report to the Commission. The rule takes effect 90 days after publication in the Federal Register.
In a separate order today, FERC proposed to eliminate the exemption for wind generators from the requirement to
provide reactive power. Reactive power is needed to control system voltage for efficient and reliable operation of the
transmission system.
The proposal would require all new interconnecting generators to provide reactive power by revising both the pro
forma Large Generator Interconnection Agreement (facilities larger than 20 megawatts) and the pro forma Small
Generator Interconnection Agreement to eliminate the reactive power exemption for wind generators. The
requirement also would apply to generators making upgrades that require new interconnection requests.
Comments on the proposal are due 60 days after publication in the Federal Register.
R-16-02
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