On June 22, the Independent Electricity System Operator (“IESO”) tendered a Regulation Service Request for Information (“RFI”). This service has historically been provided by conventional generators under capacity based ancillary services contracts. The IESO has recently contracted energy storage facilities to provide regulation service under both the Alternative Technologies for Regulation (“ATR”) Request for Proposals (“RFP”) and the Phase 1 Energy Storage RFP.
This RFI represents a step in reforming the process for procuring regulation services in Ontario. This opens up the possibility for the development of a regulation services market, similar to what is used in many US jurisdictions. The RFI specifically references FERC Order 755 which addresses how providers of regulation services are to be compensated – i.e. on a pay-for-performance basis. FERC Order 755 favours regulation service providers which are capable of responding quickly and accurately to control signals such as some types energy storage facilities.