FERC Commissioner Philip D. Moeller is an energy thought leader and energy rock star of sorts.  He spoke at the Silicon Valley Energy Storage Symposium on Wednesday at AMD in Sunnyvale, Ca in an event organized by Joint Venture Silicon Valley Network.

Tom Stepien, the CEO of flow battery startup Primus Power, introduced the Commissioner and highlighted the sheer number of DOEstoragegrant recipients in the San Francisco Bay Area.  He predicted the energy storage market will be "double-digit billions" in the coming years.

FERC's jurisdiction is over the wholesale electric market.  It's a "quasi-judicial agency," according to Moeller.  

Moeller is optimistic about the energy storage market while acknowledging the "labyrinthine" and "Byzantine" nature of regulatory policy, as well as the sometimes conflicting aims of federal, state and local agencies.

Moeller pointed out that the low price of natural gas and the rising quantity of shale gas is an obstacle to renewable energy penetration.  He spoke of a "quiet revolution" in Pennsylvania and Appalachia with an incredible amount of gas production with worldwide supply implications. He looked ahead and saw a decade of relatively low prices for natural gas and a corresponding dampening of growth in renewables.

Additionally, wholesale electricity prices in the U.S. fell by as much as 50 percent in 2009 -- and that makes it a very difficult environment for alternative energy technologies.

Energy storage is a unique entity and a bit of an orphan in the energy world.  Is it classified as transmission, distribution or transmission?  It can be viewed as having elements of all of those sectors, but ultimately, it has to be viewed through only one of those lenses -- because that's how utilities parse their rate base and the rate base is how utilities get paid.

Moeller said, "Our overall view is that energy storage is unique and doesn't fit neatly into the distribution or transmission box," adding, "Each project has to be treated somewhat differently."

According to Moeller, the electrical grid system wasn't built for intermittent operation and it creates challenges that are a great opportunity for storage.  "It's been kind of manageable up to now," he said.  But Moeller cites the Bonneville system in the Pacific Northwest that absolutely needs storage because of the level of penetration of wind in the region.  He sees it as a great opportunity for storage to develop a market.

Moeller adds,"The good news is that FERC is paying attention to this industry."

Current FERC Initiatives in Energy Storage

FERC accepted "storage as generation" proposals, indicating storage is not necessarily transmission. 

FERC accepted the AES Sano Pilot: demonstration of storage as regulation Docket No. ER10-660  (This project went live this week.)

FERC held a Request for Comments on Energy Storage Issues Docket No. AD10-13-000

FERC held a technical conference regarding frequency regulation in the organized wholesale power markets  Docket No. AD 10-11

Commissioner Moeller concluded by recommending that more people get involved in FERC proceedings.