INSTITUTION PROFILE / NEXT-GEN ENERGY STORAGE
Federal Energy Regulatory Commission (FERC)
The independent regulator of U.S. wholesale power markets and transmission, and of how storage takes part in them
The Federal Energy Regulatory Commission (FERC) is the independent U.S. regulator of wholesale electricity markets and interstate transmission. For storage, Order No. 841 (2018) required regional grid operators (RTOs and ISOs) to set rules for storage to take part in wholesale markets, and Order No. 2222 (2020) required them to let distributed energy resources, including home and business batteries, be pooled and sold into those markets. FERC does not set safety standards for batteries themselves: that is the territory of standards bodies such as NFPA and UL Solutions and of local fire authorities. Retail and distribution regulation belongs to state public utility commissions. This profile looks at one question only: how much influence FERC actually has over next-generation energy storage, sorted by kind of power and by date.
- FERC in 30 seconds
- What kind of body it is: the four types of influence
- What it does for energy storage
- How far its influence reaches (powers and geography)
- Organisations connected to FERC's storage work
- Outlook
- Glossary, references and claim-to-source audit
1. FERC in 30 seconds
FERC is the body that decides how storage is treated in the market, not the body that decides whether a battery is safe. Order No. 841 (issued 15 February 2018) required each regional grid operator to create a participation model for storage in its capacity, energy and ancillary-service markets, with a minimum size no larger than 100 kW Sourced. Order No. 2222 (issued 17 September 2020) lets distributed energy resources, including home and business batteries, be pooled (aggregated) and sold into the markets Sourced. Both are corrections of regional operators' market rules under section 206 of the Federal Power Act. The fire protection or siting of batteries that take part in the market is not what they address. Note also that the word "storage" in FERC's budget document refers to natural gas storage (underground facilities), which is a different matter from battery storage.
2. What kind of body it is: the four types of influence
Unlike the companies in this series, none of the institutions that appear in energy storage coverage makes batteries. What separates them is the route by which they influence the industry, and that gives four types. FERC belongs to the policy and regulation type, and in particular it sets the rules of electricity markets. It neither hands out money nor writes standards.
3. What it does for energy storage
FERC's involvement in storage can be seen in three parts: correcting the market rules of regional grid operators (Orders 841 and 2222), interconnection rules (Order 2023), and how this differs from its other powers Sourced. RTOs and ISOs (regional transmission organisations and independent system operators) run regional transmission grids and wholesale markets for capacity, energy and ancillary services.
The main final rules on storage: dates and content
| Rule | Dates (primary sources) | Content | Stage |
|---|---|---|---|
| Order No. 841 storage in markets | Issued 15 February 2018; Federal Register 6 March 2018 (83 FR 9580); effective 4 June 2018; docket RM16-23 | Defines an electric storage resource as one capable of receiving electric energy from the grid and storing it for later injection back to the grid. Each RTO/ISO must provide a participation model that (1) lets storage provide every capacity, energy and ancillary service it is technically capable of, (2) lets it be dispatched and set the market price as both seller and buyer, (3) reflects its physical and operational characteristics such as state of charge in bidding parameters or other means, and (4) sets a minimum size no larger than 100 kW. Energy bought from the market and resold must be priced at the wholesale locational marginal price. Based on section 206 of the Federal Power Act. Tariff changes were due within 270 days of Federal Register publication, with a further 365 days to implement | Sourced In effect |
| Order No. 841-A | Federal Register 23 May 2019 (84 FR 23902); effective 21 August 2019 | On rehearing and clarification, generally affirms Order No. 841 | Sourced |
| Court review | U.S. Court of Appeals for the D.C. Circuit, 10 July 2020, No. 19-1142, 964 F.3d 1177 | The National Association of Regulatory Utility Commissioners (NARUC) was petitioner and FERC respondent. We found the decision in a search for the text "Order No. 841"; we did not check its content or which rule it concerned | Not yet confirmed Content not checked |
| Order No. 2222 aggregating distributed resources | Issued 17 September 2020; Federal Register 21 October 2020 (85 FR 67094); effective 21 December 2020; docket RM18-9 | Lets distributed energy resources, meaning resources on the distribution system or behind a customer meter, including electric storage, distributed generation, demand response and electric vehicles and their equipment, be aggregated into the RTO/ISO markets. Each RTO/ISO must set participation models, a minimum size no larger than 100 kW, locational requirements, metering and coordination with distribution utilities and retail regulators. Aggregations that include customers of utilities that distributed more than 4 million MWh in the previous year must be accepted; those including customers of utilities at or below that level must not be, unless the retail regulator permits. The rule states a tariff-filing date of 17 September 2021 (we did not check each RTO/ISO's later individual dates) | Sourced In effect. We did not check regional implementation |
| Orders No. 2222-A and 2222-B | 2222-A: Federal Register 30 March 2021 (86 FR 16511), effective 1 June 2021. 2222-B: Federal Register 28 June 2021 (86 FR 33853), effective 27 August 2021 | On rehearing, set aside Order No. 2222 in part and clarified it in part | Sourced |
| Order No. 2023 interconnection | Issued 28 July 2023; Federal Register 6 September 2023 (88 FR 61014); effective 6 November 2023; docket RM22-14 | Reforms the procedures for connecting generation to the grid and clears queue backlogs. Storage-related points: several generating facilities may share one point of interconnection on one site under a single request (co-location), and interconnection studies must use operating assumptions that reflect the proposed charging behaviour of a storage resource | Sourced In effect |
| Withdrawal of an inquiry on retail demand-response aggregators | Federal Register 21 April 2026 (2026-07713) | FERC withdrew a notice of inquiry about revisiting the rules on market participation by aggregators of retail demand-response customers | Sourced |
Note: the 100 kW figure is a ceiling on the minimum size an RTO/ISO may set; the rule's wording is "does not exceed 100 kW". Federal Register dates are publication dates and differ from the Commission's issue dates. We did not check the details of the April 2026 withdrawal or later developments.
How this differs from other powers: the same word "storage", different authorities
| FERC power | What the sources say | Relevance to battery storage |
|---|---|---|
| Wholesale and transmission regulation (Federal Power Act section 201) | Applies to interstate transmission and wholesale sales of electricity. FERC has no jurisdiction over generation facilities, local distribution facilities or intrastate-only transmission, except as the law specifically provides | The market rules for batteries selling at wholesale (Orders 841 and 2222). The battery equipment itself and installations connected to distribution lie outside |
| Reliability standards (section 215) | FERC oversees the development of, and compliance with, mandatory reliability and cybersecurity standards for the bulk-power system through the North American Electric Reliability Corporation (NERC) | Standards for grid operation. Not fire or safety standards for batteries |
| Natural gas storage (Natural Gas Act) | FERC reviews proposals for underground natural gas storage and similar facilities (its budget document) | The word "storage" appears, but it is unrelated to battery storage |
| Hydropower licensing | Licensing of, and safety inspections for, non-federal hydropower projects (its budget document) | We did not check whether pumped storage falls under this |
The participation model Order 841 requires is a way of reflecting storage's physical and operational characteristics (state of charge, discharge duration, switching between charging and discharging) in market bids. Battery materials and chemistry change exactly these characteristics (how a cell degrades, its power and its efficiency), so an improvement in materials meets FERC's rules in the form of what bidding terms a battery can offer the market. FERC, however, does not set standards for battery materials or performance. It decides only how storage is treated in the market; safety and performance standards belong to standards bodies and certifiers. Order 2023's requirement to study interconnection using the charging behaviour a project proposes also changes how storage is treated in interconnection studies, which affects developers' designs.
4. How far its influence reaches (powers and geography)
| Aspect | What FERC has | What FERC does not have |
|---|---|---|
| Market rules | The power to correct RTO/ISO wholesale market rules (capacity, energy, ancillary services) so that they are just, reasonable and not unduly discriminatory (Federal Power Act section 206). It can require storage participation models, minimum sizes and aggregation of distributed resources | Deciding which regions adopt a market or when storage is built. Subsidies to individual battery developers |
| Transmission and interconnection | Rates and terms for interstate transmission, and the standard procedures for connecting generation (Order 2023) | Intrastate-only transmission and distribution (state matters). Permission to site generation equipment itself |
| Division with the states | Wholesale and transmission are federal (FERC) | Retail, distribution and installation permits belong to the states. Under Order 2222, an aggregation that includes customers of utilities at or below 4 million MWh cannot bid unless the retail regulator permits. NARUC, the association of state regulators, had urged during Order 841's comment stage that state authority not be undermined |
| Safety standards and certification | None (battery safety standards are not among the missions in FERC's budget document) | Safety and installation standards for batteries and storage systems belong to standards bodies such as NFPA, UL Solutions and IEC; whether a system may be installed rests with local authorities and fire officials who cite those standards |
| Tax and subsidies | None | Storage tax credits are for Treasury and the IRS; research, manufacturing support and loans are for DOE. FERC covers its operating costs through charges and fees on the industries it regulates |
| Geography | The United States: FERC-jurisdictional wholesale markets and interstate transmission | Grids that operate wholly within a state; other countries' markets |
| Scale | About 1,500 staff (1,474 requested for FY 2026), up to five commissioners, 13 offices | We could not find a headcount for storage work alone |
DOE (the Department of Energy) is the department within which FERC is established, but FERC is not under the supervision of other DOE officers (DOE Organization Act). The Secretary of Energy may, however, propose rules on matters within FERC's jurisdiction, and FERC must take final action on them within a reasonable time (section 403 of that Act). NERC (the North American Electric Reliability Corporation) is the electric reliability organisation certified by FERC, and it writes reliability standards for grid operation. State public utility commissions are separate bodies that regulate retail and distribution. The safety and installation of batteries belong to none of these: they belong to standards bodies and local fire rules.
5. Organisations connected to FERC's storage work
FERC's rules reach storage in a chain: FERC decides, RTOs and ISOs write the rules into their own markets, and storage operators and aggregators use them. Fig. 2 sets this chain beside the areas that are not FERC's remit (the basis for each stage is in the final rules of Chapter 3).
Organisations named in FERC's final rules (selection)
| Organisation | Relationship with FERC (sources) | Link to this series |
|---|---|---|
| RTOs / ISOs (six regional operators) | Must revise their market rules under Orders 841 and 2222. The text of Order 841 records that MISO and CAISO raised concerns about updating software to handle large numbers of small resources | The entry point for storage operators into the market |
| NARUC (National Association of Regulatory Utility Commissioners) | The association of state utility commissions. In the comments on Orders 841 and 2222 it asked that state authority not be undermined | A party to the federal-state division of powers |
| NERC (North American Electric Reliability Corporation) | The electric reliability organisation certified by FERC. FERC approves its standards and oversees compliance | Grid reliability; not battery safety standards |
| DOE (U.S. Department of Energy) | FERC is established within DOE but is independent. The Secretary of Energy may propose rules on matters within FERC's jurisdiction (42 U.S.C. 7173) | See our profile of DOE |
Note: we did not check how individual storage operators or battery makers were treated in FERC's individual orders. FERC does not endorse or certify particular companies.
6. Outlook
| What can be read from the sources | Supporting primary sources | Status |
|---|---|---|
| Order 2222's pooling of distributed resources will probably continue to be implemented region by region | The rule required market-rule filings by 17 September 2021; we did not check each RTO/ISO's implementation dates or current status | Inference |
| FERC seems, for now, not to be pressing ahead with a review on retail demand-response aggregators | The Federal Register of 21 April 2026 records the withdrawal of the notice of inquiry on market participation by retail demand-response aggregators | Inference |
| The Secretary of Energy has a route to propose rules to FERC | Section 403 of the DOE Organization Act lets the Secretary propose rules on matters within FERC's jurisdiction, and FERC must take final action within a reasonable time. We did not check any specific proposal concerning storage | Sourced (what the law says). Its use for storage is not confirmed |
| Battery safety standards will not move to FERC | FERC's missions are wholesale power, transmission, gas, oil pipelines, hydropower and reliability, and do not include battery safety. Standards belong to standards bodies | Inference |
7. Glossary
- RTO / ISO
- Regional transmission organisation / independent system operator. The body that runs a regional grid and its wholesale markets for capacity, energy and ancillary services.
- Wholesale electricity market
- A market where electricity is bought and sold for resale. Separate from sales to end customers (retail), and regulated federally.
- Participation model
- The set of rules under which one type of resource (here, storage) is bid into and settled in a market.
- Distributed energy resource (DER)
- A resource on the distribution system or behind a customer meter, including storage, distributed generation, demand response and electric vehicles (the Order 2222 definition).
- Federal Power Act section 206
- The basis of FERC's power to have unjust or unreasonable rates and rules replaced with just and reasonable ones.
- NERC
- The North American Electric Reliability Corporation, the FERC-certified body that writes reliability standards for grid operation.
8. References
- U.S. Code 42 U.S.C. § 7171 (establishment of FERC; five commissioners; five-year terms; not subject to supervision by other DOE officers). https://www.law.cornell.edu/uscode/text/42/7171
- U.S. Code 42 U.S.C. § 7173 (proposals of rules by the Secretary and the Commission; final action by FERC). https://www.law.cornell.edu/uscode/text/42/7173
- U.S. Code 16 U.S.C. § 824 (Federal Power Act section 201; the scope of jurisdiction and the division with the states). https://www.law.cornell.edu/uscode/text/16/824
- U.S. Code 16 U.S.C. § 824o (Federal Power Act section 215; reliability standards and the ERO). https://www.law.cornell.edu/uscode/text/16/824o
- FERC FY 2026 Congressional Justification (June 2025; 1,474 FTE requested, 1,539 enacted; US$520 million; full cost recovery; 13 offices; missions; natural gas storage). https://www.ferc.gov/sites/default/files/2025-06/FERC%20FY%2026%20Congressional%20Justification_6-20-2025.pdf
- Federal Register (FERC) Order No. 841: Electric Storage Participation in Markets Operated by RTOs and ISOs (83 FR 9580, 6 March 2018; issued 15 February 2018; effective 4 June 2018). https://www.federalregister.gov/documents/2018/03/06/2018-03708/electric-storage-participation-in-markets-operated-by-regional-transmission-organizations-and
- Federal Register (FERC) Order No. 841-A (84 FR 23902, 23 May 2019; effective 21 August 2019). https://www.federalregister.gov/documents/2019/05/23/2019-10742/electric-storage-participation-in-markets-operated-by-regional-transmission-organizations-and
- CourtListener Nat'l Assoc. of Regulatory Utility Commissioners v. FERC, 964 F.3d 1177 (D.C. Cir., No. 19-1142, 10 July 2020). https://www.courtlistener.com/opinion/4767139/natl-assoc-of-regulatory-v-ferc/
- Federal Register (FERC) Order No. 2222: Participation of Distributed Energy Resource Aggregations (85 FR 67094, 21 October 2020; issued 17 September 2020; effective 21 December 2020). https://www.federalregister.gov/documents/2020/10/21/2020-20973/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional
- Federal Register (FERC) Order No. 2222-A (86 FR 16511, 30 March 2021; effective 1 June 2021). https://www.federalregister.gov/documents/2021/03/30/2021-06089/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional
- Federal Register (FERC) Order No. 2222-B (86 FR 33853, 28 June 2021; effective 27 August 2021). https://www.federalregister.gov/documents/2021/06/28/2021-13442/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional
- Federal Register (FERC) Order No. 2023: Improvements to Generator Interconnection Procedures and Agreements (88 FR 61014, 6 September 2023; issued 28 July 2023; effective 6 November 2023). https://www.federalregister.gov/documents/2023/09/06/2023-16628/improvements-to-generator-interconnection-procedures-and-agreements
- Federal Register (FERC) Participation of Aggregators of Retail Demand Response Customers in Markets Operated by RTOs and ISOs (21 April 2026; withdrawal of a notice of inquiry). https://www.federalregister.gov/documents/2026/04/21/2026-07713/participation-of-aggregators-of-retail-demand-response-customers-in-markets-operated-by-regional
9. Claim-to-source audit
| Claim in the text | Status | Source |
|---|---|---|
| Establishment of FERC; five commissioners, five-year terms, no more than three from one party; not subject to supervision by other DOE officers | Sourced | Reference 1 https://www.law.cornell.edu/uscode/text/42/7171 |
| Proposals of rules by the Secretary and FERC's final action (DOE Organization Act section 403) | Sourced | Reference 2 https://www.law.cornell.edu/uscode/text/42/7173 |
| Jurisdiction over wholesale sales and interstate transmission; exclusion of generation, distribution and intrastate transmission (Federal Power Act section 201) | Sourced | Reference 3 https://www.law.cornell.edu/uscode/text/16/824 |
| Reliability standards and the ERO (Federal Power Act section 215) | Sourced | Reference 4 https://www.law.cornell.edu/uscode/text/16/824o |
| Staff of 1,474 (requested) and 1,539 (enacted), US$520 million, full cost recovery, 13 offices, missions, natural gas storage and hydropower licensing | Sourced | Reference 5 https://www.ferc.gov/sites/default/files/2025-06/FERC%20FY%2026%20Congressional%20Justification_6-20-2025.pdf |
| Order No. 841: content, dates, Federal Register citation, 100 kW, the 270-day and 365-day deadlines | Sourced | Reference 6 https://www.federalregister.gov/documents/2018/03/06/2018-03708/electric-storage-participation-in-markets-operated-by-regional-transmission-organizations-and |
| Order No. 841-A: dates and content | Sourced | Reference 7 https://www.federalregister.gov/documents/2019/05/23/2019-10742/electric-storage-participation-in-markets-operated-by-regional-transmission-organizations-and |
| The existence of the D.C. Circuit decision (No. 19-1142, 10 July 2020) | Sourced | Reference 8 https://www.courtlistener.com/opinion/4767139/natl-assoc-of-regulatory-v-ferc/ |
| Order No. 2222: content, dates, definition of DERs, 100 kW, the 4 million MWh rule, 17 September 2021 | Sourced | Reference 9 https://www.federalregister.gov/documents/2020/10/21/2020-20973/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional |
| Orders No. 2222-A and 2222-B: dates and content | Sourced | Reference 10 https://www.federalregister.gov/documents/2021/03/30/2021-06089/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional Reference 11 https://www.federalregister.gov/documents/2021/06/28/2021-13442/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional |
| Order No. 2023: dates and the storage-related changes | Sourced | Reference 12 https://www.federalregister.gov/documents/2023/09/06/2023-16628/improvements-to-generator-interconnection-procedures-and-agreements |
| Withdrawal of the inquiry on retail demand-response aggregators (21 April 2026) | Sourced | Reference 13 https://www.federalregister.gov/documents/2026/04/21/2026-07713/participation-of-aggregators-of-retail-demand-response-customers-in-markets-operated-by-regional |
| The number of RTOs/ISOs (six), the concerns of MISO and CAISO, and NARUC's comments | Sourced | Reference 6 https://www.federalregister.gov/documents/2018/03/06/2018-03708/electric-storage-participation-in-markets-operated-by-regional-transmission-organizations-and Reference 9 https://www.federalregister.gov/documents/2020/10/21/2020-20973/participation-of-distributed-energy-resource-aggregations-in-markets-operated-by-regional |
| The four-type classification and the division of roles between FERC and other bodies | Our calculation | Our own summary, based on our reading of the U.S. Code and the final rules |
| Storage-specific headcount, each RTO/ISO's implementation of Order No. 2222, and the content of the D.C. Circuit decision | Not yet confirmed | Not given in the sources (our note). Could not be confirmed and not estimated |
| The Chapter 6 outlook (implementation of Order 2222, the aggregator policy, the allocation of safety standards) | Inference | Our interpretation of the statements in References 3, 6, 9 and 13 |
Last updated: 10 October 2026 / Troy Technical
The dates and content in this article come from the U.S. Code, FERC's final rules as published in the Federal Register, and FERC's budget justification. FERC's own website was access-restricted on our check date and could not be consulted directly. Passages marked "Inference" are our own interpretation of the primary sources.