FERC Order Issued a Civil Penalty of $1,000,000 and Disgorgement of $2,877,418 to the Battery Storage Owner

Summary:

The Enforcement Order resolves FERC’s investigation under Part 1b of the Commission’s regulations, 18 C.F.R. Part 1b (2024), into whether the Sonoran Entities violated the California Independent System Operator Corporation’s (CAISO) Open Access Transmission Tariff (CAISO Tariff) or FERC regulations in connection with operating the Crimson 1 battery energy storage system (Crimson 1) (directly owned by Sonoran 1) and the Crimson 2 battery energy storage system (Crimson 2) (directly owned by Sonoran 2) (together, the Crimson Battery Project) during the period October 1, 2022 through February 17, 2023. Crimson 1 is a 200 MW (800 MWh) battery and Crimson 2 is a 150 MW (600 MWh) battery. 200 MW and 150 MW indicate the per hour technical capacities of the batteries. Each of the Sonoran Entities is directly owned by RE Crimson, LLC, which in turn is directly owned by RE Crimson Holdings, LLC. RE Crimson Holdings, LLC is a limited liability company owned directly by Axium Crimson Holdings, LLC, as majority (80%) owner, and Recurrent Energy Development Holdings, LLC, as minority (20%) owner. Recurrent is an indirect subsidiary of Canadian Solar Inc.

Additional Discussion:

• At all times, a battery has a “State of Charge,” which is a number representing the then-available stored energy of the battery.
• Under the CAISO Tariff, when a battery submits a Day-Ahead bid at 10:00 a.m., it has the option of forecasting its State of Charge at the beginning of the next operating day (i.e. midnight), which is called the battery’s “Initial State of Charge” or “Day-Ahead Initial State of Charge.”
• Allowing batteries to provide their Initial State of Charge as a bid parameter in the Day-Ahead market allows resource bids to better reflect operational conditions, which helps CAISO more precisely manage the resources participating in its markets.
• During the Relevant Period, the Sonoran Entities frequently submitted to CAISO biddable Initial State of Charge parameters that reflected a value that was other than a “forecasted starting physical position” – i.e., other than the actual state of charge the batteries were forecasted to hold at the start of the real time market.
• The Sonoran Entities submitted Initial State of Charge values indicating the batteries would be available to receive discharge awards at midnight and the early morning hours of the following day when the batteries were typically at lower charge levels that were often close to 0 MWh.
• On average, the Initial State of Charge values submitted on behalf of the Sonoran Entities on such dates were 480 MWh and 426 MWh higher.

Associated Files: Sonoran West Solar et al-Settlement Agreement