FERC Orders
Order 771 — Frequency Regulation Compensation (2011)
Definition
Required RTOs and ISOs to compensate frequency regulation providers based on actual performance — measured by accuracy and response speed — rather than solely on capacity offered, fundamentally changing the economics of providing grid-stabilization services. By rewarding fast, accurate response, the order created strong financial incentives for batteries, flywheels, and other quick-responding technologies that outperform conventional generators on speed but had previously been undercompensated. Order 771 was pivotal for the development of the U.S. grid-scale energy storage market, providing the commercial framework that made battery storage financially viable in organized wholesale markets.
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