Ancillary Services in the United States: Technical Requirements, Market Designs and Price Trends

Date Published: June 2019

Authors: Erik Ela, Robin Broder Hytowitz, Udi Helman

This EPRI Technical Update defines the types of ancillary services and discusses how they are regulated, valued, procured and compensated across markets in the United States. The paper describes differences in product definitions and requirements across ISOs, and their pricing and procurement systems. Ancillary services may be procured through bid-based auction markets, fixed tariffs, or formula-based rates, or may be supplied without payment. The authors assert that the cost for variable energy resources to supply ancillary services, by forgoing energy revenues, for instance, is usually higher than the benefits. They project that this may change in the future, and suggest further research on advanced scheduling techniques and market designs, provision of ancillary services from wind, solar and emerging technologies, and converting cost-based ancillary services to competitive services, among others.

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