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Power Gap Providers to Be Paid for Actual Power

WASHINGTON (CN) - The Federal Energy Regulatory Commission will require regional transmission organizations and independent system operators to pay energy providers for the actual amount of power they provide during frequency regulation services.

Frequency regulation service providers feed electricity into the power grid to bridge the gap between power supply and power demand at any one time. Currently, service providers are paid a net rate, which does not reflect the actual amount of power provided.

The agency found that the current method of payment under compensates service providers that can ramp up the power they supply to the grid faster than other providers, which serves as a disincentive to developing faster ramping resources.

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