On May 15, 2009, the Federal Energy Regulatory Commission (FERC) approved energy-storage-based market rules for the New York Independent System Operator (NYISO) power grid. The favorable ruling by FERC was the second such decision, following its December 2008 approval of an energy-storage-specific tariff for the Midwest ISO.

NYISO is now the first grid operator in the country both to establish FERC-approved energy-storage-based market rules and to complete the related technical implementation of software and control systems. NYISO's market rule changes are in response to FERC Order No. 890, which is intended to promote greater competition in electricity markets, strengthen the reliability of the grid, and allow so-called “non-generation” resources (which include Beacon's flywheel technology) to participate in regulation markets on a non-discriminatory basis.

In its decision to approve NYISO's tariff, FERC found “that the proposed tariff revisions to incorporate LESRs (“limited energy-storage resources”) will benefit NYISO's markets by providing them with a new source of regulation service with unique operational characteristics that enable very fast responses to regulation needs. The proposed tariff revisions further the FERC's goal of improving competition by allowing non-generating regulation service providers to participate in organized markets on comparable terms as generation resources.”