The electric power system must address two unique requirements: the need to maintain a near real-time balance between generation and load, and the need to adjust generation (or load) to manage power flows through individual transmission facilities. These requirements are not new: vertically integrated utilities have been meeting them for a century as a normal part of conducting business. With restructuring, however, the services needed to meet these requirements, now called ''ancillary services'', are being more clearly defined. Ancillary services are those functions performed by the equipment and people that generate, control, and transmit electricity in support of the basic services of generating capacity, energy supply, and power delivery. The Federal Energy Regulatory Commission (FERC) has defined such services as those ''necessary to support the transmission of electric power from seller to purchaser given the obligations of control areas and transmitting utilities within those control areas to maintain reliable operations of the interconnected transmission system''. This statement recognizes the importance of ancillary services for both bulk-power reliability and support of commercial transactions. Balancing generation and load instantaneously and continuously is difficult because loads and generators are constantly fluctuating. Minute-to-minute load variability results from the random turning on and off ofmore » millions of individual loads. Longer-term variability results from predictable factors such as the daily and seasonal load patterns as well as more random events like shifting weather patterns. Generators also introduce unexpected fluctuations because they do not follow their generation schedules exactly and they trip unexpectedly due to a range of equipment failures. The output from wind generators varies with the wind. Storage technologies should be ideal suppliers of several ancillary services, including regulation, contingency reserves (spinning reserve, supplemental reserve, replacement reserve), and voltage support. These services are not free; in regions with energy markets, generators are paid to supply these services. In vertically integrated utilities (without energy markets) the utility incurs significant costs to supply these services. Supplying these services may be a significant business opportunity for emerging storage technologies. This report briefly explores the various ancillary services that may be of interest to storage. It then focuses on regulation, the most expensive ancillary service. It also examines the impact that increasing amounts of wind generation may have on regulation requirements, decreasing conventional regulation supplies, and the implications for energy storage.« less