The Federal Energy Regulatory Commission (“FERC”) announced the issuance of a Final Rule, Order No. 2222, which it describes as “historic” in enabling distributed energy resource (“DER”) aggregators to compete in all regional organized wholesale electric markets. In doing so, FERC makes express reference to the recent appellate ruling on energy storage participation, Order 841, and the court’s view of an expansive federal role over activity that may interact with wholesale electric markets.
As FERC Staff observes, “DERs tend to be too small to meet the minimum size requirements to participate in the RTO/ISO markets on a stand-alone basis, and may be unable to meet certain qualification and performance requirements because of the operational constraints they may have as small resources.” The Final Rule is intended to remove barriers to participation in organized markets by requiring ISO/RTO Tariffs to address technical considerations such as locational requirements for DER aggregations, distribution factors and bidding parameters, information and data requirements, metering and telemetry requirements, and other coordination issues.
The Final Rule will not allow retail regulatory authorities to broadly prohibit DERs from participating in the regional markets. However, the Rule will allow such regulators to continue prohibitions against bidding demand response into those markets. The rule will allow prohibitions against the accepting of bids from the aggregation of customers of certain, small utilities (i.e., electric output was 4 million MWh or less in the previous year, unless permitted by the relevant retail regulator). State and local authorities remain responsible for the interconnection of individual DERs seeking to participate in DER aggregations.
Order No. 2222 takes effect 90 days after its publication in the Federal Register. ISO/RTOs must submit to FERC amendments to their tariffs consistent with the directives of the Final Rule within 270 days of the effective date.
FERC has posted its Final Rule
(Docket No. RM18-9), accompanied by a news release
, fact sheet
, and Staff presentation
For more information, please contact Jeff Genzer
, Peter Scanlon
, Derek Dyson
, and Sean Neal