December 7, 2021

Volume XI, Number 341

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December 06, 2021

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FERC Calls For More Comments On Distributed Resource Aggregation

Taking another step toward a comprehensive policy on the participation of electric storage resources and other distributed electric resources (DERs) in wholesale markets run by independent grid operators, FERC has requested additional comments on its proposal regarding aggregating DERs and their potential effects on the bulk power system.  FERC’s request follows up on a technical conference.

Background

As reported on this blog in February, FERC approved a final rule that knocked down barriers to electricity storage resource participation in markets administered by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs).[1]  Those rules require each RTO to adopt market rules that recognize the physical and operational characteristics of electric storage resources.

FERC had also proposed to require RTOs to allow DER aggregators to participate in the  markets under rules that best accommodate the physical and operational characteristics of the aggregation.  Such rules are important because individual DERs may be too small to participate directly in the organized wholesale electric markets on a stand-alone basis.  However, FERC wanted additional information on aggregator participation before adopting rules and accordingly held a two-day technical conference in April 2018.

The call for comments

The technical conference addressed (1) the participation of DER aggregations in RTO  markets and, (2) the potential effects of DERs on the bulk power system.  FERC’s call for additional comments was issued in two notices.  Each notice generally addresses one of the two topics discussed at the conference and includes specific questions that commenters may address.

 The notice regarding participation of DER aggregations in RTO markets.  This notice requests comments on the following topics and others:

  • Economic dispatch, pricing, and settlement of DER aggregations.
  • How DER aggregations could locate across more than one pricing node.
  • Bidding parameters or other mechanisms needed to represent the physical and operational characteristics of DER aggregations.
  • Operational impact of DER aggregation on facilities regulated by state and local authorities.
  • Coordination among DERs, aggregators, RTOs and distribution utilities at the integration stage and during ongoing operations.
  • Compensation for DERs that can participate in both RTO and retail markets, including an opt-out provision to allow states to require DERs to choose participation in either the RTO market or retail compensation programs, but not both.

The notice regarding potential effects of DERs on the bulk power system.  This notice requests comments on the following topics and others:

  • Collection and availability of data on DER installations.
  • Regional DER penetration levels and potential effects of inaccurate long-term DER forecasting.
  • How DERs can support or enhance bulk power system reliability.
  • Challenges for DER developers and owners to provide DER real-time data.
  • Incorporating DERs in modeling, planning, and operations studies.

The notices were issued April 27, 2018 in separate dockets and comments are due within 60 days of issuance.


[1] For brevity, this post will use the term RTO to refer to both RTOs and ISOs.

© 2021 Covington & Burling LLPNational Law Review, Volume VIII, Number 120
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About this Author

Wilbur C. Earley, Energy attorney, Covington Burling
Energy Policy Advisor

Drawing on has over 39 years of experience in the energy industry, Bud Earley, a non-lawyer senior advisor, provides analysis and advice on a wide range of federal and state energy regulatory issues, including transaction and rate issues, regional transmission organization (RTO) tariffs and rules, interconnection, retail choice and demand response for electricity customers, a natural gas pipelines and hydroelectric facility licenses, and LNG export authorizations.

202-662-5434
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