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The Federal Energy Regulatory Commission has directed the California grid operator and five others to prove they are lowering market barriers for loads of combined resources from large and small energy users. The agency wants the regions to put aggregated distributed energy resources on an equal footing with traditional generation. Much of the distributed energy that is sold into the market by aggregators is from big companies, like Coca Cola and Walmart. But resources from residential rooftop solar, batteries, electric vehicles, hot water heaters, demand response, and energy efficiency are expected to soar, particularly in California. “[T]hese smaller assets should be able to join together through the power of technology and compete in our wholesale electric markets, just like the large power plant down the street,” said former FERC Chair Neil Chatterjee in early October 2020 after approval of the Commission’s Order 2222. The impact of the California Public Utilities Commission's Net Energy Metering 3.0 proposal on customer photovoltaic systems and batteries, which awaits approval, adds uncertainty in the state. Call for best practices FERC’s order to the six U.S. grid operators to submit compliance tariffs, however, worries a major aggregator, Voltus, which operates in all the US and Canadian markets. It points out the challenges of different strategies and rules, including ones on interconnection, bidding, and allowable distributed energy loads in the wholesale markets. To avoid this outcome, Voltus has asked FERC to hold a technical conference next month or in March to bring the grid operators together to develop best practices for expanding the use of flexible customer resources to lower demand at times of stress on the grid, reduce customers’ costs and help integrate renewables. The aim is to keep grid operators “from going off in separate directions or off the rails,” said Jon Wellinghoff, Voltus chief regulatory officer. He is a former FERC chair who during his tenure broke new ground by pushing to ease the use of DER in markets across the country. In September 2020, FERC approved Order 2222 to open grid operators’ capacity, energy and ancillary services markets to new sources of energy and grid services. The agency directed the grid operators to file tariffs that establish distributed energy as a full-fledged market player. An unusual request Voltus’ request for a technical conference is “a bit unusual,” Wellinghoff said because it’s being sought after the issuance of the order, but before implementation. Most technical workshops are held prior to the approval of pending orders. But the system operators' plans are “unbaked so we think it would make sense to get everyone together and to talk about best practices,” Wellinghoff said. That would help inform the Commission and grid operators on what regions have in common and how they differ. The California Independent System Operator is one of the more progressive grid managers on the DER front. Distributed behind and in front of the meter resources are “an integral part of a successful energy mix and decarbonization effort,” Angelina Galetiva, CAISO board president, told Current. Voltus wants CAISO to show others how it is widening its market gates for distributed resources. The aggregator along with Advanced Energy Economics , a national association of businesses working to advance 100% clean energy, and the Sustainable FERC Project , a coalition of environmental and nonprofit organizations pushing for a green grid, applaud CAISO allowing aggregations to connect via its 26 “sub Load Aggregation Points.” Each serves about 1 gigawatt of load. “This is significantly larger aggregation than some of the proposals being made by other ISOs,” said Kerinia Cusick, a Voltus consultant. The three also appreciate the grid operator requiring the distribution utilities to review an application for a new aggregation within 30 days, in place of the current 60-day requirement. However, they object to what they say are “unreasonable restrictions” by the California grid operator on the participation of demand response in the market. That includes limits on participating as Resource Adequacy and challenges with the baseline calculations that will restrict frequently dispatched assets, according to Cusick. FERC instructed the six operators under its jurisdiction to include the minimum size of aggregated load from various resources, bidding parameters, location, metering and telemetry requirements, and to detail how the grid operator, aggregator, utility and the utility regulatory agency will coordinate. CAISO and New York ISO submitted their tariff proposals last July. FERC staff found them both deficient. PJM and ISO-New England will submit their plans next month, with those of Midwestern ISO and Southwest Power Pool due in April. FERC is expected to respond in early February to the request for a technical conference.

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