FERC's opt-out provision for aggregations of demand response resources is rooted in its established policy allowing retail regulators to prohibit demand response resources from bidding into wholesale markets. In a separate order, FERC opened a proceeding to consider eliminating that opt-out provision as well.
Commissioners Danly and Christie are not on board with trimming the scope of the opt-out provision, and, in separate statements, said they would expand the opt-out provision.
FERC's orders should be of interest to a wide range of electricity market participants, including utilities, generation companies, investors in storage and other electricity resources and electricity customers.
Order No.2222 rehearing
Background
As discussed in a prior post to this blog, Order No.2222市场规则必须容留DER聚合物参与,这些规则必须解决:(1)DERs通过聚合直接参加RTO/ISO市场的资格问题;(2)DER聚合物定位需求在地理上尽可能可行RTO/ISO、DER聚合器、分发工具和相关电商零售监管机构之间的协调。
参与FERC批发市场分配系统或零售客户表后的资源联邦电力法赋予FERC跨州批发电权,而州则拥有发电配电设施以及零售销电权。2222,FERC拒绝质疑其强制实施拟议改革的权力,并拒绝允许零售管理机构授权或禁止DERs和/或DER聚合器参与RTO/ISO市场的请求(即分别选入或选出)。ferc.gov/sites/default/files/2021-03/E-1.pdf2222-A)提供几点澄清,但维护第221-A号命令的规定2222除外允许零售管理机构选择退出规定。响应重听请求,委员会排除选择退出规定DER聚合值i.e/em>,那些由不同类型资源组成,包括需求响应而非完全需求响应。
719号指令要求RTOs/ISOs允许聚合商直接向批发市场竞价客户需求响应。FERC允许零售监管局禁止零售客户需求响应由聚合商竞价进入 RTO/ISO市场 。719选出..................保证需求响应资源可与其他形式的分布式能源资源并发,有可能增强竞争并进一步FERC确保公平合理率的任务。719选出选择退出将继续适用于这些聚合物 。
Separate statements
Commissioner Christie dissented from the NOI order, stating that the "end game is to repeal or severely restrict the ‘opt-out' provisions of Order Nos.719." The dissent notes that eighteen states have chosen to use the opt-out provision, and FERC should respect those state policy decisions.
Commissioner Danly concurred. Although opposed to eliminating the opt-out provision, Commissioner Danly recognizes FERC "has the discretion to issue a Notice of Inquiry (NOI) on any topic within its purview." In the comments to be filed, Commissioner Danly is interested in evidence on whether wholesale demand response aggregation programs are providing reliability benefits commensurate with their costs. He notes that "anecdotal evidence suggests their performance during times of strain may be poor, and perhaps terrible."
Comments in response to the NOI are due 90 days after date of publication in the Federal Register, and reply comments are due 120 days after date of the NOI's publication in the Federal Register.
The new rule requires FERC-jurisdictional Regional Transmission Organizations ("RTOs") and Independent System Operators ("ISOs") to revise their tariffs to include provisions specifically aimed at allowing DER aggregators to participate in the organized wholesale markets. The rule also bars state retail regulators from prohibiting such participation, with one exception discussed herein.
FERC Chairman Chatterjee characterized the new rule as "a landmark, foundational rule that paves the way for the grid of tomorrow." Commissioner Danly, however, dissented from the rule, saying FERC is exceeding its authority in barring state retail regulators from preventing aggregator participation in wholesale markets.
FERC's rule should be of interest to a wide range of electricity market participants, including utilities, generation companies, investors in storage and other electricity resources and electricity customers.
Background
FERC first proposed to allow DER aggregators to participate in organized electricity markets as part of its proceeding to remove barriers to the participation of electric storage resources. The 2016 proposal recognized that individual DERs may be too small to participate directly in the organized wholesale electric markets on a stand-alone basis. For example, they may not meet market rules regarding the minimum size requirements to participate or have difficulty satisfying all of the operational performance requirements.
The proposed rule on storage participation would have required each RTO/ISO to allow DER aggregations, including electric storage resources, to participate directly in the wholesale electric markets under rules that best accommodate the physical and operational characteristics of the aggregation. When FERC issued its final rule on storage participation in 2018,[1] however, it found that it needed additional information before deciding what action to take regarding DER aggregation reforms. Since then, FERC has held a technical conference on the issue and accepted proposals from two RTOs for DER aggregation participation.
The new DER aggregation rule
FERC's final rule, Order No.2222 发现,当前的RTO/ISO市场规则存在阻塞,使某些DER无法参加技术上有能力自己或通过聚合参与的市场。因此FERC修改其规则,要求每个RTO/ISO修改其关税以确保其市场规则适应DER聚合的参与。
/EachRTO/ISO必须建立市场规则解决:The new rule allows a single DER to participate in both retail and wholesale programs and be compensated in each for providing distinctly different services. This raises a concern with establishing a method to identify duplicate services. To address this, FERC grants RTOs/ISOs flexibility with respect to implementing restrictions to minimize market impacts caused by the double counting of services provided by distributed energy resources in the RTO/ISO markets.
Federal-state jurisdiction
The Federal Power Act gives FERC authority over interstate wholesale sales and transmission of electricity, while the states have authority over generation and distribution facilities as well as retail sales. The participation in FERC wholesale markets of resources on the distribution system or behind a retail customer's meter raises sensitive jurisdictional issues.Some parties questioned FERC's authority to impose the proposed reforms or sought clarification of federal and state jurisdictional boundaries.
Citing prior court opinions, FERC rejects the jurisdictional challenges, finding its "authority to issue regulations pertaining to distributed energy resource aggregations stems from both the Commission's jurisdiction over the wholesale sales by distributed energy resource aggregators into RTO/ISO markets and from its jurisdiction over practices affecting wholesale rates."[2] Accordingly, FERC found that:
- Sales of electric energy by DER aggregators into an RTO/ISO market are wholesale sales subject to FERC's jurisdiction.
- RTO/ISO market rules governing sales in their markets by DER aggregators from demand resources (e.g., demand response and energy efficiency) are practices affecting wholesale rates.
FERC also clarified that:
- To the extent a DER aggregator makes sales of electric energy into RTO/ISO markets, it will be considered a public utility subject to FERC's jurisdiction
- An individual resource's participation in a DER aggregation would not cause that resource to become subject to requirements applicable to Commission-jurisdictional public utilities.
FERC declined requests to allow retail regulatory authorities or distribution utilities to either authorize or prohibit the participation of DERs and/or DER aggregators in RTO/ISO markets (i.e., to "opt in" or "opt out," respectively).FERC noted "establishing the criteria for participation in RTO/ISO markets, including with respect to resources located on the distribution system or behind the meter, is essential to the Commission's ability to fulfill its statutory responsibility to ensure that wholesale rates are just and reasonable."
Thus, a retail regulatory authority cannot broadly prohibit the participation in RTO/ISO markets of all DERs or of all DER aggregators as that would interfere with FERC's statutory obligation to ensure that wholesale electricity markets produce just and reasonable rates.[3] Retail regulatory authorities may, however, prohibit DER aggregators from bidding the demand response of retail customers into the wholesale markets. In addition, noting the potentially greater burden on small utility systems, FERC will allow an opt-in mechanism for small utilities, i.e., those that distribute less than 4 million mWh per year.
Commissioner Danly's dissent
Commissioner James Danly dissented from the final rule on two grounds. First, the Commission overstepped the extent of its jurisdiction by prohibiting retail regulators from broadly prohibiting the participation in RTO/ISO markets of all DERs, or of all DER aggregators. Commissioner Danly argued that, under the Federal Power Act, the states retain authority over the local concerns of choice of generation, siting of transmission lines, and the entirety of retail sales and distribution. FERC's jurisdiction comes into play where a specific state prohibition collides with FERC's wholesale rate jurisdiction, where FERC is "armed with principles of federal preemption and the Supremacy Clause."
Second, Commissioner Danly argued that the Commission should not encourage resource development by fiat: "If the promises of DERs are what they purport to be, the markets will encourage their development….Commission directives are unnecessary to encourage the development of economically-viable resources."
FERC's DER aggregation rule will become effective 60 days after the date of publication in the Federal Register, and each RTO/ISO must file the tariff changes needed to implement the requirements of the rule within 270 days after such publication.
[1] Electric Storage Participation in Markets Operated by Regional Transmission Organizations & Independent System Operators, Order No.841,83FR9580,162FERC SSH61127,at P78 (2018), 命令 onreh'g ,命令No841-A、84FR23902、167FERCNat'l Assn监管工具逗号vFERC 964F.3d1177Cir市/p>