DER Aggregation Comments

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The DERs Aggregation rulemaking (now FERC Docket No. RM18-9) was initiated back in 2016 and was the subject of a 2018 Technical Conference. Now, FERC has posed to the six ISOs/RTOs an identical set of data requests regarding DERs that focus primarily on how interconnection service and distribution service would be provided to DERs. The data requests illustrate an issue discussed in a recent blog post about Order No. 2003 and FERC’s decision there to: 1) eliminate the bright line between its jurisdiction and state jurisdiction over interconnection service and replace it with a blurrier jurisdictional line that is referred to as the “first-use test” or “already subject to an OATT test”; and 2) retain the bright line between its jurisdiction and state jurisdiction over interconnection service when the seller is a qualifying facility (QF) that can sell to third parties. FERC’s questions reflect how complicated this policy is to implement (particularly as a non-QF may become a QF, thus shifting jurisdiction). The questions also indicate how difficult to even determine the role, if any, ISOs and RTOs take in DER interconnections by reviewing their filed tariffs. Taking FERC’s jurisdictional policies and ISO/RTO policies on whether to participate in the DERs interconnection process and applying them to an aggregation that may be comprised of QFs, non-QFs, demand response participants, and storage DERs raises a host of questions that many ISOs, RTOs, and Distribution Owners likely have not even considered. These questions may get those conversations started.

The answers to the questions will probably reveal several interesting things about how much, or how little, any particular ISO or RTO knows about interconnection processes for DERs. Some predictions of what FERC may learn from some of its questions are made below. These are only predictions. For brevity, the data requests are not repeated here.
Continue Reading FERC’s ISO/RTO DERs Data Requests – What Do They Tell Us and What Will the Answers Likely Tell FERC

Some of the more salient points raised by DER commenters that do not fall neatly into the categories of comments already summarized by this blog are identified below. Many such commenters are quite supportive of DER aggregations and thus their comments reflect similar views of the DERs/DER Aggregator comments. (E.g., Advanced Energy Buyers Group; Microsoft; Lorenzo Kristov; Public Interest Organizations). Others, however, such as the Energy Power Supply Association (EPSA) have some concerns, such as that DERs’ contributions must be valued correctly.

  • EPRI: EPRI’s comments focus heavily on the multi-nodal issue, which it thinks can be addressed with the appropriate use of distribution factors. It believes that Distribution Owners (DOs) may require greater capability to limit DER injections. EPRI supports the concept of a DER Management System, which will provide greater grid visibility. More generally, EPRI supports more research and development efforts to find operational solutions.
  • EPSA: EPSA supports FERC starting with single node aggregation because this approach is consistent with existing security constrained economic dispatch models. Market signals could become highly distorted without such a limitation in its view. Adequate metering of DERs is another EPSA concern both for reliability and accountability reasons. To the extent DERs participate in wholesale capacity markets, accountability is crucial. EPSA also is concerned with market power and subsidization issues that could arise if DOs own and operate DERs.

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Continue Reading DER Aggregation Comments – Takeaways from Other Commenters

  • The Opt-Out a Must-Have for Small (Largely Non-FERC and Non-State –Jurisdictional) DOs. The DOs with the greatest concerns about the NOPR are small, typically self-regulating utilities, as reflected in the comments of the American Public Power Association (APPA), the National Rural Electric Cooperative Association (NRECA), and the Transmission Access Policy Study Group (TAPS). All three entities support, at the very least, an opt out option for smaller DOs, if the opt-out is not granted to all state and local regulatory authorities. Some FERC-/state-jurisdictional utilities prefer an opt out (e.g., Southern Company (Southern), Xcel, and/or the small group of DOs that filed as the PJM Utilities Coalition). The concerns of the DOs seeking an opt out are many and include: rate design challenge; load forecast accuracy; operational technological and administrative challenges; incremental costs; lack of coordination with RTOs/ISOs; dispatches that would harm distribution reliability; issues with override and protection settings; and the timetable for implementing necessary controls. Many individual DOs who commented do not see a need for an opt out (e.g., Indicated NY TOs; Southern California Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San Diego Gas & Electric Company (SDG&E)). Those DOs who do not propose an opt out are located in states that are supportive of aggregation.
  • The DOs Must Be Able to Override Dispatch Directions from the RTOs/ISOs. An issue addressed by almost all DOs is which entity should ultimately determine whether a DER in an aggregation may operate – the DO or the RTO/ISO. Uniformly, DO commenters weighing in on this subject indicated that the DOs must have this authority. The Indicated NY TOs explained that if a DO has a known constraint, it must be permitted to require a DER to come offline to preserve safety and reliability. The APPA insists that DOs must have the ability to manage the reliable operation of their systems and that a transmission system can readily deal with an override of a distribution-level dispatch. NRECA explains that coordination agreements must give the DO an override authority. TAPS notes that DOs must be able to override dispatch decisions of RTOs/ISOs or require the disconnection of DERs if their dispatch would undermine local distribution reliability. EEI, Eversource, and Duquesne Light Company (Duquesne) support DO control over resources connected to their systems. Several commenters also indicate that such override authority must not result in liability to the DO.

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Continue Reading DER Aggregation Comments – Five Takeaways from the Distribution Owners (DOs)

  • Framework and Roadmap Needed Soon. Most DER commenters see no valid reasons for any significant delay in implementing DER participation through aggregation (e.g., Advanced Energy Economy (AEE), Advanced Energy Management Alliance (AEMA), Direct Energy, Energy Storage Association (ESA), NRG, Solar Energy Industries Association (SEIA), Stem, Sunrun, Tesla). Many want a framework or roadmap laid out quickly. Generally, issues they favor to be included in such guidance would include the limited need for telemetry (AEE, AEMA) and for FERC to permit multi-nodal aggregations. (Sunrun, AEE, AEMA, NRG) Microgrid Resources Coalition (MRC), however, does see a need for substantial gird architecture changes and a new control architecture.
  • There Are Legitimate Questions About State/Distribution Owner (DO) Reliability-Impact Claims. One key argument from the DER commenters is that there already are plenty of DERs operating today (e.g., under net metering, aggregated demand response) without adverse distribution system impacts and without the distribution grid knowing whether kilowatts are sold at wholesale (AEMA). Sunrun points out that many DERs are being built today without the expectation of wholesale market revenues and distribution system impacts will occur regardless of wholesale participation. Although some DER commenters acknowledge that DERs acting in an aggregated manner may have some differing impact, several express sincere doubts that reliability review is required beyond the initial interconnection (AEE). ICETEC Energy Services (ICETEC), Tesla and NRG, for example, seek to limit the ability of the DO or RTO/ISO to study or re-study DERs once interconnected simply because they are later aggregated. Stem asks, where reliability claims are made, that they be supported by factual evidence and points out that aggregations can have the same impacts on a distribution system as instructions issued to multiple resources under retail programs.

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Continue Reading DER Aggregation Comments – Five Takeaways from DER Aggregators/DERs

The takeaways from the individual state commissions and commissioner who commented must be viewed in light of the fact that four of the five sets of comments from individual states (NJBPU; CPUC; NYPSC; PA PUC Comm’r Place) are from states that have supported the integration of DERs, already have fairly high DER penetrations levels, and are located in the three ISOs that are arguably the furthest along in adopting DER aggregation policies (CAISO, PJM, and NYISO). Most of the state comments were more focused on DERs generally and not the aggregation of DERs.

  • State Commissions Should Be Participation Gatekeepers. Although the majority of state commissions that filed comments fully support DER participation in wholesale markets, when the totality of comments are considered (Indiana URC; NARUC; MISO States), the states, as a whole, generally do support an opt-in, opt-out approach to both DER aggregation and in some cases the participation of DERs directly in wholesale markets. Even some of those states that support full DER participation caveat such support: for example, the NJBPU proposes that distribution owners (DOs) review and determine participation eligibility as to reliability issues and does not support an RTO/ISO being able to override such decision. A majority of the states insist that they retain a coordination role in any DERs participation in an aggregation. As to those supporting a complete opt-out option (MISO States; NARUC; Indiana RUC), they cite to legal precedent that they believe leaves the participation decision to the states and also express concern as to entities seeking compensation from both retail and wholesale programs.

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Continue Reading DER Aggregation Comments – Five Takeaways from State Commissions

  • Slow Down/Permit Flexibility on Timing. Several of the RTOs/ISOs provide FERC reasons why it needs to slow down its desire to have DER aggregation processes in place. The reasons range from the mere time it will take to implement such processes in a well-thought out manner with the right technology (which technology may not be readily available today) (NYISO, MISO, ISO-NE) to the fact that the demand for participation through aggregation is just not there (MISO, ISO-NE). Although the CAISO already has an aggregation process in place, it is not being used, and while blame for that is debatable, this fact supports the general theme that time is not of the essence. PJM’s comments indicate that it is fairly well-prepared for DER aggregation in light of existing DER participation, but also indicate that many questions need to be answered before it and its stakeholders can implement a workable program. ISO-NE does not believe adequate tools exist yet for implementation. MISO believes DER integration and aggregation needs to be accomplished over a time period that is consistent with other reform efforts that may have a higher priority.

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Continue Reading DER Aggregation Comments – Five Takeaways from the RTOs/ISOs