Order No. 2222 goes to great length explaining why DER aggregators selling power are public utilities making FERC-jurisdictional sales under FPA Section 205. FERC holds “to the extent that a distributed energy resource aggregator’s transaction in RTO/ISO markets entails the injection of electric energy onto the grid and a sale of that energy for resale in wholesale electric markets, we find that the Commission has jurisdiction over such wholesale sales.” And, “to the extent a distributed energy resource aggregator makes sales of electric energy into RTO/ISO markets, it will be considered a public utility subject to the Commission’s jurisdiction.” This holding is no surprise. FERC has said for decades that sales by DERs at wholesale are FERC-jurisdictional. (The focus of this article is DERs not subject to an exemption under FPA Section 201(f).) A decade ago the Commission stated in CPUC:
We deny SMUD’s request that the Commission clarify that distribution-level facilities and distribution-level feed-in tariffs do not implicate Commission jurisdiction. The FPA grants the Commission exclusive jurisdiction to regulate sales for resale of electric energy and transmission in interstate commerce by public utilities. The Commission’s FPA authority to regulate sales for resale of electric energy and transmission in interstate commerce by public utilities is not dependent on the location of generation or transmission facilities, but rather on the definition of, as particularly relevant here, wholesale sales contained in the FPA.
FERC states it is “only exercising jurisdiction in this final rule over the sales by distributed energy resource aggregators into the RTO/ISO markets. Hence, an individual distributed energy resource’s participation in a distributed energy resource aggregation would not cause that individual resource to become subject to requirements applicable to Commission-jurisdictional public utilities.” But, it never explains why such participants are not subject to FPA Section 205. The mystery presented is why the DER participants in an aggregation that sell FERC-jurisdictional products (i.e., largely products other than demand response) are not subject to FERC jurisdiction and regulation. An explanation would better serve the public.
Continue Reading The Great Order No. 2222 Mystery: Why Aren’t DERs that Participate in Aggregations Subject to Public Utility Requirements?