My review of FERC Order 2222

This weekend I had time to review FERC Order 2222 in its entirety and I have to say, FERC really invested itself in trying to resolve/remove obstacles to allow Distributed Energy Resources (DER) to participate in RTO/ISO wholesale markets by providing grid services needed for reliability, system balancing, and other grid functions. The most interesting aspect of the order, IMO, is the extent to which FERC is requiring RTO/ISO's to cooperate, coordinate and collaborate with State regulators and Utility companies operating within their respective control areas. I view this as a very positive action. Way back in 2009, while working for ISO New England, I presented ISO-NE's vision of the Smart Grid to the NIST SGIP and highlighted areas that are in need of attention; command and control coordination/interoperability among control entities was a key requirement, in order to prepare for the Smart Grid. I'm happy to see that Order 2222 takes aim at many of these issues and a truly smart grid now has a much needed catalyst, in order 2222, to advance forward. I also want to mention that FERC invested a significant effort to review, evaluate and respond to the massive amount of comments that were received in this proceeding and IMO hit the sweet spot in the attempt to balance these concerns and comments received with the need to properly accommodate a grid in transition. Here is a high level excerpt from Order 2222 listing the items covered in the order:

In this final rule, we are requiring each RTO/ISO to propose revisions to its tariff that

(1) allow distributed energy resource aggregations to participate directly in RTO/ISO markets and establish distributed energy resource aggregators as a type of market participant;

(2) allow distributed energy resource aggregators to register distributed energy resource aggregations under one or more participation models that accommodate the physical and operational characteristics of the distributed energy resource aggregations;

(3) establish a minimum size requirement for distributed energy resource aggregations that does not exceed 100 kW;

(4) address locational requirements for distributed energy resource aggregations;

(5) address distribution factors and bidding parameters for distributed energy resource aggregations;

(6) address information and data requirements for distributed energy resource aggregations;

(7) address metering and telemetry requirements for distributed energy resource aggregations;

(8) address coordination between the RTO/ISO, the distributed energy resource aggregator, the distribution utility, and the relevant electric retail regulatory authorities;

(9) address modification to the list of resources in a distributed energy resource aggregation; and

(10) address market participation agreements for distributed energy resource aggregators.

Equally important are the "Out of Scope" Items:

Some commenters raise issues that were not addressed in the NOPR. For instance, commenters raise issues regarding how the deduction of behind-the-meter resources from reserve margin requirements affects price formation;831 impacts of subsidizing resources on functioning of RTO/ISO markets;832 capacity market mitigation policies for distributed energy resources;833 impacts on system variability and unpredictable operation due to RTO/ISO market participation of distributed energy resources;834 impacts of distributed energy resource aggregations on distribution system operations and reliability, and necessary distribution system adjustments;835 reflecting distribution system benefits associated with distributed energy resource aggregations into RTO/ISO market operation; 836 distribution system configuration issues;837 need for modernizing distribution system equipment, such as the deployment of distributed energy resource management systems (DERMS);838 privacy and cybersecurity concerns;839 data collection practices during distributed energy resource registration focused on attributes available for essential grid services, but not necessarily in support of a market product;840 differing compensation for short-duration resources to account for reduced run times in the capacity market;841 and clarification that the term electric storage resource as defined in Order No. 841 may include an aggregation of distributed electric storage resources.842
2. Commission Determination
The NOPR did not propose reforms related to these issues raised by commenters. Therefore, these issues are outside the scope of this proceeding and will not be addressed here.