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Utility Dive (Opinion): Allowing DERs to Participate in Wholesale Markets Does Not Trample State and Local Authority

Posted by Jeff Dennis and Ted Thomas on May 14, 2019
Utility Dive published this opinion piece by Arkansas PSC Chairman Ted Thomas and AEE's Jeff Dennis arguing for allowing distributed energy resources to compete in wholesale markets, that others like are challenging. See excerpts below and the entire UD piece here.

Distributed energy resources (DERs) are rapidly expanding as technologies advance, their costs decline and customers demand more control over their own energy usage.

The rapid deployment of technologies like onsite renewable energy generation, battery storage, fuel cells and electric vehicles, along with enabling consumer devices and software controls, promises to bring significant benefits not only to the customers deploying them, but also for the electricity grid as a whole...

...To its great credit, the Federal Energy Regulatory Commission (FERC) has recognized these broad-ranging benefits and taken significant steps to unlock the value of DERs.

In Order No. 841, FERC required Regional Transmission Organizations and Independent System Operators (RTOs/ISOs) to adjust their market rules to allow energy storage resources, including those located on the distribution system and behind the meter, to participate in their wholesale markets and provide all of the services they are technically capable of. FERC is poised to issue a similar Final Rule requiring RTOs/ISOs to allow aggregations of DERs to participate in their markets.

Unfortunately, bureaucratic thinking about the electricity grid and the role of customers, rooted in the technologies and grid of the past, threatens to bottle up the economic and reliability benefits of greater DER adoption.

Citing jurisdictional, reliability and cost concerns, certain entities — led by the National Rural Electric Cooperative Association (NRECA) — have urged FERC to give states, co-ops, and municipal utilities broad authority to bar DERs from competing in the wholesale markets. In a letter to Chairman Neil Chatterjee, 22 U.S. Senators echoed these concerns and urged FERC to restrict DER participation to only those authorized by local authorities... recent filings with FERC regarding the pending DER aggregation rulemaking, we separately endorsed an approach to harmonizing state and federal authority that allows DER owners and operators to choose whether to participate in wholesale markets, while also allowing states to decide whether those DERs should be able to simultaneously participate in their retail programs...

Read the entire UD piece here.

Topics: AEE In The News