AEMA applauds the New England Independent System Operator (ISO-NE) and the New England Power Pool (NEPOOL) for committing significant time and resources to developing rules guiding the participation of distributed energy resource aggregations (DERAs). Unfortunately, the resulting rules will do little, if anything, to remove barriers to participation by DERAs in the ISO-NE market and therefore they fail to meet the objective of Federal Energy Regulatory Commission (FERC) Order No. 2222.
The result, sadly, was that every distributed energy resource (DER) provider currently active in ISO-NE voted against the signature proposal whose sole purpose is to promote Distributed Energy Resources.
Although ISO-NE’s proposal includes seven participation models and appears to provide a wide array of choices, none of the proposed models resolve underlying metering challenges or provide a viable sub-metering option. This creates an unjust and unreasonable barrier that will prevent the vast majority of DERs located behind customer meters from accessing the wholesale market.
Sub-metering of distributed energy resources is effectively prohibited in ISO-NE’s proposal because it has been left to the discretion of the applicable distribution utility. Distribution utilities have been clear that they cannot enable this option, explaining that participation of DERs, unlike many other traditional resources, requires metering configurations that do not currently exist, are not prevalent, or may not be compatible with the current utility metering and billing procedures and systems. According to the utilities, modifying their systems to accommodate the new meter configurations would require a great deal of time and financial outlay.
As a result, DERs behind the customer meter will have to be metered at the retail delivery point under ISO-NE’s proposal, which, for most small DERs, will be impractical (DER performance may be difficult to parse out when mixed in with customer load), cost prohibitive (for example, a customer may need to install a dedicated service line to separate billing meters), and/or infeasible (when and if distribution utilities install advanced metering, that metering is unlikely to be of the granularity and quality required for wholesale market participation). The result will be weak market participation, at best, from the behind the meter DERs—such as residential batteries, EV charging stations, and smart thermostats—that are expected to proliferate in the coming years. Ignoring this important and growing segment of the industry is not compliant with FERC’s direction in Order 2222 and, more importantly, will lead to missed benefits in terms of market efficiency and reliability.
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AEMA advocates for policies that empower and compensate customers appropriately–to contribute energy or energy-related services or to manage their energy usage–in a manner which contributes to a more efficient, cost-effective, resilient, reliable, and environmentally sustainable grid. Our members are providers and consumers of distributed energy resources, including demand response and advanced energy management, united to overcome barriers to nationwide use of demand-side resources. AEMA was engaged in this rulemaking process since FERC opened the process for distributed energy as separate from energy storage, filing Post-Technical Conference comments in June 2018 on DER participation and Supplemental Comments in March 2019 noting recently successful distributed energy resource projects and programs. AEMA has worked through ISO stakeholder processes to encourage development of distributed energy resource participation but has also worked with state regulators and utilities to develop solutions through retail and state markets. Our members believe that customer-sited resources should be valued for the benefits they bring to the grid and that more competition and choice for customers enhances those benefits for all resources on the grid. This statement reflects the opinion of AEMA as an organization, not that of any individual member company.
For questions, please contact Katherine Hamilton, katherine@aem-alliance.org, 202-524-8832