1. Interconnection
If a DER is already participating in the market, it doesn’t need to convert to a state process.
If a DER is connected to distribution facilities to participate in a market, then, it falls under FERC jurisdiction.
2. a) Participation Model
Market operators can modify their existing models or establish a new model for DER Aggregations to participate.
2. b) Types Of Technologies
Order 745 requirements apply to Demand Response resources participating in an Aggregation.
2. c) Double Counting of Services
DERs participating in retail programs can participate in wholesale markets. They can provide multiple services. Grid operators can place narrowly designed restrictions such that double counting is avoided.
Paying full LMP to DERs that participate as Demand Response is not double counting.
2. d) Minimum and Maximum Size of Aggregation
The minimum size of an Aggregation is 100 kW for now.
3. Locational Requirements
The requirements for an Aggregation can be as geographically broad as technically feasible.
The grid operators must give a detailed technical explanation for the locational requirements.
4. Distribution Factors and Bidding Parameters
The bidding parameters for DER Aggregations must include operational characteristics such as response rates, ramp rates, upper and lower operating limits.
5. Information and Data Requirements
Aggregators must provide aggregate settlement data for the DER Aggregation and retail individual performance data for individual DERs for auditing purposes.
The Aggregator is the single point of contact with the grid operator, not the individual DER.
6. Metering and Telemetry System Requirements
FERC didn’t prescribe the metering and telemetry requirements. Even though the grid operators have the flexibility to propose their requirements, they must ensure that those requirements don’t pose an unnecessary and undue barrier for DERs to join an Aggregation.
Any additional metering and telemetry requirements imposed in addition to state requirements on an Aggregator must be solely to assist the market operators.
All the technical details on metering and telemetry for DER Aggregations must be included in a document.
7. Coordination between the RTO/ISO, Aggregator, Distribution Utility, and RERRA –
a) Market Rules on Coordination
The coordination requirements should not create an undue barrier to entry for DER Aggregations.
7. b) Role of Distribution Utilities
If a grid operator denies market entry for a DER, the criteria for rejection should clearly show how the DER poses a significant risk to the reliability and safety of the distribution system.
Only the distribution utility should be allowed to review the addition of DER to a DER Aggregation.
The grid operators must share any necessary information with the distribution utilities to support the distribution utility review process.
The grid operator must also share any specific information provided by the distribution utility with the Aggregator. The Aggregator must be able to answer these 2 main questions - 1) does the DER affect the safety and reliability of the distribution system? 2) is the DER resource capable of participating in an aggregation?
If a distribution utility declines to provide this information specific to a DER resource, to the Aggregator - then, FERC requires the grid operator to provide an opportunity through the stakeholder process, and if that does not work, then the dispute resolution process.
If there are unusual circumstances that could lead to additional distribution utility review time, then, FERC directed the grid operator to propose requirements to justify that additional review time.
Smaller aggregations could lead to shorter review time.
The distribution utility review process is limited to the “incremental” impacts from a DER resource’s participation in a DER Aggregation that was not studied previously.
The distribution utility can place operational limitations on an aggregation or remove a DER from an aggregation based on specific significant reliability or safety concerns that the distribution utility demonstrates to the grid operator and the aggregator.
There is no decision-making role for distribution utilities in Order 2222. They cannot create a barrier to DER Aggregation.
The grid operator’s dispute resolution process can be used to resolve disputes regarding the distribution utility review process.
7. c) Ongoing Operational Coordination
To implement this Order 2222, the grid operator is required to establish an ongoing communication protocol showing how the information flows within the grid operator and from the operator to the Aggregator and the distribution utility.
The grid operator should require the Aggregator to report any changes in the offers and distribution factors that might be due to distribution line faults or outages.
The grid operator must include in its tariff provisions for the operating day that allow the distribution utilities to override the operator dispatch of an Aggregation in the circumstance that the safety and reliability of the distribution system is threatened.
The grid operator must impose fines (non-performance penalties) to a DER Aggregation when an Aggregation does not perform because a distribution utility overrides the operator’s dispatch.
7. d) Role of RERRA
RERRAs are state regulatory authorities for the most part. For cooperatives, RERRAs are their member boards.
FERC said this is the role of the RERRAs -
1. “developing interconnection agreements and rules;
2. developing local rules to ensure distribution system safety and reliability, data sharing, and/or metering and telemetry requirements;
3. overseeing distribution utility review of distributed energy resource participation in aggregations;
4. establishing rules for multi-use applications; and
5. resolving disputes between distributed energy resource aggregators and distribution utilities over issues such as access to individual distributed energy resource data.”
FERC requires grid operators to coordinate with the distribution utilities and the RERRA so that costs and other concerns like customer privacy and cybersecurity are minimized.
8. Modifications to List of Resources in Aggregation
If an Aggregator modifies an Aggregation, it is not required to re-register or re-qualify the entire Aggregation.
The distribution utility review for an Aggregation need not be paused during the review of modifications or restudy.
The Aggregators must be able to bid an unmodified portion of their aggregation into the market.
The Aggregator must update the data on physical and operational data for the modification to an Aggregation.
FERC encouraged the grid operators to propose an abbreviated distribution utility review process as a default when the Aggregation is modified.
But, FERC also encouraged the grid operators to allow for a more through review when a modification passes a materiality threshold or meets a certain criteria.
9. Market Participation Agreements
The Aggregator is required to execute a standard Market Participant Agreement before participating in a market.
This Agreement must include an attestation that the Aggregation is compliant with the tariffs and operating processes of the distribution utilities and any rules and regulations of the RERRAs.
However, these market participation agreements should not limit the business models of the Aggregators. Because the Aggregator must comply with the grid operator rules and the attestation requirements.
FERC said except for attestation requirements and prohibition of business model limitations - FERC didn’t specify the exact terms and conditions.
10. Effective Date
The grid operator must develop a reasonable implementation date.