FERC Issues Landmark Order No. 2222 To Facilitate the Participation of Distributed Energy Resources in Wholesale Markets
Authors: Buck Endemann, Kimberly Frank, Elias Hinckley, and Patrick Metz
In a landmark order issued on September 17, 2020, the Federal Energy Regulatory Commission (FERC) adopted rules aimed at removing barriers to the participation of distributed energy resources (DERs) in the organized markets for electric energy, capacity, and ancillary services operated by Regional Transmission Organizations and Independent System Operators (RTOs). Order No. 2222 builds on reforms previously undertaken by FERC and, once fully implemented, should be a major step toward opening up RTO markets to competition, facilitating new entry of resources, and fostering business model innovation.
Order No. 2222 envisions “aggregations,” which are groups of small DERs participating in the RTO markets as a single resource represented by their aggregators. According to FERC, these aggregations will permit DERs to provide a variety of products and services that will compete with more conventional resources in the RTO markets. FERC expects that this will, in turn, ensure that rates remain just and reasonable.
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