CAISO’s Revised DERA Plan Complies with Order 2222, FERC Finds
CAISO's rules for DERA participation in its markets comply with Order 2222, FERC has found.
CAISO's rules for DERA participation in its markets comply with Order 2222, FERC has found. | Edison International
FERC approved CAISO’s second attempt at complying with the mandate requiring RTOs to foster participation of DER aggregations in organized markets.

FERC on Thursday approved CAISO’s second attempt at complying with Order 2222, which requires RTOs and ISOs to foster participation of distributed energy resource aggregations (DERAs) in organized markets.

Thursday’s ruling found that CAISO fully addressed the directives the commission laid out last June in its order on the ISO’s first compliance filing (ER21-2455). In that order, FERC said the ISO — as the first RTO/ISO to implement a DERA model — had already complied with “the vast majority” of Order 2222 mandates, but the commission determined its proposal came up short in a number of areas. (See CAISO Order 2222 Filing Needs Some Work, FERC Says.) 

Chief among the commission’s concerns last June was CAISO’s partial compliance with Order 2222 provisions around the role of distribution utilities in DERA market participation. 

Order 2222 requires RTO/ISO markets to accept bids from a DERA if the aggregation includes resources that are customers of utilities that distributed more than 4 million MWh in the previous fiscal year. But it prohibits grid operators from accepting bids from an aggregation that includes resources that are customers of smaller utilities without the approval of the relevant electric retail regulatory authority.

Thursday’s ruling found that the ISO’s revised proposal had complied with FERC’s directives to:

  • specify the criteria utilities must use to determine whether each DER is capable of participating in an aggregation;
  • develop a process in which utilities will determine that a specific DER’s participation in an aggregation “will not pose significant risks to the reliable and safe operation of the distribution system;” and
  • share with utilities any “necessary information” and data collected about the individual DERs participating in an aggregation.

The commission further found that CAISO’s revised proposal met a requirement that the ISO share with a DER provider any information about a DER that a utility provides to CAISO as part of the utility review process. In approving CAISO’s related tariff revision, the commission also ruled that Pacific Gas and Electric’s protest that the rule could conflict with non-disclosure obligations between the ISO and utilities represented an “untimely request for rehearing” of FERC Order 2222-A, since PG&E “did not seek rehearing or clarification of the commission’s determination during the rehearing period of that order.” But the commission added that it acknowledged PG&E’s concern about “the appropriate protection of confidential information,” saying Order 2222-A does not preclude the use of NDAs.

“We believe that in a case where a utility distribution company declines to provide information because of confidentiality concerns, one avenue CAISO could use to facilitate participation of distributed energy resources is to encourage the distributed energy resource provider to sign a non-disclosure agreement in order to obtain the information needed to participate in the CAISO market via an aggregation,” the commission wrote.

The commission also found that CAISO’s revised proposal satisfied Order 2222’s requirement to revise its tariff to include a dispute resolution provision as part of the utility review process. Responding to a concern by PG&E, the commission clarified that the DERA dispute resolution process is not intended to supersede the existing process outlined in the ISO wholesale distribution tariff for resolving disputes related to interconnection issues — including the interconnection of DERs.

Lastly, the commission approved CAISO’s request to set the effective date for the DERA rules to no later than Nov. 1, 2024.

“As CAISO explains, ‘software enhancements required for this compliance will be highly complex, incorporating both energy injection and load curtailment into a single model that allows aggregations over a wider footprint than the majority of ISOs and RTOs have proposed,’” the commission wrote.

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