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Federal Register / Vol. 86, No. 59 / Tuesday, March 30, 2021 / Rules and Regulations
regulatory and market conditions and also provide the opportunity for aggregators to supplement or correct information, helping support information quality. In addition, Public Interest Organizations request clarification that any decision to deny wholesale market access to a resource should require clear and convincing evidence of a threat to distribution system reliability caused by specific changes in distributed energy resource operation as a result of wholesale market participation.
b. Commission Determination 75. We grant Public Interest Organizations requested clarification that the specific information regarding a distributed energy resource that is provided by a distribution utility to an RTO/ISO as part of the distribution utility review process should be shared with the distributed energy resource aggregator. Such information could include whether a resource: 1 Affects the safety and reliability of the distribution system; or 2 is capable of participating in an aggregation.186 We agree that this information sharing will provide the transparency sought by Public Interest Organizations and provide aggregators the opportunity to supplement or correct information as necessary. In addition, on a more general level, to the extent a distribution utility declines to provide distributed energy resources the information needed to participate in RTO/ISO
markets via an aggregation, we expect that RTOs/ISOs will provide an avenue to facilitate those resources participation, including, where appropriate, the use of the RTO/ISO
dispute resolution procedures.
76. We deny Public Interest Organizations request to clarify that wholesale market access cannot be denied without clear and convincing evidence of a threat to distribution system reliability. However, we clarify that, to the extent a distribution utility recommends removal of a distributed energy resource from an aggregation due to a reliability concern, an RTO/ISO
should not remove the resource without a showing that the resources market participation presents a threat to distribution system reliability.187 In Order No. 2222, the Commission
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186 See
Order No. 2222, 172 FERC 61,247 at P

292.
187 See id. P 297 finding that such a request for removal of a distributed energy resource from an aggregation should be based on specific significant reliability or safety concerns that the distribution utility clearly demonstrates to the RTO/ISO and distributed energy resource aggregator on a case-bycase basis.

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required that each RTO/ISO coordinate with distribution utilities to develop a distribution utility review process that is non-discriminatory and transparent 188 and that includes criteria by which the distribution utilities will determine whether a proposed distributed energy resource will pose significant risks to the reliable and safe operation of the distribution system. 189 We are thus providing each RTO/ISO with flexibility to develop review procedures and criteria appropriate for its region, and we recognize that distribution utility review is an important step to ensure that wholesale market participation does not threaten distribution system reliability.
We expect, however, that criteria proposed on compliance will require that an RTO/ISO decision to deny wholesale market access to a distributed energy resource for reliability reasons be supported by a showing that the resource presents significant risks to the reliable and safe operation of the distribution system. The Commission also suggested in Order No. 2222 that RTOs/ISOs may consider requiring a signed affidavit or other evidence from the distribution utility that a distributed energy resources participation in RTO/
ISO markets would pose a significant risk to the safe and reliable operation of the distribution system.190 Such a process would require a distribution utility to justify the removal of, or establishment of operating limits for, a resource that does not inject onto the distribution system.
3. Duplication of Interconnection Review a. Request for Clarification or Rehearing 77. Public Interest Organizations request that the Commission clarify how the distribution utility review relates to interconnection agreements and standards in order to avoid duplicative review.191 In particular, where a resource is already subject to an executed distribution network interconnection agreement, Public Interest Organizations argue that the scope of utility review of that resources inclusion in an aggregation participating in wholesale markets should be strictly limited to matters not already addressed in the interconnection agreement.
Furthermore, according to Public Interest Organizations, in order to object to a resources participation in a wholesale market aggregation, the utility 188 See
id. PP 292293.
P 292.
190 Id. P 297.
191 Public Interest Organizations Request for Rehearing at 3941.

should bear the burden of proving that the manner in which the resource will operate including the extent and timing of exports is outside the range of scenarios contemplated in its interconnection agreement.192
78. Additionally, where the utility establishes a valid reliability or safety concern associated with a resources participation in a distributed energy resource aggregation, Public Interest Organizations argue that the utility should be required to give the resource in question an opportunity to modify its interconnection agreement to address the identified concerns and enable wholesale market participation. Finally, with respect to a utilitys review of issues not addressed in an interconnection agreement, Public Interest Organizations urge the Commission to clarify its expectation that this would be a narrow range of reliability or safety concerns and to encourage the codification of such concerns into interconnection standards.193
b. Commission Determination 79. We partially grant Public Interest Organizations requested clarification to the extent that, when the Commission found that RTOs/ISOs must include potential impacts on distribution system reliability as a criterion in the distribution utility review process,194
the Commission was referring specifically to any incremental impacts from a resources participation in a distributed energy resource aggregation that were not previously considered by the distribution utility during the interconnection study process for that resource. For instance, if the original interconnection study process for a particular distributed energy resource did not consider the impacts to distribution system reliability under scenarios that would account for the resources participation in a distributed energy resource aggregation in RTO/ISO
markets, such as the impact of full generation output while associated load is at a minimum level, then that resources participation in a distributed energy resource aggregation could present previously unconsidered safety and reliability impacts to the distribution system.
80. We deny Public Interest Organizations request to encourage the codification of a distribution utilitys reliability or safety concerns into interconnection standards or to require that a distribution utility offer a
189 Id.

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192 Id.

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194 Order No. 2222, 172 FERC 61,247 at P 297.
193 Id.

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