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Federal Register / Vol. 86, No. 59 / Tuesday, March 30, 2021 / Rules and Regulations
of the AEE Declaratory Order. There the Commission found that RERRAs may not bar, restrict, or otherwise condition the participation of energy efficiency resources in wholesale electricity markets unless the Commission expressly gives RERRAs such authority. 111 Order No. 2222 expressly gives RERRAs such authority with respect to distributed energy resource aggregators that fall under the 4 million MWh threshold.112 Accordingly, if a RERRA affirmatively allows customers of utilities that distributed 4 million MWh or less in the previous fiscal year to participate in distributed energy resource aggregations, an RTO/ISO can accept bids from a distributed energy resource aggregator if its aggregation includes such customers. However, an RTO/ISO cannot accept bids from a distributed energy resource aggregator if its aggregation includes distributed energy resources that are customers of utilities that distributed 4 million MWh or less in the previous fiscal year if the RERRA does not affirmatively allow such customers to participate in distributed energy resource aggregations.
4. Distributed Energy Resource Interconnection 37. In Order No. 2222, the Commission found that a large influx of distribution-level interconnections could create uncertainty as to whether certain interconnections are subject to Commission jurisdiction or state/local jurisdiction, and whether they would require the use of an RTOs/ISOs standard interconnection procedures and agreement.113 The Commission further found that such an influx could burden RTOs/ISOs with an overwhelming volume of interconnection requests. The Commission stated that, given those concerns and the confluence of local, state, and federal authorities over distributed energy resource interconnections, the Commission 111 AEE

Declaratory Order, 161 FERC 61,245 at
P 57.
112 Order
No. 2222, 172 FERC 61,247 at P 64.
P 95. The Commission explained in detail its historical jurisdictional approach to resources interconnecting to a distribution facility.
Specifically, interconnections are governed by the applicable state or local law in the case of the first interconnection to a distribution utility for the purpose of making wholesale sales. Moreover, the Commission has jurisdiction in the case of subsequent interconnections of resources to the same distribution facility for the purpose of engaging in wholesale sales or transmission in interstate commerce. The Commission further noted that it adopted this approachlabeled the first use test in practice by some RTOs/ISOsto avoid crossing a jurisdictional line established by Congress. Id. PP 9294.

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declined to exercise its jurisdiction over the interconnections of distributed energy resources to distribution facilities for the purpose of participating in RTO/ISO markets exclusively as part of a distributed energy resource aggregation.114
38. The Commission found that requiring use of the RTOs/ISOs standard interconnection procedures and agreement terms for these interconnections was unnecessary to advance the objectives of Order Nos.
2003, 2006, and 845, which established standard interconnection procedures and agreements in order to prevent undue discrimination, preserve reliability, increase energy supply, lower wholesale prices for customers by increasing the number and types of new generation that would compete in the wholesale electricity market, reduce interconnection time and costs, and facilitate development of non-polluting alternative energy sources.115 Rather, the Commission agreed with commenters that state and local authorities, which have traditionally regulated distributed energy resource interconnections, have the requisite experience, interest, and capacity to oversee these distribution-level interconnections.
39. The Commission found that the interconnection of distributed energy resources for the purpose of participating in a distributed energy resource aggregation would not constitute a first interconnection for the purpose of making wholesale sales under the first use test.116 The Commission further clarified that only a distributed energy resource requesting interconnection to the distribution 114 Id.

PP 9697.
P 96 citing Standardization of Generator Interconnection Agreements & Procedures, Order No. 2003, 68 FR 49846 Aug. 19, 2003, 104 FERC
61,103, at P 1 2003, order on rehg, Order No.
2003A, 69 FR 15932 Mar. 26, 2004, 106 FERC
61,220, order on rehg, Order No. 2003B, 70 FR
265 Jan. 4, 2005, 109 FERC 61,287 2004, order on rehg, Order No. 2003C, 70 FR 37661 June 30, 2005, 111 FERC 61,401 2005, affd sub nom.
Natl Assn of Regul. Util. Commrs v. FERC, 475
F.3d 1277 D.C. Cir. 2007, cert. denied, 552 U.S.
1230 2008; Standardization of Small Generator Interconnection Agreements and Procedures, Order No. 2006, 70 FR 34190 June 13, 2005, 111 FERC
61,220, at P 1, order on rehg, Order No. 2006
A, 70 FR 71760 Nov. 30, 2005, 113 FERC 61,195
2005, order granting clarification, Order No. 2006
B, 71 FR 42587 July 27, 2006, 116 FERC 61,046
2006, corrected, 71 FR 53,965 Sept. 13, 2006;
Reform of Generator Interconnection Procedures and Agreements, Order No. 845, 83 FR 21342 May 9, 2018, 163 FERC 61,043 2018, errata notice, 167 FERC 61,123, order on rehg and clarification, Order No. 845A, 84 FR 8156 Mar. 6, 2019, 166
FERC 61,137, errata notice, 167 FERC 61,124, order on rehg, Order No. 845B, 168 FERC 61,092
2019.
116 Id. P 97.
115 Id.

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facility for the purpose of directly engaging in wholesale transactions i.e., not through a distributed energy resource aggregation would create a first use and any subsequent distributed energy resource interconnecting to that distribution facility for the purpose of directly engaging in wholesale transactions would be considered a Commissionjurisdictional interconnection. The Commission thus stated that it believes that this approach will minimize any increase in the number of distributionlevel interconnections subject to the Commissions jurisdiction that the final rule may cause. The Commission further stated that Order No. 2222 does not revise the Commissions jurisdictional approach to the interconnections of QFs that participate in distributed energy resource aggregations.117
a. Requests for Clarification and Clarification or Rehearing 40. AEE/AEMA request clarification, or in the alternative rehearing, of the Commissions findings with respect to the interconnection of distributed energy resources. AEE/AEMA request that the Commission clarify what it means by directly engaging in wholesale transactions, particularly in light of potential single-resource aggregations.118 AEE/AEMA also suggest that the Commission may need to clarify what happens after the triggering of first use if a distributed energy resource in an aggregation seeks to interconnect to a distribution facility for the purpose of participating in a distributed energy resource aggregation.119 According to AEE/
AEMA, the Commission is clear what happens if that resource is interconnecting for the purpose of directly engaging in wholesale transactions, but it is not clear what happens if the resource is interconnecting for the purpose of participating in a distributed energy resource aggregation.
41. Xcel requests clarification regarding the statement that the Commission is not revising its jurisdictional approach to QF
interconnection, which it asserts could be interpreted to mean either that: 1
The Commission is not changing its existing policy, and therefore any distributed energy resource which is part of an aggregation that will sell to an RTO/ISO market, and is also a QF, is subject to the Commissions jurisdiction for purposes of interconnection; or 2
117 Id.

P 98.

118 AEE/AEMA
119 Id.

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at 25.

30MRR1

Request for Rehearing at 2425.