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Federal Register / Vol. 86, No. 59 / Tuesday, March 30, 2021 / Rules and Regulations
burden on RTOs/ISOs.132 Thus, due to these concerns and in recognition of the confluence of local, state, and federal authorities over QF distributed energy resource interconnections, we clarify that we decline to exercise our jurisdiction over the interconnections of distributed energy resources, including the interconnections of QFs, to distribution facilities for the purpose of participating in RTO/ISO markets exclusively as part of a distributed energy resource aggregation. We note that, if a QF distributed energy resource participates in RTO/ISO markets directly, rather than exclusively through a distributed energy resource aggregation, then the Commissions long-standing QF interconnection policies, as described earlier, would continue to apply.
48. Though Xcel and AEE/AEMA
request that the Commission hold a technical conference to consider a rulemaking to simplify the Commissions existing interconnection rules, we decline to do so here. Our clarification here that the interconnections of QFs participating in RTO/ISO markets exclusively through a distributed energy resource aggregation will be treated the same as other distributed energy resources participating in aggregations addresses the specific QF interconnection-related issues raised by Order No. 2222. The broader inquiry into interconnection issues requested by Xcel is outside the scope of this rulemaking.
B. Eligibility To Participate in RTO/ISO
Markets Through a Distributed Energy Resource Aggregation
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1. Participation Model 49. In Order No. 2222, the Commission required each RTO/ISO to establish distributed energy resource aggregators as a type of market participant and to allow distributed energy resource aggregators to register distributed energy resource aggregations under one or more participation models in the RTOs/ISOs tariff that accommodate the physical and operational characteristics of the distributed energy resource aggregation.133 The Commission stated that each RTO/ISO can comply with this requirement by modifying its existing participation models to facilitate the participation of distributed energy resource aggregations, by establishing one or more new participation models for distributed energy resource aggregations, or by adopting a
combination of those two approaches.134
a. Request for Clarification or Rehearing 50. AEE/AEMA request clarification, or in the alternative rehearing, of the Commissions findings with respect to participation models. AEE/AEMA
request that the Commission clarify the criteria by which new and existing participation models will be evaluated to ensure that they allow distributed energy resource aggregations to provide all the services they are technically capable of providing.135 AEE/AEMA
explain that a single customer site could have several technologies capable of providing market services aggregated at a single point of interconnection, such as distributed generation paired with demand response, or energy storage paired with distributed solar.136 AEE/
AEMA state that these types of configurations may appear as demand response resources, reducing the customers peak load during peak load periods, while having excess generation available other times of the year.
Moreover, AEE/AEMA state, many distributed energy resources located behind a customer meter are sought, in part, for some resiliency benefit, which assumes a design close to the host facilitys peak. AEE/AEMA argue that the tendency for RTOs/ISOs to devise two mutually exclusive participation models around generation and demand response is one of the parts of existing participation models that limits distributed energy resources from providing and commercializing their full capability in RTO/ISO markets.
Thus, AEE/AEMA request that the Commission confirm that Order No.
2222 requires that RTOs/ISOs accommodate facilities that include both generation and curtailment in a single resource in a manner that allows for participation in all markets commensurate with the resources technical capabilities.
51. AEE/AEMA assert that there is no question as to whether this can be accomplished utilizing RTOs/ISOs existing generation and demand response market constructs.137 AEE/
AEMA note that in ISONEs Active Demand Capacity Resource participation model, distributed generation resources can be co-located with load reducing resources, and the aggregate dispatch capability of the facility, up to and including net injections, is eligible for energy, 134 Id.
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b. Commission Determination 53. We deny AEE/AEMAs request to clarify the criteria by which new and existing participation models will be evaluated to ensure that they allow distributed energy resource aggregations to provide all the services that they are technically capable of providing. With regard to AEE/AEMAs concern that RTOs/ISOs may propose to achieve compliance through a collection of participation models, we reiterate that the Commission provided each RTO/
ISO with flexibility to facilitate the participation of distributed energy resource aggregations in its markets in a way that is efficient and cost-effective as well as fits its market design, including the ability to establish one or more new participation models that accommodate the physical and operational characteristics of each distributed energy resource aggregation.141
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capacity and reserve market obligations.138 Instead, AEE/AEMA state that they are requesting that the Commission confirm that RTOs/ISOs must demonstrate that existing constructs and participation models or new participation models created for distributed energy resource aggregations will accommodate distributed energy resources in these various but common configurations as a single resource.139
52. AEE/AEMA assert that their requested clarification is necessary to ensure that compliance with Order No.
2222 is not achieved through a disparate collection of participation models, with separate registration, metering, and interconnection processes and market participation parameters.140 AEE/AEMA
claim that, while technically feasible on paper, applying these separate models to individual technologies configured as a single resource would be practically impossible. AEE/AEMA further contend that requiring separate participation models for individual technologies configured as a single resource would not satisfy the Commissions directive to revise existing participation models or create new participation models, but instead would lead to several isolated paths that each impose tradeoffs on distributed energy resource aggregators.
AEE/AEMA assert that these isolated paths would not only result in reduced or sub-optimal market participation of single distributed energy resource sites with multiple technologies, but also pose substantial administrative barriers for heterogeneous aggregations.

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