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Federal Register / Vol. 86, No. 59 / Tuesday, March 30, 2021 / Rules and Regulations Regardless of the approach, as explained in Order No. 2222, the Commission will evaluate each RTOs/ISOs compliance proposal to determine whether it meets the goals of Order No. 2222 to allow distributed energy resources to provide all services that they are technically capable of providing through aggregation.142
54. To the extent that AEE/AEMA are concerned that RTOs/ISOs will exclude demand response from participating in distributed energy resource aggregations, we note that, in Order No.
2222, the Commission clarified that customer sites capable of demand reduction may meet the definition of a distributed energy resource.143 In addition, in Order No. 2222, the Commission required each RTO/ISO to revise its tariff to allow different types of distributed energy resource technologies to participate in a single distributed energy resource aggregation i.e., allow heterogeneous distributed energy resource aggregations.144 The Commission found that, while ISONE
would prefer to exclude demand response resources from distributed energy resource aggregations to simplify settlement and the allocation of charges and credits to load, the benefits of requiring that RTOs/ISOs allow heterogeneous aggregations outweigh ISONEs preference to limit the types of resources that can participate in aggregations.145

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2. Double Counting 55. In Order No. 2222, the Commission required each RTO/ISO to revise its tariff to: 1 Allow distributed energy resources that participate in one or more retail programs to participate in its wholesale markets; 2 allow distributed energy resources to provide multiple wholesale services; and 3
include any appropriate restrictions on the distributed energy resources participation in RTO/ISO markets through distributed energy resource aggregations, if narrowly designed to avoid counting more than once the services provided by distributed energy resources in RTO/ISO markets.146
56. The Commission stated that it is appropriate for RTOs/ISOs to place narrowly designed restrictions on the RTO/ISO market participation of distributed energy resources through aggregations, if necessary to prevent double counting of services.147 The 142 Id.
143 Id.

P 115 citing AEE Comments RM1623 at
21.
P 142.
PP 14243, 145.
146 Id. P 160.
147 Id. P 161.

Commission stated that, for instance, if a distributed energy resource is offered into an RTO/ISO market and is not added back to a utilitys or other load serving entitys load profile, then that resource will be double counted as both load reduction and a supply resource.
The Commission further stated that, if a distributed energy resource is registered to provide the same service twice in an RTO/ISO market e.g., as part of multiple distributed energy resource aggregations, as part of a distributed energy resource aggregation and a standalone demand response resource, and/or a standalone distributed energy resource, then that resource would also be double counted and double compensated if it clears the market as part of both market participants. The Commission therefore found that it is appropriate for RTOs/ISOs to place restrictions on the RTO/ISO market participation of distributed energy resources through aggregations after determining whether a distributed energy resource that is proposing to participate in a distributed energy resource aggregation is: 1 Registered to provide the same services either individually or as part of another RTO/
ISO market participant; or 2 included in a retail program to reduce a utilitys or other load serving entitys obligations to purchase services from the RTO/ISO
market.
a. Request for Clarification or Rehearing 57. AEE/AEMA request clarification, or in the alternative rehearing, of the Commissions findings regarding allowing RTOs/ISOs to limit the participation of resources in RTO/ISO
markets through a distributed energy resource aggregator that are receiving compensation for the same services as part of another program.148
58. AEE/AEMA request clarification that RTOs/ISOs do not need to place restrictions on wholesale market participation by a distributed energy resource participating in a retail program if the RTO/ISO has mechanisms in place to prohibit the same distributed energy resource from both reducing the amount of a service the RTO/ISO procures on a forward basis and acting as a provider of that service in the same delivery period.149
AEE/AEMA argue that placing broad restrictions on distributed energy resources that are included in a retail program to reduce a utilitys or other load serving entitys obligations to purchase services from the RTO/ISO

144 Id.
145 Id.

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148 AEE/AEMA

Request for Rehearing at 24.
at 23, 89, 12 quoting Order No. 2222, 172 FERC 61,247 at P 161.
149 Id.

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market, could undermine the Commissions directive to allow dual participation.150
59. AEE/AEMA explain that, for reliability and system planning purposes, the same distributed energy resource should not reduce the amount of a service that an RTO/ISO procures on a forward-looking basis in a certain time period, while also acting as a provider of that same service in that delivery period.151 AEE/AEMA state that the Commission appeared to be concerned with that possibility when it stated that if a distributed energy resource is offered into an RTO/ISO
market and is not added back to a utilitys or other load serving entitys load profile, then that resource will be double counted as both load reduction and a supply resource. 152 According to AEE/AEMA, some RTOs/ISOs, such as New York Independent System Operator, Inc. NYISO and ISO New England Inc. ISONE, already have instructive mechanisms in place to avoid the Commissions concern of double counting a distributed energy resource as both load reduction and a supply resource, and others could easily create mechanisms on compliance.153
AEE/AEMA state that NYISO adds back any load reductions from Special Case Resources 154 that occur during retaillevel demand response program dispatches to NYISOs future load forecast, and also applies this mechanism to its Distributed Energy Resource Participation Framework.
Importantly, AEE/AEMA maintain, NYISO places no restrictions on a distributed energy resource participating in a wholesale aggregation and a retail program.155 AEE/AEMA
state that ISONE adds back all supplyside demand response to future load forecasts; therefore, participation in a retail-level demand response program will not reduce ISONEs Installed Capacity Requirement.156
60. AEE/AEMA express concern that the Commissions language broadly referring to retail programs could be interpreted to restrict wholesale participation from any distributed energy resource that participates in a retail program where the program has 150 Id.

at 10.

151 Id.
152 Id. quoting Order No. 2222, 172 FERC
61,247 at P 161.
153 Id. at 1011.
154 NYISO defines Special Case Resources as Demand Side Resources whose Load is capable of being interrupted upon demand at the direction of the ISO, and/or Demand Side Resources that have a Local Generator . . . . NYISO, NYISO Tariffs, NYISO MST, 2.19 MST DefinitionsS 25.0.0.
155 AEE/AEMA Request for Rehearing at 1011.
156 Id. at 11.

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