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Federal Register / Vol. 86, No. 59 / Tuesday, March 30, 2021 / Rules and Regulations
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the potential to reduce a utilitys or other load serving entitys obligations to purchase services from the RTO/ISO
market.157 AEE/AEMA contend that, without clarification, the Commissions language could prohibit many, if not most, distributed energy resources from participating in both retail programs and the wholesale market, and that such restrictions are unnecessary to address the Commissions concerns over double counting.158 AEE/AEMA recommend clarification because the Commissions reference to retail programs that reduce a utilitys or other load serving entitys obligations to purchase from the RTO/
ISO market risks sweeping in a broad swath of distributed energy resources participating in long-standing retail distributed energy resource policies and programs aimed at providing benefits to customers that do not broadly implicate the Commissions double counting concerns and could result in restrictions that prevent the dual participation the Commission intended.159
61. AEE/AEMA argue that clarification is also warranted because the Commissions generic language would be unwieldy to implement in that it would force each RTO/ISO to become familiar with the specifics of every retail program in its territory.160 Furthermore, AEE/AEMA contend, this would risk further exacerbating state and RTO/ISO
tensions because the RTO/ISO would have to judge these programs regardless of the states intent. AEE/AEMA suggest that the RTOs/ISOs instead focus on their own system planning and demand forecasting practices.161
62. AEE/AEMA contend that, to the extent the Commission or RTOs/ISOs are concerned about the potential for conflicting dispatches of the same distributed energy resource in a retail program and the wholesale markets, there is significant infrastructure in place to allow for better coordination between RTOs/ISOs and distribution system operators.162 AEE/AEMA point out that there are also tools RTOs/ISOs currently use to ensure that wholesale market participation by distributed energy resources is well-coordinated with retail distributed systems. AEE/
AEMA lastly argue that providing this clarification and focusing the RTOs/
ISOs on determining whether a distributed energy resource is able to reduce the amount of a service procured on a forward basis and act as a provider 157 Id.
158 Id.

at 12.
159 Id. at 1213.
160 Id. at 10.
161 Id. at 13.
162 Id. at 14.

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of that service in the same delivery period would make sense as a legal and jurisdictional matter, given the FPAs separation of the wholesale and retail markets.163

requirements of Order No. 2222 when evaluating each RTOs/ISOs compliance filing.

b. Commission Determination 63. In Order No. 2222, the Commission required each RTO/ISO to revise its tariff to include any appropriate restrictions on 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.164 We clarify that AEE/
AEMA is correct that, when the Commission 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, 165 the Commission was indicating that, for planning purposes, double counting of services would occur if the same distributed energy resource reduces 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 same delivery period.
64. We also clarify that, to the extent an RTO/ISO already has restrictions in place to avoid double counting of services, it is not required to propose new restrictions but rather must explain on compliance how these existing restrictions prevent double counting.166
Such restrictions would only be appropriate if necessary to prevent double counting of services, 167 and each RTO/ISO must otherwise allow distributed energy resources that participate in one or more retail programs to participate in its wholesale markets. 168 Thus, such distributed energy resources should not be prevented from participating in distributed energy resource aggregations unless that is the only possible way to prevent double counting of services. We note that, while AEE/AEMA describe existing mechanisms in the NYISO and ISONE tariffs, we will not prejudge these here but instead examine whether particular mechanisms comply with the
1. Distribution Utility Review
163 Id.

at 15.
No. 2222, 172 FERC 61,247 at P 160.
165 Id. P 161.
166 Id. requiring each RTO/ISO to describe how it will properly account for the different services that distributed energy resources provide in the RTO/ISO markets.
167 Id. P 161.
168 Id. P 160.

C. Coordination 65. In Order No. 2222, the Commission required each RTO/ISO to modify its tariff to incorporate a comprehensive and non-discriminatory process for timely review by a distribution utility of the individual distributed energy resources that comprise a distributed energy resource aggregation, which is triggered by initial registration of the distributed energy resource aggregation or incremental changes to a distributed energy resource aggregation already participating in the markets.169
a. Requests for Clarification or Rehearing 66. AEE/AEMA argue that energy efficiency resources should not be included in the pre-aggregation distribution utility review process because such resources never pose a risk to reliable or safe operation of the distribution system.170 AEE/AEMA
assert that a review process that is virtually guaranteed to reach the same conclusion every time regarding the non-impact of energy efficiency resources is precisely the type of arbitrary barrier to wholesale market participation that the Commission acted to remove in Order No. 2222.171
Similarly, Public Interest Organizations also state that, for resources that do not inject power into the distribution system, there should be a presumption of no impact.172
67. Public Interest Organizations request that the Commission clarify that the distribution utility actually hosting the distributed energy resource being added to a distributed energy resource aggregation should be the only utility given an opportunity to conduct the distribution utility review.173 In addition, they request that the Commission clarify that a distribution utility should not be permitted to object to the withdrawal of a resource from a distributed energy resource aggregation, and that distribution utility review is only required when a resource joins an existing aggregation, not when a resource leaves an aggregation.174

164 Order
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169 Id.

P 292.

170 AEE/AEMA

Request for Rehearing at 2223.
at 1921.
172 Public Interest Organizations Request for Rehearing at 39.
173 Id. at 36.
174 Id. at 3637.
171 Id.

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