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Federal Register / Vol. 86, No. 121 / Monday, June 28, 2021 / Rules and Regulations
fail to ensure just and reasonable rates.3
To help ensure that RTO/ISO markets produce just and reasonable rates, pursuant to the Commissions legal authority under Federal Power Act FPA section 206,4 the Commission, in Order No. 2222, modified 35.28 5 of the Commissions regulations to require each RTO/ISO to revise its tariff to ensure that its market rules facilitate the participation of distributed energy resource aggregations.6
2. More specifically, Order No. 2222
requires each RTO/ISO to revise its tariff to establish distributed energy resource aggregators as a type of market participant that can register distributed energy resource aggregations under one or more participation models in the RTO/ISO tariff that accommodate the physical and operational characteristics of each distributed energy resource aggregation.7
3. On March 18, 2021, the Commission issued Order No. 2222A, which addressed arguments raised on rehearing, set aside in part, and clarified in part the Commissions determinations in Order No. 2222.
While the Commission largely affirmed its findings in Order No. 2222, the Commission set aside the finding that the participation of demand response in distributed energy resource aggregations is subject to the opt-out and opt-in requirements of Order Nos. 719 and 719A.8 The Commission stated that if a distributed energy resource aggregation is composed solely of resources that participate as demand response resources, then the Order No.
719 opt-out would apply to that aggregation, but if a distributed energy resource aggregation contains any resources that participate as another type of distributed energy resource, then the Order No. 719 opt-out would not apply to that aggregation.9 In addition, as relevant here, the Commission provided clarification regarding restrictions to avoid double counting of services.10
4. On April 19, 2021, the Edison Electric Institute EEI; the Louisiana Public Service Commission and the 3 Order
No. 2222, 172 FERC 61,247 at P 1.
U.S.C. 824e.
5 18 CFR 35.28.
6 Order No. 2222, 172 FERC 61,247 at P 1.
7 Id. P 6.
8 Order No. 2222A, 174 FERC 61,197 at P 22;
see Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, 73 FR
64100 Oct. 28, 2008, 125 FERC 61,071, at P 155
2008, order on rehg, Order No. 719A, 74 FR
37776 July 29, 2009, 128 FERC 61,059, order on rehg, Order No. 719B, 129 FERC 61,252 2009.
9 Order No. 2222A, 174 FERC 61,197 at PP 22
23.
10 Id. PP 6364.

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Mississippi Public Service Commission together, the Southern Regulators; the National Association of Regulatory Utility Commissioners NARUC; the North Carolina Utilities Commission the North Carolina Commission; and the MISO Transmission Owners 11 filed timely requests for rehearing of Order No. 2222A. On April 19, 2021, Advanced Energy Economy and Advanced Energy Management Alliance together, AEE/AEMA filed a request for clarification, or in the alternative, rehearing of Order No. 2222A. On April 19, 2021, Voltus, Inc. Voltus filed a request for clarification of Order No. 2222A. On April 30, 2021, the Midcontinent Independent System Operator, Inc. MISO filed an answer in response to the rehearing requests. On May 4, 2021, ISO New England Inc.
ISONE filed an answer to AEE/
AEMAs request. On May 14, 2021, AEE/AEMA filed an answer in response to ISONEs answer. On May 28, 2021, AEE/AEMA filed an answer in response to the requests for rehearing and MISOs answer.12
5. Pursuant to Allegheny Defense Project v. FERC,13 the rehearing requests filed in this proceeding may be deemed denied by operation of law. However, as permitted by section 313a of the FPA,14 we modify the discussion in 11 The MISO Transmission Owners consist of Ameren Services Company, as agent for Union Electric Company d/b/a Ameren Missouri, Ameren Illinois Company d/b/a Ameren Illinois and Ameren Transmission Company of Illinois; Big Rivers Electric Corporation; Central Minnesota Municipal Power Agency; City Water, Light &
Power Springfield, IL; Cleco Power LLC;
Cooperative Energy; Dairyland Power Cooperative;
Duke Energy Business Services, LLC for Duke Energy Indiana, LLC; East Texas Electric Cooperative; Entergy Arkansas, LLC; Entergy Louisiana, LLC; Entergy Mississippi, LLC; Entergy New Orleans, LLC; Entergy Texas, Inc; Great River Energy; GridLiance Heartland LLC; Hoosier Energy Rural Electric Cooperative, Inc.; Indiana Municipal Power Agency; Indianapolis Power & Light Company; Lafayette Utilities System; MidAmerican Energy Company; Minnesota Power and its subsidiary Superior Water, L&P; Missouri River Energy Services; Montana-Dakota Utilities Co.;
Northern Indiana Public Service Company LLC;
Northern States Power Company, a Minnesota corporation, and Northern States Power Company, a Wisconsin corporation, subsidiaries of Xcel Energy Inc.; Northwestern Wisconsin Electric Company; Otter Tail Power Company; Prairie Power, Inc.; Illinois Power Cooperative; Southern Indiana Gas & Electric Company d/b/a Vectren Energy Delivery of Indiana; Southern Minnesota Municipal Power Agency; Wabash Valley Power Association, Inc.; and Wolverine Power Supply Cooperative, Inc.
12 Rule 713d1 of the Commissions Rules of Practice and Procedure, 18 CFR 385.713d1, prohibits an answer to a request for rehearing.
Accordingly, we reject ISONEs, MISOs, and AEE/
AEMAs answers.
13 964 F.3d 1 D.C. Cir. 2020 en banc.
14 16 U.S.C. 825la Until the record in a proceeding shall have been filed in a court of
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Order No. 2222A and set aside the decision, in part, and clarify in part, as discussed below.15
6. Specifically, we set aside the decision in Order No. 2222A to decline to extend the opt-out and opt-in requirements of Order Nos. 719 and 719A to demand response resources participating in heterogeneous distributed energy resource aggregations. We also provide further clarification regarding appropriate restrictions to avoid double counting of services and the compensation of demand response resources that participate in heterogeneous distributed energy resource aggregations, as discussed further below.
II. Discussion A. Order No. 719 Demand Response Opt-Out 7. In Order No. 2222, the Commission stated that the final rule does not affect the ability of relevant electric retail regulatory authorities RERRA to prohibit retail customers demand response from being bid into RTO/ISO
markets by aggregators pursuant to Order No. 719.16 The Commission also stated that, because the definition of a distributed energy resource includes demand response resources, an aggregator of demand response could participate as a distributed energy resource aggregator, but that the final rule does not affect existing demand response rules.17 The Commission further found that the participation of demand response in distributed energy resource aggregations is subject to the opt-out and opt-in requirements of Order Nos. 719 and 719A.18 The Commission therefore clarified that if the RERRA for a demand response resource has either chosen to opt out or has not opted in, then the demand response resource may not participate in a distributed energy resource aggregation.
8. In Order No. 2222A, the Commission set aside in part the Commissions conclusion that the participation of demand response in distributed energy resource aggregations is subject to the opt-out and opt-in requirements of Order Nos. 719 and appeals, as provided in subsection b, the Commission may at any time, upon reasonable notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any finding or order made or issued by it under the provisions of this chapter..
15 Allegheny Def. Project, 964 F.3d at 1617.
16 Order No. 2222, 172 FERC 61,247 at P 59
citing 18 CFR 35.28g1iii.
17 Id. P 118.
18 Id. P 145.

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