Proposal to Integrate Distributed Energy Resources in Regional Market Flawed, OPC Tells Federal Agency
BALTIMORE – The regional electric transmission operator’s proposed plan for integrating locally sourced energy technologies into the regional marketplace is too restrictive and is likely to impede the competitive development of those resources, the Office of People’s Counsel told the Federal Energy Regulatory Commission in a filing today. OPC’s comments identified changes that FERC should require of the regional operator, PJM Interconnection, LLC, to make it easier for aggregators of distributed energy resources (DERs)—such as energy storage, distributed generation, demand response, and electric vehicles and their supply equipment—to access regional power markets, OPC’s filing said.
“PJM’s proposed plan would create unnecessary barriers for distributed energy resources to participate in regional markets,” said Maryland People’s Counsel David S. Lapp. “Consumer interest in these energy technologies is increasing daily, and they are key to meeting Maryland’s climate goals. It is critical to remove barriers to their participation in regional markets.”
OPC’s filing—submitted jointly with the D.C. Office of People’s Counsel and the New Jersey Division of Rate Counsel—explained that PJM’s proposal failed to justify its proposed minimum size for participation at 100 kilowatts. That minimum size could exclude small DERs, such as residential rooftop solar. PJM’s proposed small geographic area for aggregators of DERs to participate would exclude aggregations across broader geographic areas. The smaller area also would inhibit DER market participation and appears to violate FERC’s requirement to establish standards for participation that are “as geographically broad as technically feasible.”
PJM’s proposal was submitted to comply with a FERC order, known as Order No. 2222, which intends to remove barriers to aggregators of DERs to participate in regional power markets. FERC found that existing market rules for DERs violated the law by creating barriers to DER's ability to compete in markets and ensure that rates customers pay are just and reasonable. It required regional entities, like PJM, to make compliance filings to facilitate competition by aggregators of DERs.
According to OPC’s filing, PJM’s proposal falls short because it fails to create specific requirements for coordination between DER aggregators and local utilities, creates risks that utilities can slow or impede DERs from participation, and establishes information requirements that appear unnecessary and unduly burdensome.
“FERC Order No. 2222 seeks to accelerate innovations in electric customer services, generation, and energy efficiency,” Lapp said. “Utility cooperation in that effort is essential, but PJM’s proposal fails to adequately safeguard against utilities—who compete in the same markets—from using their monopolies to impede competitive DER resources from participating in the regional market.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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