Advanced Energy Perspectives

On September 18, the Federal Energy Regulatory Commission (FERC) issued Order No. 2222, a long-awaited order setting the stage for aggregations of distributed energy resources (DERs) to participate on a level playing field in the wholesale markets operated by Regional Transmission Organizations and Independent System Operators (RTOs/ISOs). Adoption of these small, flexible, customer-sited resources has proliferated across the United States, primarily driven by customer demand, technology improvement, and falling prices. However, DERs have been largely left out of U.S. wholesale power markets. FERC’s order embraces these market trends and directs RTOs/ISOs to remove market barriers and allow aggregated DERs to compete. That opens the door for new revenue streams for DER owners, new business models for DER aggregators, and new flexibility for the grid. But realizing this potential will depend on how RTOs/ISOs implement the order.