A number of recent FERC actions highlight the Commission’s growing focus on distributed energy resources (DERs). Although there is no standard definition of DERs, the term generally refers to small resources that are located on the distribution system (typically below 100kV) and are geographically decentralized. They can include generation resources such as solar and combined heat and power, and broader definitions of DER also encompass energy storage, energy efficiency, and demand response resources.
In February 2018, FERC issued a Staff Report entitled Distributed Energy Resources: Technical Considerations for the Bulk Power System. This was followed by a two-day technical conference in mid-April that focused on the participation of DER aggregations in Regional Transmission Organization and Independent System Operator markets. FERC has invited post-technical conference comments, but has separated the issues into two separate dockets. Comments on available data on DER installations and DER modeling, planning, and operational studies are to be addressed in the new docket focused on DERs. All other comments (such as those addressing DER aggregations’ participation in wholesale markets and the implications of such participation for state and local regulation) will remain in the docket FERC established when it proposed its rule on electric storage resources.
FERC also recently issued a unanimous order reaffirming an earlier declaratory order on its jurisdiction over energy efficiency resources. FERC held that it has exclusive jurisdiction over the participation of energy efficiency resources in the organized wholesale electricity markets, including the terms that establish the eligibility for such resources’ participation. It rejected the argument that this would interfere with state and local regulators’ jurisdiction to regulate retail electric service, and disagreed with the argument that “state and local restrictions on [energy efficiency resources] participation in wholesale markets is a valid exercise of state and local authority over electric retail service.” Although this decision was limited to energy efficiency resources, it could foreshadow FERC’s future interpretation of its jurisdiction over DERs more broadly.
