Tesla, Google join aggregator in urging FERC to host forum on distributed energy

Technology giants Tesla Inc. and Alphabet Inc. subsidiary Google LLC are throwing their support behind a petition asking the Federal Energy Regulatory Commission to convene a technical conference to clarify certain issues with the implementation of the agency's landmark order on aggregations of distributed energy resources.

The Dec. 22, 2021, petition was filed by Voltus Inc., a leading distributed energy resource, or DER, aggregator that operates in all nine North American wholesale power markets.

At that time, FERC-jurisdictional regional grid operators had already been at work developing plans for implementing Order 2222, a sweeping September 2020 rule aimed at clearing market barriers to aggregations of small-scale generators such as rooftop solar arrays, residential batteries and electric vehicles.

Such aggregations can help speed the U.S. transition to a cleaner electricity system by participating in wholesale energy, capacity and ancillary services markets, according to industry experts.

Single state grid operators California ISO and New York ISO submitted Order 2222 compliance plans in June 2021, and the multistate PJM Interconnection LLC and ISO New England filed their own plans last week. The Midcontinent ISO and Southwest Power Pool Inc., which operate across even wider geographic footprints, both received extensions to submit their plans in April.

In seeking a FERC-convened technical conference, Voltus said it appreciates the considerable time and resources that the various grid operators and their stakeholders have devoted to Order 2222 implementation.

But the company argued that a technical conference is appropriate given "broad variability" across the emerging proposals.

Regional variability at issue

One central issue is that Order 2222 sets a minimum threshold of 100 kW for DER aggregations, but some grid operators have proposed restricting aggregation footprints to a single pricing node, said Allison Wannop, director of legal and regulatory affairs for Voltus.

"The size of the aggregation footprint is ultimately one of the core issues that will determine whether things like hot water heaters and smart thermostats, and really any residential-scale device, can participate in the wholesale market," Wannop, who wrote the petition, said in an interview. "Quite simply, it's a lot harder to meet 100 kW with residential-scale devices or electric vehicles if you're limited to a single node."

CAISO's proposal would allow DER aggregations to span multiple pricing nodes, but PJM's proposal would only allow aggregations to inject energy into the grid at a single node. Yet-to-be filed proposals from MISO and SPP would similarly only allow aggregations to participate in their energy markets at a single node, Wannop said.

"Stakeholders should discuss this variability with each other and before the commission," Wannop argued in the company's petition. "When a barrier exists in one market but not another, the question is whether that barrier is undue."

Tech giants weigh in

The Voltus petition drew support from a broad cross-section of market leaders in DER technology, including Tesla, Google and Sunrun Inc.

Filing as Google Nest, a business unit within Google, the company's smart home division said it is "extremely supportive" of Voltus' proposal to include discussion of metering and telemetry requirements. Google Nest argued that "onerous" proposed metering requirements — used to measure a DER's output — could create "major barriers" to the growth of DER aggregations in several markets.

Tesla, the electric vehicle company behind the Tesla Powerwall, cited "several topic areas where state electric distribution companies are leading." The company called for "a shared forum with the commission so that all stakeholders can receive information as efficiently as possible about the coordinated efforts of grid operators and states."

Sunrun, the nation's largest provider of residential solar and battery systems, sided with Voltus in urging FERC to convene a technical conference to provide further guidance on key technical issues.

"It is entirely appropriate (and helpful) for the commission to offer its early guidance on core technical and policy matters to ensure that variability among the regions does not lead to inconsistent results in access to wholesale markets and just and reasonable compensation for DERs and DER aggregators," Sunrun said.

Voltus' petition was also backed by vehicle-to-grid technology companies such as Fermata LLC and Nuvve Holding Corp.

Wannop noted that many of the commenters were still nascent startups when FERC held its last technical conference in the rulemaking proceeding in April 2018. "A lot of these companies were either small or hadn't developed their market-leading technology yet," Wannop said.

Utility trade groups push back

The American Public Power Association and National Rural Electric Cooperative Association jointly pushed back on the Voltus petition, calling it "premature" at best. The trade groups argued that variation across wholesale power markets does not serve as a basis for a technical conference, given that FERC recognized the need to accommodate regional differences in issuing Order 2222.

The Edison Electric Institute, the nation's investor-owned utility trade group, said a technical conference "could be helpful." But the conference should only be held after all of the regional grid operators submit their compliance filings, EEI said.

The ISO/RTO Council, a group representing regional grid operators, argued that FERC should wait until it has issued orders on all of the individual compliance filings.

"In no event should a technical conference be held prior to the submission of such compliance filings by all of the" grid operators, the council asserted.