Overview
The DERs Aggregation rulemaking (now FERC Docket No. RM18-9) was initiated back in 2016 and was the subject of a 2018 Technical Conference. Now, FERC has posed to the six ISOs/RTOs an identical set of data requests regarding DERs that focus primarily on how interconnection service and distribution service would be provided to DERs. The data requests illustrate an issue discussed in a recent blog post about Order No. 2003 and FERC’s decision there to: 1) eliminate the bright line between its jurisdiction and state jurisdiction over interconnection service and replace it with a blurrier jurisdictional line that is referred to as the “first-use test” or “already subject to an OATT test”; and 2) retain the bright line between its jurisdiction and state jurisdiction over interconnection service when the seller is a qualifying facility (QF) that can sell to third parties. FERC’s questions reflect how complicated this policy is to implement (particularly as a non-QF may become a QF, thus shifting jurisdiction). The questions also indicate how difficult to even determine the role, if any, ISOs and RTOs take in DER interconnections by reviewing their filed tariffs. Taking FERC’s jurisdictional policies and ISO/RTO policies on whether to participate in the DERs interconnection process and applying them to an aggregation that may be comprised of QFs, non-QFs, demand response participants, and storage DERs raises a host of questions that many ISOs, RTOs, and Distribution Owners likely have not even considered. These questions may get those conversations started.
The answers to the questions will probably reveal several interesting things about how much, or how little, any particular ISO or RTO knows about interconnection processes for DERs. Some predictions of what FERC may learn from some of its questions are made below. These are only predictions. For brevity, the data requests are not repeated here.
Question 1: FERC will first learn that about half of all ISOs/RTOs do not distinguish between small and large generators. It will learn that ISOs/RTOs vary widely in how they deal with (or largely ignore) DER interconnections. In some cases, whether an ISO/RTO is involved in the interconnection process will depend on market participation or the existence of FERC jurisdiction; in other cases, involvement will not exist other than as an affected system. FERC also will learn that ISOs/RTOs are rarely, if ever, the entities who determine whether a given distribution facility is already subject to an OATT. Indeed, ISOs/RTOs would likely lack much information about this topic, beyond the identity of customers taking wholesale distribution service.
Question 2: FERC will learn that the ISOs/RTOs do understand the first-use test does not apply to QFs. Whether they know if this fact impacts the interconnection process depends on whether the ISO/RTO has taken control of FERC-jurisdictional DER interconnections or left such interconnections to their Distribution Owners.
Question 3: FERC may learn that if a DER is seeking to participate in a market, its location behind a retail customer meter generally does not matter, but that such a DER may have to install additional metering under the ISO/RTO tariff.
Question 4: FERC should learn that existing generator interconnection procedures generally do not address distribution service because FERC adopted a policy that interconnection and delivery service be provided separately when both are provided under its jurisdiction. (FERC has in some cases permitted the two services be provided in a single agreement, if the interconnection service if also FERC-jurisdictional.) Where the state has interconnection jurisdiction, FERC would have wholesale service jurisdiction for service to the transmission system, but jurisdiction over distribution back to the DER would vary based on whether the DER’s load is retail or wholesale (i.e., storage participating in the wholesale market would have wholesale load). This bifurcated jurisdiction may not impact the study process, but will impact the agreement/tariff under which distribution service is provided.
Question 5: Generator Interconnection Agreements (GIAs) for new DERs in an aggregation likely is a topic not given much thought yet by many ISOs/RTOs. How a single GIA for an aggregation would work absent: 1) all the DERs being aggregated by one entity from the inception of entering a queue; and 2) all the DERs being subject to the same interconnection jurisdiction, is difficult to see.
Question 6: Again, these questions addresses a topic that likely few ISOs/RTOs have grappled with in the aggregation context. At best, many have dealt with some the questions about affected systems and the issue of QFs requiring a change from state-jurisdictional to FERC-jurisdictional interconnection service. Per question five, as to aggregations, the involvement of the ISO/RTO in the interconnection would depend on the ISOs/RTOs existing level of participation in any DER interconnections; and in other cases, ISO/RTO participation will depend on whether the interconnection is FERC-jurisdictional or the DER is participating in the market.
Question 7: This is another question that few ISOs/RTOs have likely considered and also demonstrates how the first-use test means that a single aggregation may have DERs subject to differing jurisdictions for interconnection service. To even answer the question, the ISO/RTO would need to be involved in DER interconnections in the first place.
Question 8: Presumably, all ISOs/RTOs know about DERs participating in their market in some detail. It will be interesting to see, however, if any ISOs/RTOs keep track of all the DERs in their footprints that are not participating in their markets. With rooftop solar, they certainly are unlikely to be tracking anything but very general estimates of MWs of all DERs. Likely, ISOs/RTOs will reveal that if a DER is not participating in their market, they would know about it only if it met a size threshold. Also, PJM probably knows information about non-participating DERs that are permitted to engage in wholesale netting under its wholesale behind the meter generation program. Of course, RTOs/ISOs may seek Distribution Owner assistance to provide an answer to this question.
Question 9: Much like Question 1, FERC will probably learn that the ISOs/RTOs have no knowledge regarding individual distribution facilities and what percentage are subject to an OATT under the first-use test. Indeed, whether any Distribution Owners (outside the California investor-owned utilities who would presumably answer100% ) could even answer this question is somewhat doubtful, as there would be no reason to track such information.
Question 10: FERC may learn that single-state ISOs/RTOs are far more likely to be engaged with the relevant state commissions as to DER interconnections. Keeping up with ever-changing interconnection procedures across multiple states (let alone unregulated utilities in their footprints) would not be particularly relevant, particularly to those ISOs/RTOs that leave all DER interconnections to the Distribution Owner.
Question 11: FERC likely will learn that ISO/RTO tariffs generally do not address wholesale distribution service rates, terms, and conditions, as the ISOs/RTOs do not have operational control or ratemaking authority over the usage of such facilities. Presumably, the CAISO will inform FERC that its FERC-jurisdictional Distribution Owners do have tariffs on file for wholesale distribution service.
