California ISO wins FERC approval for program to push distributed energy

The California Independent System Operator (ISO) said June 7 that it has received federal approval for a groundbreaking framework aimed at driving distributed energy resources (DER) into the electric grid, the first of its kind in the nation.

The Federal Energy Regulatory Commission (FERC) recently approved the ISO’s innovative proposal, which will allow individual energy resources too small to participate in the wholesale market to be grouped together to meet the minimum half-megawatt (0.5 MW) threshold.

While some DERs were previously able to enter the market in limited ways, the ISO is the first grid operator in the United States to spell out a process for providers to group various distributed energy resources to reach the threshold for market participation.

“This is a step toward the re-design of the power grid,” said ISO President and CEO Steve Berberich. “We are seeing a shift from a one-way centralized system to a two-way decentralized system. This will open new market opportunities for distributed energy resource products and services, which will be instrumental to grid reliability in an emerging era of renewable power.”

Distributed energy resources, known as DERs, are defined as the resources on the customer, or distribution side of the electric meter. DERs include rooftop solar systems, plug-in electric vehicles, energy storage and demand response technology.

Ushering in more DER participation also is critical to incorporating increasing amounts of renewable energy into California’s power supply.

Distributed energy resources represent the ability for consumers to not only draw energy from the grid, but to inject electricity back on the system, California ISO said in a news release.

The ISO originally filed with FERC on March 4 for changes to its tariff to allow for aggregation of DERs. FERC actually issued its order approving the California ISO program on June 2.

The ISO is required to submit an informal report on the implementation efforts in six months, and provide annual performance reviews for the next three years.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.