FERC opens up grid to power aggregators
WASHINGTON — The Federal Energy Regulatory Commission opened the nation’s electric markets Thursday to companies that aggregate small-scale power sources like rooftop solar panels and efficiency systems that can dim lights or lower air conditioning.
Those technologies have gained traction on U.S. power grids in recent years, as costs come down and clean forms of energy become increasingly sought after. But existing federal rules on power generation have put them at a disadvantage to traditional power plants, around which the grid was designed.
“Today FERC broke new ground towards creating the grid of the future by knocking down barriers to entry for emerging technologies,” FERC Chairman Neil Chatterjee said in a statement. “This order will allow us to build a smarter, more dynamic grid that can help America keep pace with our ever-evolving energy demands.”
The commission voted 2-1 in favor of the regulatory change, with Commissioner James Danly, a former attorney to the energy sector nominated by President Donald Trump earlier this year, dissenting.
Under the order, regional grid operators must allow socalled power aggregators to register as market participants, potentially opening up a whole new industry to compete with traditional utilities.
“We’ve gone a long way to addressing some of the barriers to technologies that weren’t at the forefront of people’s minds when these market rules were made,” said Commissioner Richard Glick, a Democratic appointee, who worked with Chaterjee in designing the new rule. “It’s going to lead to furthering the transition to a clean energy future.”
The shift, which has been in the works for years and has received bipartisan support, has drawn opposition from small utilities in rural areas, who argue the logistics of managing so many power generators is too complicated.
“Increased costs and security and privacy concerns related to upgraded metering and communications infrastructure; more complicated billing and settlement processes,” the American Public Power Association
told FERC in 2018. “Many of these challenges would be particularly daunting for small utilities, which constitute the overwhelming majority of public power systems in the United States.”
To help those smaller utilities, FERC has allowed exemptions from the new rule in certain cases — something Chatterjee said would affect 16 percent of operators.
The rule change will have a less immediate effect in Texas, where the state’s largest grid operator, the Electric Reliability Council of Texas, is not subject to FERC regulations because power generated in the ERCOT system is not transmitted in interstate commerce. Shifts in the national power market ordered by FERC, however, typically effect change in Texas eventually.