Houston Chronicle

FERC opens up grid to power aggregator­s

- By James Osborne STAFF WRITER

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.

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