CAL-ISO Files DER Provider Initiative with FERC
The California Independent System Operator Corporation (CAL-ISO) filed with the Federal Energy Regulatory Commission (FERC) on March 4 for approval of a new tariff (Docket No. ER16-1085) designed to encourage owners of smaller distributed energy resources (DERs) – such as rooftop solar systems – to participate in the Golden State’s energy markets.
The ISO’s current tariff does not offer a clear platform or guidance for smaller distributed energy resources “to participate effectively” in California’s energy markets, the filing said – noting that “in order for traditional supply resources to participate in the [CAL-ISO] markets, they must meet … [a] minimum size requirement of 0.5 megawatts (MW).”
The problem is that many rooftop systems are too small to meet even the 0.5 MW size prerequisite. Therefore, the ISO has proposed, “The aggregation of multiple distributed energy resources can overcome this challenge.” This, the ISO said, would offer an “initial framework” to extend market participation to DERs smaller than 0.5 MW – by enabling aggregation at the distribution system level.
CAL-ISO envisions that the framework could facilitate wholesale market participation by:
- Microgrids interconnected to distribution systems,
- Third-party aggregators operating distributed energy resources, or
- A utility distribution company operating these resources.
At the request of stakeholders, the ISO has adopted “prudent and reasonable limitations and protections, as well as proactive monitoring mechanisms,” to gain experience with initial aggregations, ensure that all aggregations are consistent with applicable rules and tariffs at both the retail and wholesale levels, ensure reliability, and guard against any adverse consequences.
Going forward, the system operator said, “As [we gain] operational experience with distributed energy resource aggregations, [we] will be able to consider future refinements and enhancements.”
CAL-ISO proposes to define a distributed energy resource as any resource with a first point of interconnection to a utility distribution company or a metered subsystem. This broad definition encompasses multiple types of resources within the CAL-ISO’s balancing authority area interconnected to the distribution system. Examples of distributed energy resources could include, but are not limited to, distributed generation, energy storage, and plug-in electric vehicle charging stations. These resources could be in front of or behind a customer meter. Using this broad definition will avoid the possibility of inadvertently excluding resource types from participating in an aggregation. At the same time, where appropriate, the ISO also proposes rules that will make certain distributed energy resources ineligible to participate.
The rules would bar some participation by customer-generators rated at 1 MW or greater, demand-side resources bid into the market by curtailment service providers, and demand response intended to react to grid emergencies. Generating units that are between 0.5 MW and 1 MW that elect to become participating generators will also not be eligible to be part of a distributed energy resource aggregation unless their owners/operators decide to a terminate their participating generator agreements.
DERs will be metered directly, but CAL-ISO will not directly poll meters in an aggregation, so DER scheduling coordinators must provide the ISO with settlement-quality meter data in order to receive payments.
The ISO has asked the commission to accept the tariff revisions contained in this filing within 90 days and make them effective on June 3.
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