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FERC Addresses Demand Response Opt-Out for Certain DER Aggregations

April 7, 2021
Commission takes action to break down barriers to the participation of DERs in wholesale markets.

The Federal Energy Regulatory Commission (FERC) recently took additional steps to break down barriers to the participation of distributed energy resources (DERs) in wholesale markets by ensuring that demand response resources can combine with other forms of DERs to benefit consumers, enhance competition, and promote grid reliability.

The Commission said that extending the demand response "opt-out," which forbids grid operators from accepting offers from aggregated demand response where state regulators prohibit such participation, would undermine the goals of Order No. 2222 by reducing the diversity of aggregated DERs, preventing the aggregated DER model from reaching its full potential.

The actions taken by the FERC came in an order on rehearing of the FERC's Order No. 2222, which enables DERs to participate alongside traditional resources in the regional organized wholesale markets by allowing them to aggregate to satisfy minimum size and performance requirements that they might not meet individually.

"Eliminating barriers to newer technologies including energy storage and DERs has been one of my top priorities since coming to the FERC," Chairman Glick said. "The new order will unlock the potential of DERs to benefit consumers and enhance reliability."

The revisions take effect 60 days after publication in the Federal Register.

The FERC also issued a Notice of Inquiry on the potential impacts of eliminating the ability of states to prevent demand response resources from participating in organized wholesale markets. The FERC is asking whether the circumstances relevant to this demand response opt-out have changed since the opt-out was established in Order Nos. 719 and 719-A, and what are the potential benefits or burdens of removing it. Comments are due 90 days after publication in the Federal Register, with reply comments due 30 days after that.

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