From S&P Global:

FERC’s Order 2222, issued in September 2020, has already started to shift the discussion around distributed energy resources, or DERs, in important ways, said independent energy analyst Lorenzo Kristov during a virtual event hosted by the R Street Institute.

Aggregators positioned to benefit from the regulation could include any company offering load management services to consumers, said R Street Associate Fellow Chris Villarreal, who cited leading rooftop solar and residential battery installer Sunrun Inc. as one example.

Unlike FERC’s landmark demand response rule, Order 2222 did not include a broad opt-out provision for states. However, the order did include a minor exemption for smaller utilities that distributed 4 million MWhs or less in the previous fiscal year.

While RTOs and ISOs have largely been tasked with crafting their own rules to comply with the rule, Villarreal maintained that state regulators also have a crucial role to play given that the order requires grid operators to work with states to agree on the data requirements necessary for DER aggregations to safely participate in wholesale markets.

“Especially in the Midwest, which has limited experience with retail choice or figuring out these information flows between nonutility providers, there’s a lot of education and work that needs to take place with the state commissions,” Villarreal said.

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