Joint Advocates Letter to the Minnesota PUC on demand response aggregators
February 22, 2024
Via Electronic Filing
Will Seuffert
Executive Secretary
Minnesota Public Utilities Commission
121 Seventh Place East, Suite 350
St. Paul, MN 55101-2147
Re: In the Matter of a Commission Investigation into the Potential Role of Third-Party Aggregation of Retail Customers PUC Docket No. E-999/CI-22-600
Dear Mr. Seuffert:
The Advanced Energy Management Alliance, Armada Power, LLC, Clean Energy Economy Minnesota, Enerwise Global Technologies, LLC d/b/a CPower, Minnesota Large Industrial Group, RMI (founded as Rocky Mountain Institute), R Street Institute, Sunrun Inc., and Voltus, Inc. (collectively, the “ARC Advocates”) submit this letter in response to the Public Utilities Commission’s (“Commission”) decision to table Docket No. E-999/CI-22-600 on August 24, 2023. The ARC Advocates greatly appreciate the Commission’s thoughtful dialogue on the critical issue of encouraging demand response development in Minnesota. Looking forward, the ARC Advocates respectfully request that the Commission finalize its decision on whether to maintain or lift the ban on ARCs operating in Minnesota (i.e., whether to adopt Decision Option 1 or 2 in Commission Staff’s August 24, 2023 Briefing Papers). On this narrow issue, the ARC Advocates firmly believe the relevant legal analysis has been thoroughly developed in the record, thereby enabling the Commission to reach a decision. Once the Commission resolves this threshold issue, the Commission could design additional proceedings to address the remaining questions in this docket.
Although the Briefing Papers do an excellent job summarizing the parties’ positions, the ARC Advocates utilize this opportunity to further clarify any confusion in the record that may have developed during the August 24, 2023 agenda meeting. For example, concerns were raised during the Commission’s agenda meeting regarding potential impacts to Dakota Electric Association (“Dakota Electric”), which exercised its option to be rate-regulated by the Commission. By distributing less than 4 million MWh to its customers on an annual basis, Dakota Electric would not be affected by the Commission adopting Decision Option 1 or 2.[1] This fact remains unchanged since the Commission first addressed this matter in 2010. In response to the Commission’s Notice of Comment Period in 2010 addressing FERC Orders 719 and 719-A, Great River Energy (“GRE”) responded that none of its member distribution cooperatives distribute more than 4 million MWh per year.[2] As a result, “GRE and its members will not be affected unless the Commission elects to opt-in to the FERC Orders for those retail distribution customers with less than 4 million MWh per year.”[3]
After sharing a draft of this letter with Dakota Electric, Dakota Electric did not oppose the conclusion of the ARC Advocates regarding its exempt status. There should not be any dispute that Dakota Electric remains outside the purview of Decision Options 1 and 2.
Additionally, state precedent is moving towards the ARC Advocates’ position. Two Midwestern state commissions, Michigan and Missouri, recently issued orders allowing ARCs to bid demand response in wholesale electric markets for customers that meet minimum size requirements.[4] Combining these recent decisions with the legal analysis set forth in the ARC Advocates’ written submissions in this proceeding demonstrate an extensive record for the Commission to adopt Decision Option 2.
The ARC Advocates understand that, should the Commission adopt Decision Option 2, it and other stakeholders may have additional questions related to utility tariff development, certification and verification, and consumer protection. The ARC Advocates will defer to the Commission as to whether additional record development on these topics is necessary after the Commission first decides whether to adopt Decision Option 1 or 2. The ARC Advocates are, at this time, simply requesting that the Commission reconvene to address the threshold decision on whether to maintain or lift the ban on ARCs operating in Minnesota.
See the original letter below for a full list of signatories and additional supporting materials:
[1] According to EIA, Dakota Electric Association’s total retail sales in 2022 were 1,484,555 MWh. U.S. ENERGY INFORMATION ADMINISTRATION, FORM EIA-861, ANNUAL ELECTRIC POWER INDUSTRY REPORT (Oct. 5, 2023).
[2] In re Investigation of Whether the Commission Should Take Action on Demand Response Bid Directly into the MISO Markets by Aggregators of Retail Customers Under FERC Orders 719 and 719-A, PUC Docket No. E- 999/CI-09-1449, Comments of Great River Energy at 1 (Feb. 15, 2010).
[3] Id. at 6.
[4] In re Commission’s Own Motion, to Address Outstanding Issues Regarding Demand Response Aggregation for Alternative Electric Supplier Load, Michigan Public Service Commission Case No. U-20348, Order (Feb. 23, 2023); In re the Establishment of a Working Case Regarding FERC Order 222 Regarding Participation of Distributed Energy Resource Aggregators in Markets Operating by Regional Transmission Organizations and Independent System Operators, Missouri Public Service Commission File No. EW-2021-0267, Order Partially Modifying the Commission’s 2010 Order Regarding ARCs (Oct. 12, 2023).