Dive Brief:

• The California ISO has asked the Federal Energy Regulatory Commission to approve tariff changes to allow smaller, distributed resources to be aggregated and bid into the state's energy and ancillary service markets, RTO Insider reports. 
• CAISO said the number and types of distributed energy resources on its system are "growing and represent an increasingly important and larger part of the future resource mix," and included operational and environmental goals as benefits of the change.
• The grid operator wants regulators to lift restrictions on resources smaller than 0.5 MW participating in the markets, allowing the distributed resources to be aggregated though into larger bids.

Dive Insight:

California has been moving quickly to integrate distributed resources into its grid, and on March 4, filed tariff revisions with federal regulators to dramatically open energy markets to a wider array of small resources.

The grid operator told FERC that the ISO's tariff does "not offer a clear platform or guidance for smaller distributed energy resources to participate effectively in CAISO markets," and that the proposed tariff revisions "establish an initial framework to enable aggregations of energy resources connected to distribution systems within the CAISO’s balancing authority."

The framework will accommodate "various resource types as well as different business models provided the aggregation is capable of operating as an integrated resource and meets specific technical requirements," CAISO said.

The proposed framework would recognize distributed energy resource aggregations as a new type of market resource, similar to a generating facility, the grid operator explained. And importantly, "the proposed framework also recognizes a distributed energy resource provider as the owner or operator of the aggregation."

CAISO's Board last summer approved a draft proposal for allowing aggregators to participate in markets, setting it on a course to be the first U.S. grid operator to integrate aggregated DERs.

The operator also said its proposed rules would help ensure it can accurately model the congestion impacts of a distributed energy resource aggregation on the CAISO controlled grid.

"Distributed energy resource aggregations may consist of distributed energy resources at one pricing node or may span multiple pricing nodes," the operator said in its filing. "Each distributed energy resource aggregation will be no smaller than 0.5 MW and each distributed energy resource aggregation that includes distributed energy resources located at different pricing nodes will be no larger than 20 MW."