Dive Brief:
- The Federal Energy Regulatory Commission Wednesday directed the PJM Interconnection to revise many elements of its plan to open its markets to aggregations of distributed energy resources, which is set to take effect in February 2026.
- In the unanimous decision, FERC Commissioner Mark Christie warned that states and public power utilities may not be able to change their rules and regulations in time to meet the deadline.
- Although still studying the 178-page order, Enel North America appreciates FERC’s action on unlocking DER access to wholesale markets, Brian Kauffman, Enel director of PJM regulatory affairs, said in an email Thursday. “We are encouraged by FERC’s direction in asking PJM to reconsider its proposal to limit aggregations to a single node, which may stunt the growth of DERs and subsequently harm system reliability,” he said.
Dive Insight:
Various elements of PJM’s plan failed to meet requirements set in FERC’s Order 2222, which directed regional transmission organizations and independent system operators to remove barriers keeping DER aggregations from participating in wholesale markets. The aggregations could include resources such as rooftop solar, energy storage and electric vehicle chargers.
FERC on Wednesday found similar flaws in ISO New England’s compliance plan.
The commission approved PJM’s proposal to allow aggregations that are spread across pricing nodes on its system that take part in capacity and ancillary services markets. FERC, however, balked at PJM’s decision to limit aggregations to a single pricing node if they are in the grid operator’s energy market.
A pricing node is a location on the transmission system where PJM calculates a locational marginal price used for financial settlements.
While PJM determined that allowing DERs to aggregate across multiple nodes could raise operational and reliability challenges, PJM failed to show it is technically impossible for DERs to aggregate across a broader geographic area than a single node, at least for some nodes or groupings of electrical facilities, for energy market participation, FERC said.
Advanced Energy United and the Solar Energy Industries Association said in comments that PJM’s single-node proposal would “substantially limit” the ability of residential and commercial DERs to participate in wholesale markets because of the eligibility, cost and logistical constraints that could make it impossible for DER aggregators to form aggregations that meet minimum size requirements, FERC said in the decision.
Given FERC’s findings and the robust discussion on the single-node issue in the docket, Enel hopes PJM will find a solution that finds a more “appropriate balance,” such as allowing multi-nodal aggregations behind a single utility, Kauffman said.
FERC rejected calls to require PJM, which operates the grid in 13 Mid-Atlantic and Midwest states and Washington, D.C., to allow for DER aggregations sooner.
“While we recognize that earlier implementation could provide benefits for market participants, such an approach is unreasonable in this proceeding because the benefits would likely be outweighed by the complications and burdens involved for PJM and the staff of other coordinating organizations,” FERC said.
DER aggregators will be able to participate in the capacity auction for the 2026/2027 delivery year set for December, FERC said.
Christie, who objected to the ISO-NE decision, said he supported FERC’s order for PJM partly because it was unopposed by the Organization of PJM States, which represents state utility regulators.
Christie and Commissioner James Danly lamented how complex it is to comply with Order 2222.
The order contains the phrases “partially complies” and “partially compliant” 34 times, “leading to who knows how many more compliance filings resulting from today’s order and any future attempts by PJM to comply,” Christie said. “Complexity does not even begin to describe the hard spot these RTOs, states and market participants are in.”
The Public Utilities Commission of Ohio warned FERC it may not be able to meet the February 2026 start date, Christie said.
“This issue is the inevitable result of the tension that Order No. 2222 has created with jurisdictional boundaries and the burden that this process imposes on the states, public and municipal power authorities, and electric co-operatives,” he said.
