Dive Brief:

• Texas regulators on Thursday gave final, unanimous approval to an aggregated distributed energy resource pilot, or ADER, designed to harness 80 MW of flexible resources on the Electric Reliability Council of Texas grid. 
• The Public Utility Commission of Texas adopted governing documents for the program and a registration form for participants. Several of the state’s utilities have already indicated they will participate in the pilot, which is expected to run at least three years and aims to improve grid reliability and lower energy costs.
• Development of the virtual power plant will “put consumers in control of their energy future,” Commissioner Will McAdams said during Thursday’s open meeting. Regulators say they expect aggregated resources to play a growing role in the management of ERCOT’s energy system.

Dive Insight:

McAdams presided over Thursday’s PUCT meeting in the absence of Chairman Peter Lake who was on personal leave.

“I’m happy to sit in the chair with the gavel on this day,” said McAdams, who led the development of the pilot. “A massive amount of work has gone on, in a short amount of time, by some dedicated stakeholders and our staff.”

The project stems from an April memo filed by McAdams that identified nearly 3 GW of distributed generation resources on the ERCOT grid.

The project will allow thousands of small sources to contribute to grid reliability, lower energy costs and reduced emissions, energy analyst and Stoic Energy President Doug Lewin said in a tweet. “Great work by PUC on this.”

The pilot is intended to allow customers “with any combination of generation, energy storage technologies, or controllable load with the capability of 1 MW or less to participate in the ERCOT wholesale markets,” according to the ADER pilot’s governing documents.

The project will continue until the implementation of ERCOT market rules and systems are in place to “accommodate participation by ADERs” or until it is canceled. The grid operator anticipates the pilot will run at least three years “to allow for any incorporation of ERCOT system upgrades, testing of customer migration, and qualifying resources for multiple ERCOT services, as determined to be allowable while maintaining grid reliability,” the governing documents say.

Solar installers say the project will make clean energy more affordable.

The ADER project “will allow customers to share stored clean, local electrons from their home solar + battery systems to the electricity market and get compensated for these services, making these options more accessible and affordable,” Amy Heart, vice president of public policy at Sunrun, wrote after the ERCOT board approved the project.

The initial phase of the pilot program will be limited to 80 MW of total ADER capacity on the ERCOT grid, with no more than 40 MW allocated to non-spinning reserve services. But regulators say they expect that to grow and distributed resources will be an important part of maintaining reliability.

CenterPoint Energy Houston, Oncor Electric and Texas-New Mexico Power Co. have all indicated they will participate in the pilot.

Initial talks had considered a potential 10 MW limit on the pilot, noted Commissioner Jimmy Glotfelty.

“What it shows to me is that we're conservative in the way we think about how we ensure reliability in the state,” Glotfelty said.

“Learning what will enhance and improve reliability on the demand side of the reliability equation is extremely important,” Commissioner Lori Cobos said. “I think this step shows that we are continuing to push forward in leading in the United States on progressive, technical innovation market initiatives. I’m excited to see where this goes.”