Advanced Energy Management asserts that telemetry requirements to
participate in a wholesale program should be driven by the RTO/ISO
system needs, which are less granular than at the distribution
level.\635\ Advanced Energy Management adds that a distributed energy
resource that only seeks participation in the wholesale market should
only be required to fulfill the RTO's/ISO's metering requirements.
Advanced Energy Economy states that RTOs/ISOs should adopt procedures
that provide for regular information and communications flows to occur
from the aggregator, to the RTO/ISO, and then to distribution
utilities.\636\
---------------------------------------------------------------------------

    \633\ APPA Comments (2018 RM18-9) at 9-10; NRECA Comments (2018
RM18-9) at 11-12, 30.
    \634\ APPA Comments (2018 RM18-9) at 10.
    \635\ Advanced Energy Management Comments (2018 RM18-9) at 22-
23.
    \636\ Advanced Energy Economy Comments (2018 RM18-9) at 9 n.11.
---------------------------------------------------------------------------

    257. Several commenters generally agree with the Commission that
individual distributed energy resources in an aggregation will need to
be

directly metered. These commenters argue that behind-the-meter
distributed energy resources should be metered separately from the host
site's load due to the need to distinguish between wholesale and retail
actions.\637\ DER/Storage Developers ask the Commission to direct all
RTOs/ISOs to allow direct metering of resources as an optional
alternative to traditional baselines to determine performance.\638\
Independent Energy Producers Association notes that dual-metering can
serve other Commission goals such as minimizing cost shifts, ensuring
reliability, and ensuring market integrity.\639\ MISO states that
visibility at the point of injection is needed to mitigate transmission
risks and ensure that a distributed energy resource is following
dispatch instructions, particularly as the volume of distributed energy
resources grows.\640\ EPSA argues that netting retail and wholesale
services reduces RTO/ISO visibility which makes it difficult for RTOs/
ISOs to efficiently dispatch resources, measure and verify resource
performance, calculate baseline load levels, and support the
reliability, planning, and modeling of system capabilities.\641\
Avangrid cautions that even with separate metering, ownership and
reconciliation of the data for retail billing and wholesale settlement
may be impractically complex.\642\
---------------------------------------------------------------------------

    \637\ Avangrid Comments (RM16-23) at 15; Independent Energy
Producers Association Comments (RM16-23) at 8; Microsoft Comments
(2018 RM18-9) at 17; Organization of MISO States Comments (RM16-23)
at 9; Stem Comments (2018 RM18-9) at 3, 19.
    \638\ DER/Storage Developers Comments (RM16-23) at 4.
    \639\ Independent Energy Producers Association Comments (RM16-
23) at 8.
    \640\ MISO Comments (2018 RM18-9) at 19.
    \641\ EPSA Comments (2018 RM18-9) at 10-13 (citing Distributed
Energy Resources Roadmap at 29-30).
    \642\ Avangrid Comments (RM16-23) at 15.
---------------------------------------------------------------------------

    258. Some commenters question the authority of the Commission or
the RTOs/ISOs to impose specific metering and telemetry requirements on
distributed energy resources. AES Companies argue that the only
metering and telemetry requirements that the Commission or the RTOs/
ISOs can dictate are for the aggregator's node or point of
interconnection to the transmission system under RTO/ISO control.\643\
IRC asks the Commission to acknowledge in any final rule that the RTOs/
ISOs have no jurisdiction to require state-regulated utilities to
install specific retail metering technology, but that wholesale
metering rules for distributed energy resources must be met.\644\
California Energy Storage Alliance recommends that local regulatory
authorities develop and implement metering and telemetry requirements
to avoid the Commission imposing any requirements outside the
Commission's jurisdiction.\645\ The Delaware Commission recommends that
the Commission require distributed energy resources to employ separate
metering and telemetry capability if they are providing both wholesale
and retail services.\646\
---------------------------------------------------------------------------

    \643\ AES Companies Comments (RM16-23) at 47.
    \644\ IRC Comments (RM16-23) at 6.
    \645\ California Energy Storage Alliance Comments (RM16-23) at
9.
    \646\ Delaware Commission Comments (RM16-23) at 5-7 (citing FPC
v. Fla. Power & Light Co., 404 US 461, 463 (1972)), 8.
---------------------------------------------------------------------------

    259. Some state regulators, distribution utilities, and their
representatives note that upgrades may be needed to current metering
technology and associated networking and cyber security in order to
support RTO/ISO needs \647\ and argue that associated costs must be
borne by the distributed energy resources or their aggregators or
through wholesale level cost allocation, and not by distribution
utilities.\648\
---------------------------------------------------------------------------

    \647\ See, e.g., Avangrid Comments (RM16-23) at 15; Dominion
Comments (RM16-23) at 12; EEI Comments (RM16-23) at 13; NARUC
Comments (RM16-23) at 6; SoCal Edison Comments (RM16-23) at 14.
    \648\ See, e.g., Delaware Commission Comments (RM16-23) at 7;
EEI Comments (RM16-23) at 33-34; IRC Comments (RM16-23) at 6;
Massachusetts Municipal Electric Comments (RM16-23) at 4; Six Cities
Comments (RM16-23) at 3; TAPS Comments (RM16-23) at 24.
---------------------------------------------------------------------------

    260. Several commenters discuss the relationship between RTOs/ISOs
and distribution utilities and their respective metering and telemetry
requirements. Fresh Energy/Sierra Club/Union of Concerned Scientists
encourage the development of a framework to share metering data between
the RTO/ISO, distribution utility, and distributed energy resource
aggregator.\649\ Duke Energy recommends that the final rule not
preclude the transfer of telemetry data between the RTO/ISO and the
electric distribution utility.\650\ Similarly, EEI asserts that both
the RTO/ISO and the distribution utility should be provided telemetry
information,\651\ while IRC states that wholesale and retail metering
requirements need to be harmonized to prevent undue barriers to
participation.\652\ Xcel Energy Services recommends that the RTOs/ISOs
and distribution utilities should define the role of a meter data
management agent to provide needed meter data.\653\
---------------------------------------------------------------------------

    \649\ Fresh Energy/Sierra Club/Union of Concerned Scientists
Comments (RM16-23) at 3.
    \650\ Duke Energy Comments (RM16-23) at 5.
    \651\ EEI Comments (RM16-23) at 34.
    \652\ IRC Comments (RM16-23) at 6.
    \653\ Xcel Energy Services Comments (RM16-23) at 27.
---------------------------------------------------------------------------

    261. NARUC, EEI, and MISO argue that, before metering and telemetry
requirements can be established, additional information must be
gathered about the type and purpose of metering and telemetry data
needed, the access to and provision of this data, and the cost
allocation involved.\654\ On the other hand, Fresh Energy/Sierra Club/
Union of Concerned Scientists ask the Commission to not let this debate
hinder progress on establishing necessary distributed energy resource
requirements.\655\
---------------------------------------------------------------------------

    \654\ EEI Comments (RM16-23) at 33; MISO Comments (RM16-23) at
25; NARUC Comments (RM16-23) at 7.
    \655\ Fresh Energy/Sierra Club/Union of Concerned Scientists
Comments (RM16-23) at 3.
---------------------------------------------------------------------------

c. Commission Determination
    262. We adopt the NOPR proposal and add Sec.  35.28(g)(12)(ii)(f)
to the Commission's regulations to require each RTO/ISO to revise its
tariff to establish market rules that address metering and telemetry
hardware and software requirements necessary for distributed energy
resource aggregations to participate in RTO/ISO markets.
    263. We understand the need to balance, on one hand, the RTO's/
ISO's need for metering and telemetry data for settlement and
operational purposes, and, on the other hand, not imposing unnecessary
burdens on distributed energy resource aggregators. Therefore, we will
not prescribe the specific metering and telemetry requirements that
each RTO/ISO must adopt; rather, we provide the RTOs/ISOs with
flexibility to establish the necessary metering and telemetry
requirements for distributed energy resource aggregations, and require
that each RTO/ISO explain in its compliance filing why such
requirements are just and reasonable and do not pose an unnecessary and
undue barrier to individual distributed energy resources joining a
distributed energy resource aggregation.
    264. To implement this requirement, we direct each RTO/ISO to
explain, in its compliance filing, why its proposed metering
requirements are necessary (e.g., for the distributed energy resource
aggregator to provide the settlement and performance data to the RTO/
ISO discussed in Section IV.F or to prevent double counting of services
as discussed in Section IV.C.3) and why its proposed telemetry
requirements are necessary (e.g., for the RTO/ISO to have sufficient
situational awareness to dispatch the

aggregation and the rest of the system efficiently). This explanation
should also include a discussion about whether, for example, the
proposed requirements are similar to requirements already in existence
for other resources and steps contemplated to avoid imposing
unnecessarily burdensome costs on the distributed energy resource
aggregators and individual resources in distributed energy resource
aggregations that may create an undue barrier to their participation in
RTO/ISO markets. We find that this approach will provide each RTO/ISO
with the flexibility to develop metering and telemetry requirements
appropriate for the needs of its systems.
    265. Given the variety of potential aggregation business models, as
well as the variety of existing distribution utility requirements to
which the distributed energy resources participating in aggregations
will be subject, we find that imposing standard requirements is
unwarranted. Standard metering and telemetry requirements could run the
risk of imposing unnecessary costs on RTOs/ISOs, distributed energy
resource aggregators, and the individual distributed energy resources.
For example, imposing standard requirements could impede RTOs/ISOs from
adequately incorporating metering and telemetry requirements already
imposed on distributed energy resources by local regulatory authorities
and thereby create a barrier to the participation of distributed energy
resources in RTO/ISO markets. We find that adopting the NOPR proposal
minimizes these risks and the costs associated with implementing these
requirements because it allows RTOs/ISOs to propose metering and
telemetry requirements in addition to those already in place only when
they determine that such additional requirements are needed.
    266. As clarified in Section IV.F, the distributed energy resource
aggregator, not the individual distributed energy resources in the
aggregation, is the single point of contact with the RTO/ISO,
responsible for managing, dispatching, metering, and settling the
individual distributed energy resources in its aggregation. We further
clarify here that the distributed energy resource aggregator is also
the entity responsible for providing any required metering and
telemetry information to the RTO/ISO.
    267. We decline the requests of some commenters to explicitly limit
metering and/or telemetry requirements to the distributed energy
resource aggregation level, or to require telemetry of individual
distributed energy resources participating in an aggregation. Rather,
consistent with the flexibility provided in Section IV.F, we will not
require uniform metering requirements across all RTOs/ISOs, nor will we
require each RTO/ISO to impose uniform metering requirements on
individual distributed energy resources. Rather, we provide flexibility
to RTOs/ISOs to propose specific metering requirements, including any
that may apply to individual distributed energy resources that the RTO/
ISO demonstrates are needed to obtain any required performance data for
auditing purposes and to address double compensation concerns.
Similarly, we provide flexibility to the RTO/ISO as to whether to
propose specific telemetry requirements for individual distributed
energy resources in an aggregation. The need for such requirements may
depend, for example, on whether the RTO/ISO allows multi-node
aggregations or how multi-node aggregations are implemented. By
providing flexibility while also requiring that the RTO/ISO explain why
any proposed metering and telemetry requirements are necessary, we
allow the RTO/ISO to obtain the metering and telemetry information it
needs without burdening the distributed energy resource aggregator to
provide data that may not be necessary.
    268. We also clarify that, consistent with this flexible approach,
we are not requiring RTOs/ISOs to establish metering and telemetry
hardware and software requirements for distributed energy resource
aggregations that are identical to those placed on existing resources,
or to establish different or additional metering and telemetry
requirements for distributed energy resource aggregations. Rather, we
expect that RTOs/ISOs will base any proposed metering and telemetry
hardware and software requirements for distributed energy resource
aggregations on the information needed by the RTO/ISO while avoiding
unnecessary requirements that may act as a barrier to individual
distributed energy resources joining distributed energy resource
aggregations or to distributed energy resource aggregations
participating in the wholesale markets. However, as explained in
Section IV.F, we require that metering data for settlement purposes at
the distributed energy resource aggregation level be consistent with
settlement data requirements for other resource types. We recognize
that metering and telemetry requirements may vary depending on the
types of distributed energy resources participating in an aggregation,
the size of the individual distributed energy resources or aggregated
resource, or the particular service provided. For example, more
granular or precise telemetry may be necessary for a distributed energy
resource aggregation that is participating in the frequency regulation
market than one that is exclusively providing energy or capacity. To
ensure that the flexible approach outlined here provides the RTO/ISO
with sufficient information to administer the wholesale markets and
ensure reliability of the transmission system while not unduly
burdening distributed energy resources and distributed energy resource
aggregations, we require that each RTO/ISO explain in its compliance
filing why its proposed metering and telemetry requirements for
distributed energy resource aggregations are just and reasonable and do
not pose an unnecessary and undue barrier to individual distributed
energy resources joining a distributed energy resource aggregation.
    269. We also adopt the NOPR proposal that each RTO's/ISO's proposed
metering requirements should rely on meter data obtained through
compliance with distribution utility or local regulatory authority
metering system requirements whenever possible for settlement and
auditing purposes. We further clarify that this requirement also
applies to existing telemetry infrastructure. By using existing
infrastructure whenever possible, RTOs/ISOs should be able to obtain
the data they need and avoid proposing new metering and telemetry
requirements that would be duplicative and could erect unnecessary
barriers to entry for distributed energy resource aggregators and
individual distributed energy resources participating in an
aggregation. With respect to jurisdictional concerns raised by some
commenters, we note that any additional RTO/ISO metering and telemetry
requirements would not change those required by state or local
regulatory authorities and would be required solely to assist with
settlements and audits of activity in RTO/ISO markets, or to provide
RTOs/ISOs with the real-time information needed to reliably and
efficiently dispatch their systems.
    270. In response to concerns about the potential costs and burdens
that could be imposed on distribution utilities as a result of the
requirement that RTOs/ISOs rely on metering and telemetry data obtained
through compliance with distribution utility or local regulatory
authority metering system requirements whenever possible, we expect
that in

general, this information will be provided by individual distributed
energy resources to distributed energy resource aggregators, and from
distributed energy resource aggregators to RTOs/ISOs. However, to the
extent that the RTO/ISO proposes that such information come from or
flow through distribution utilities, we require that RTOs/ISOs
coordinate with distribution utilities and relevant electric retail
regulatory authorities to establish protocols for sharing metering and
telemetry data, and that such protocols minimize costs and other
burdens and address concerns raised with respect to privacy and
cybersecurity.
    271. In response to IRC's request for flexibility to define
metering and telemetry requirements outside the RTO/ISO tariffs, we
find that the RTO/ISO tariffs should include a basic description of the
metering and telemetry practices for distributed energy resource
aggregations as well as references to specific documents that will
contain further technical details. Decisions as to whether an item
should be placed in a tariff or in a business practice manual are
guided by the Commission's rule of reason policy,\656\ under which
provisions that ``significantly affect rates, terms, and conditions''
of service, are readily susceptible of specification, and are not
generally understood in a contractual agreement must be included in the
tariff, while items better classified as implementation details may be
included only in the business practice manual. We find that metering
and telemetry requirements significantly affect the terms and
conditions of the participation of distributed energy resource
aggregations in RTO/ISO markets and, therefore, must be included in the
RTO/ISO tariffs.
---------------------------------------------------------------------------

    \656\ See, e.g., Energy Storage Ass'n v. PJM Interconnection,
L.L.C., 162 FERC ] 61,296, at P 103 (2018) (Energy Storage Ass'n v.
PJM) (citing Midcontinent Indep. Sys. Operator, Inc., 158 FERC ]
61,003, at P 69 (2017); PacifiCorp, 127 FERC ] 61,144, at P 11
(2009); City of Cleveland v. FERC, 773 F.2d 1368, 1376 (D.C. Cir.
1985) (finding that utilities must file ``only those practices that
affect rates and service significantly, that are reasonably
susceptible of specification, and that are not so generally
understood in any contractual arrangement as to render recitation
superfluous''); Pub. Serv. Comm'n of N.Y. v. FERC, 813 F.2d 448, 454
(D.C. Cir. 1987) (holding that the Commission properly excused
utilities from filing policies or practices that dealt with only
matters of ``practical insignificance'' to serving customers)).
---------------------------------------------------------------------------

H. Coordination Between the RTO/ISO, Aggregator, and Distribution
Utility

1. Market Rules on Coordination
a. NOPR Proposal
    272. In the NOPR, the Commission noted that the market rules that
each RTO/ISO adopts to facilitate the participation of distributed
energy resource aggregations must address coordination between the RTO/
ISO, the distributed energy resource aggregator, and the distribution
utility to ensure that the participation of these resources in RTO/ISO
markets does not present reliability or safety concerns for the
distribution or transmission system.\657\ Thus, the Commission proposed
to require each RTO/ISO to revise its tariff to provide for
coordination among the RTO/ISO, a distributed energy resource
aggregator, and the relevant distribution utilities with respect to (1)
the registration of new distributed energy resource aggregations; and
(2) ongoing coordination, including operational coordination, between
the RTO/ISO, a distributed energy resource aggregator, and the relevant
distribution utility or utilities.
---------------------------------------------------------------------------

    \657\ NOPR, 157 FERC ] 61,121 at P 153.
---------------------------------------------------------------------------

    273. After the April 2018 technical conference, the Commission
sought further information on certain proposals regarding detailed
aspects of the coordination requirements.\658\
---------------------------------------------------------------------------

    \658\ Notice Inviting Post-Technical Conference Comments at 7-
11.
---------------------------------------------------------------------------

b. Comments
    274. Many commenters support the coordination processes proposed in
the NOPR because it will ensure that participation of distributed
energy resource aggregations in RTO/ISO markets does not compromise
these markets or the reliability or safety of the transmission and
distribution systems.\659\ For example, based on its experience with
implementing CAISO's Distributed Energy Resource Provider framework,
Pacific Gas & Electric states that it is vitally important that RTOs/
ISOs coordinate with distribution utilities with respect to both
registration of distributed energy resource aggregations and their
ongoing operation.\660\
---------------------------------------------------------------------------

    \659\ See, e.g., CAISO Comments (RM16-23) at 39; Connecticut
State Entities Comments (RM16-23) at 6; Dominion Comments (RM16-23)
at 13; Institute for Policy Integrity Comments (RM16-23) at 9; NYISO
Comments (RM16-23) at 19.
    \660\ Pacific Gas & Electric Comments (RM16-23) at 21.
---------------------------------------------------------------------------

    275. Advanced Energy Economy states that it recognizes that the
RTOs/ISOs need visibility into distributed energy resource operations
and that coordination among the RTO/ISO, the distribution utility, and
distributed energy resource aggregators is necessary to ensure reliable
operations.\661\ Advanced Energy Economy asserts that these visibility
and operational issues are surmountable and that certain RTOs/ISOs
(particularly CAISO and ISO-NE) have made great progress in developing
standards and rules to address these issues. Advanced Energy Economy
states that fully integrating advanced energy technologies that are
already available and growing rapidly will only enhance the ability to
quickly address visibility and operational issues.
---------------------------------------------------------------------------

    \661\ Advanced Energy Economy Comments (RM16-23) at 13.
---------------------------------------------------------------------------

    276. Commenters note that coordination would be further enhanced
with the development of distribution system operators.\662\ PJM
believes that value may be added if an RTO/ISO were to coordinate with
a distribution system operator, but states that without a true
distribution system operator operating in the PJM region (or anywhere
else in the country) it cannot opine on the specific benefits that such
coordination could achieve.\663\ SoCal Edison notes that, in
California, distribution utilities are already performing the initial
functions of a distribution system operator and that the utility is
uniquely situated to provide this role in the future.\664\
---------------------------------------------------------------------------

    \662\ De Martini and Kristov define a distribution system
operator as ``the entity responsible for planning and operational
functions associated with a distribution system that is modernized
for high levels of [distributed energy resources].'' Paul De Martini
and Lorenzo Kristov, ``Distribution Systems in a High DER Future:
Planning, Market Design, Operation and Oversight,'' Future Electric
Utility Regulation Series, Lawrence Berkeley National Laboratory,
October 2015, p. vi.
    \663\ PJM Comments (RM16-23) at 28.
    \664\ SoCal Edison Comments (RM16-23) at 8.
---------------------------------------------------------------------------

    277. While supportive of the coordination requirements in the NOPR,
Mensah argues that the cost of registering an aggregation as well as
ongoing operational coordination should not place any unnecessary
burden on distributed energy resource aggregations.\665\
---------------------------------------------------------------------------

    \665\ Mensah Comments (RM16-23) at 4.
---------------------------------------------------------------------------

c. Commission Determination
    278. We adopt the NOPR proposal, as modified and clarified below,
and add Sec.  35.28(g)(12)(ii)(g) to the Commission's regulations to
require each RTO/ISO to revise its tariff to establish market rules
that address coordination between the RTO/ISO, the distributed energy
resource aggregator, the distribution utility, and the relevant
electric retail regulatory authorities.

    279. We agree with commenters that coordination requirements should
not create undue barriers to entry for distributed energy resource
aggregations. However, we must also consider the substantial role of
distribution utilities and state and local regulators in ensuring the
safety and reliability of the distribution system. We believe that the
reforms adopted herein appropriately balance those needs.
    280. Further, as discussed in Section IV.H.4 below,\666\ although
the NOPR did not discuss the role of state and local regulatory
authorities in coordination efforts, we recognize that state and local
regulatory authorities have a key role to play in such coordination
efforts. Therefore, we have modified the NOPR proposal to ensure that
the RTO/ISOs also coordinate with these entities.
---------------------------------------------------------------------------

    \666\ See infra Section IV.H.4 (Role of Relevant Electric Retail
Regulatory Authorities).
---------------------------------------------------------------------------

2. Role of Distribution Utilities
a. NOPR Proposal
    281. In the NOPR, the Commission proposed that the market rules on
coordination provide the relevant distribution utility or utilities
with the opportunity to review the list of individual resources that
are located on their distribution systems and that enroll in a
distributed energy resource aggregation before those resources may
participate in RTO/ISO markets through the aggregation.\667\ The
Commission explained that the purpose of this coordination would be to
ensure that all of the individual resources in the distributed energy
resource aggregation are technically capable of providing services to
the RTO/ISO through the aggregator and are eligible to be part of the
aggregation.\668\ The Commission further explained that the opportunity
for the relevant distribution utility to review the list of these
resources would allow them to assess whether the resources would be
able to respond to RTO/ISO dispatch instructions without posing any
significant risk to the distribution system and to ensure these
resources are not participating in any other retail compensation
programs. The Commission proposed to give the relevant distribution
utility or utilities the opportunity to report such concerns or issues
to the RTO/ISO for its consideration prior to the RTO/ISO allowing the
new or modified distributed energy resource aggregation to participate
in the organized wholesale electric market.
---------------------------------------------------------------------------

    \667\ NOPR, 157 FERC ] 61,121 at PP 149, 154.
    \668\ Id. P 154.
---------------------------------------------------------------------------

b. Comments
    282. Numerous commenters generally support the NOPR proposal for
distribution utility review,\669\ but differ about the scope and the
timing of this review.
---------------------------------------------------------------------------

    \669\ See, e.g., Avangrid Comments (RM16-23) at 16; Pacific Gas
& Electric Comments (RM16-23) at 21; PJM Comments (2018 RM18-9) at
19; Robert Borlick Comments (RM16-23) at 5-7; SoCal Edison Comments
(RM16-23) at 6; TAPS Comments (2018 RM18-9) at 27.
---------------------------------------------------------------------------

    283. While generally supportive of the NOPR proposal, several
distribution utilities voice a broad range of concerns about their role
in coordination and the impact of distributed energy resource
aggregations on their distribution systems. In particular, distribution
utilities generally argue for an even greater and decision-making role
in reviewing distributed energy resource registrations.\670\ NRECA
argues for distribution utility review of individual distributed energy
resource participation in distributed energy resource aggregations
before the resources participate in RTO/ISO markets.\671\ Additional
commenters argue that distribution utilities and RTOs/ISOs must be
afforded enough time to perform impact studies, preferably using study
parameters adopted and implemented by state and local regulators, for
each distributed energy resource and for the aggregation to ensure safe
and reliable grid operation,\672\ and other commenters specifically
request that the Commission address the timing of the distribution
utility review in the final rule.\673\ MISO Transmission Owners request
that any final rule require distribution utility approval of any
aggregation arrangement to ensure that all of the appropriate
distribution utility requirements for interconnection and other
relevant regulations and processes have been met.\674\ NRECA asserts
that distribution utilities need detailed information in order to
assess whether distributed energy resource participation is
beneficial.\675\
---------------------------------------------------------------------------

    \670\ See, e.g., Dominion Comments (RM16-23) at 10; EEI Comments
(RM16-23) at 35-36; MISO Transmission Owners Comments (RM16-23) at
19; SoCal Edison Comments (RM16-23) at 11-12; Xcel Energy Services
Comments (RM16-23) at 28.
    \671\ NRECA Comments (2018 RM18-9) at 29.
    \672\ See, e.g., Dominion Comments (RM16-23) at 10; EEI Comments
(RM16-23) at 35-36; PJM Utilities Coalition Comments (2018 RM18-9)
at 14-15.
    \673\ See, e.g., Advanced Energy Economy Comments (RM16-23) at
40; Advanced Energy Management Comments (RM16-23) at 21; NextEra
Comments (RM16-23) at 17.
    \674\ MISO Transmission Owners Comments (RM16-23) at 19.
    \675\ NRECA Comments (2018 RM18-9) at 29.
---------------------------------------------------------------------------

    284. Moreover, several distribution utilities seek more than review
capability and assert that the distribution utility's consent to the
participation of a distributed energy resource in an aggregation is a
necessary prerequisite before the aggregation may operate.\676\
According to these commenters, distribution utilities, who have the
knowledge and understanding of distribution system challenges, should
have the authority to make decisions regarding the participation of a
distributed energy resource aggregation.\677\ EEI further argues that
distribution utilities must be able to restrict participation until the
reliability and/or safety issue is addressed, and must be notified in
real-time if a resource that is connected to its distribution system
joins a distributed energy resource aggregation.\678\
---------------------------------------------------------------------------

    \676\ See, e.g., EEI Comments (2018 RM18-9) at 10, 13; NRECA
Comments (2018 RM18-9) at 29; PJM Utilities Coalition Comments (2018
RM18-9) at 14; TAPS Comments (RM16-23) at 25; TAPS Comments (2018
RM18-9) at 28.
    \677\ See, e.g., EEI Comments (2018 RM18-9) at 13; TAPS Comments
(2018 RM18-9) at 28.
    \678\ EEI Comments (2018 RM18-9) at 13.
---------------------------------------------------------------------------

    285. Electric storage resource developers and advocates support the
NOPR proposal, but raise concerns about the proposed distribution
utility review process.\679\ They are concerned that distribution
utility review will act as a barrier by providing the distribution
utility a ``gatekeeper'' role.\680\ Furthermore, some commenters argue
that distribution utilities do not have the right or the jurisdiction
to veto what distributed energy resources may join aggregations or what
aggregations may participate in organized wholesale electric
markets.\681\ Advanced Energy Management states that giving
distribution utilities discretionary authority to approve distributed
energy resources ``could usurp FERC's clear jurisdiction over the
conditions for wholesale market eligibility.'' \682\ Similarly, SEIA
suggests that the discretion of distribution utilities should be
limited to violations of interconnection agreements and that it

would be inappropriate for distribution utilities to have veto rights
over distributed energy resource participation.\683\ SEIA further draws
a distinction between existing and new distributed energy resources.
For existing distributed energy resources that are already operating on
the grid, so long as the distributed energy resource does not modify
the generation system outside of what has already been approved, SEIA
recommends that the Commission ensure that there is a streamlined
process to ensure that the existing distributed energy resources can
participate through a distributed energy resource aggregator
participation model.
---------------------------------------------------------------------------

    \679\ See, e.g., Advanced Energy Economy Comments (RM16-23) at
39, 40; Advanced Energy Management Comments (RM16-23) at 21, 22;
Center for Biological Diversity Comments (RM16-23) at 3; Stem
Comments (RM16-23) at 15.
    \680\ See, e.g., Advanced Energy Economy Comments (RM16-23) at
39, 40; Advanced Energy Management Comments (RM16-23) at 21, 22;
Stem Comments (RM16-23) at 14-15.
    \681\ See, e.g., Advanced Energy Economy Comments (2018 RM18-9)
at 11; Advanced Energy Management Comments (2018 RM18-9) at 18; SEIA
Comments (2018 RM18-9) at 16; Stem Comments (2018 RM18-9) at 15;
Sunrun Comments (2018 RM18-9) at 6.
    \682\ Advanced Energy Management Comments (2018 RM18-9) at 18.
    \683\ SEIA Comments (2018 RM18-9) at 16.
---------------------------------------------------------------------------

    286. Commenters in support of the NOPR proposal urge the Commission
to include limits on the scope of this review or adopt specific
parameters for this review. Global Cold Chain Alliance and Viking Cold
Solutions raise concerns about distribution review processes that
prevent development and adoption of new technologies.\684\ Advanced
Energy Management and Advanced Energy Economy further argue that
distribution utilities should (1) be required to identify to RTOs/ISOs
specific areas of their network where they have limited ability to
accommodate additional distributed energy resource registrations, with
a notification requirement only when the local ability has been
exceeded; (2) allow customers and their distributed energy resource
aggregators to see information provided by the utility if the RTO/ISO
uses that information in a decision to prohibit a distributed energy
resource registration, and provide the ability to appeal such a
rejection; and (3) be prohibited from registering customers in their
own distributed energy resource aggregations that they had previously
disqualified for reliability reasons.\685\ Advanced Energy Management
also recommends that there should be no requirement for distribution
utilities to review distributed energy resource registrations unless
the customers are exporting to the grid.\686\ After a specific timeline
of review, Advanced Energy Management and Tesla recommend that the
distribution utility still be given the opportunity to notify the RTO/
ISO if the distributed energy resource does not have the necessary
interconnection agreements or is participating in a retail tariff that
did not allow wholesale participation.\687\ In these limited
``exception only'' models, distribution utilities are not provided the
ability to approve distributed energy resource participation in
Commission-jurisdictional markets, but may review and raise
objections.\688\ Advanced Energy Management and Stem state that
distribution utilities should exercise their authority prior to a
distributed energy resource's registration in a RTO/ISO by defining
non-discriminatory interconnection procedures that ensure the
distribution grid can accommodate distributed energy resources, whether
or not a distributed energy resource aggregation participated in a
wholesale transaction.\689\
---------------------------------------------------------------------------

    \684\ Global Cold Chain Alliance Comments (2018 RM18-9) at 2-3;
Viking Cold Solutions Comments (2018 RM18-9) at 3.
    \685\ Advanced Energy Economy Comments (RM16-23) at 39, 40;
Advanced Energy Management Comments (RM16-23) at 21, 22.
    \686\ Advanced Energy Management Comments (RM16-23) at 21.
    \687\ Advanced Energy Management Comments (2018 RM18-9) at 19;
Tesla Comments (2018 RM18-9) at 10.
    \688\ See, e.g., Advanced Energy Management Comments (2018 RM18-
9) at 17; Icetec Comments (2018 RM18-9) at 17-18; Sunrun Comments
(2018 RM18-9) at 7; Tesla Comments (2018 RM18-9) at 9-10.
    \689\ Advanced Energy Management Comments (2018 RM18-9) at 18;
Stem Comments (2018 RM18-9) at 15.
---------------------------------------------------------------------------

    287. Multiple commenters suggest specific review criteria that the
distribution utilities should adhere to. Several commenters assert that
any denial of participation in distributed energy resource aggregation
should only be based on specified operational coordination and
reliability concerns, such as violation of state-regulated
interconnection protocols and agreements that address binding
distribution system constraints and reflect non-discriminatory
agreements on exporting energy to the grid, or reflect customers who
already participate in tariffs or other agreements that disallow
wholesale participation.\690\ NRECA offers the following criteria: That
the participation of a distributed energy resource in an aggregation
will not create any safety, reliability or power quality concerns on
their systems, and that implementation of distributed energy resource
aggregation will conform to the requirements of the IEEE
standards.\691\ NYISO Indicated Transmission Owners suggest that any
interconnection agreement for a distributed energy resource
participating in an aggregation must demonstrate the ability of an
individual distributed energy resource to (1) participate in an
aggregation; (2) communicate essential information to the distribution
system operator and RTO/ISO using RTO/ISO communication and operating
protocols, as appropriate; and (3) meet RTO/ISO performance
standards.\692\ Pacific Gas & Electric recommends that an individual
distributed energy resource wishing to participate in an aggregation
(1) will not cause voltage problems or overload existing equipment; (2)
is able to comply with requirements in its individual interconnection
agreement when operated in the aggregate; and (3) is not already
participating in another distributed energy resource aggregation.\693\
EEI argues that the criteria to determine distributed energy resource
participation should be ``good utility practice.'' \694\ In a similar
vein, several commenters request clear standards or guidelines for
distribution utility review, while APPA conversely urges the Commission
to allow for flexibility in the criteria adopted by distribution
utilities.\695\
---------------------------------------------------------------------------

    \690\ See, e.g., Advanced Energy Economy Comments (2018 RM18-9)
at 11; Icetec Comments (2018 RM18-9) at 16; SEIA Comments (2018
RM18-9) at 16; Stem Comments (2018 RM18-9) at 14-15; Tesla Comments
(2018 RM18-9) at 9.
    \691\ NRECA Comments (2018 RM18-9) at 30.
    \692\ NYISO Indicated Transmission Owners Comments (2018 RM18-9)
at 15, 17.
    \693\ Pacific Gas & Electric Comments (2018 RM18-9) at 17-18.
    \694\ EEI Comments (2018 RM18-9) at 14.
    \695\ See, e.g., Advanced Energy Economy Comments (RM16-23) at
39; APPA Comments (2018 RM18-9) at 27; Center for Biological
Diversity Comments (RM16-23) at 3.
---------------------------------------------------------------------------

    288. Stem and Tesla/SolarCity do not support the NOPR proposal on
distribution utility review and recommend that limits be placed on this
review if the Commission chooses to include the requirement in a final
rule. Stem argues that the Commission should not give local
distribution utilities carte blanche to deny a distributed energy
resource eligibility to participate in a distributed energy resource
aggregation, RTO/ISO markets, or other participation model.\696\ Stem
recommends an alternative default approach that allows participation
unless the local utility provides a specific, credible safety or
reliability risk.\697\ Tesla/SolarCity argue that having an appropriate
level of communication between the RTO/ISO and distribution utility
eliminates the need for distribution utility review.\698\
---------------------------------------------------------------------------

    \696\ Stem Comments (RM16-23) at 4, 15.
    \697\ Id. at 4.
    \698\ Tesla/SolarCity Comments (RM16-23) at 30.
---------------------------------------------------------------------------

    289. Commenters also express differing opinions on the length of
time required to conduct the review of distributed energy resource
participation. Several distribution utilities recommend that a
reasonable timetable or no time limits be established for review, and
argue that sufficient time is needed for review and/

or consultation between the distributed energy resource aggregator and
distribution utility to ensure the distribution grid can be operated in
a safe and reliable manner during the aggregated distributed energy
resource operating conditions.\699\ Distributed energy resource
providers, such as Stem, take the opposite view and assert that RTOs
and ISOs are not obligated to wait for the distribution utility to
review the registration of a distributed energy resource if the
distributed energy resource can prove it has completed an applicable
state-level interconnection process.\700\ Nevertheless, several
commenters agree that it would be reasonable for an RTO/ISO to pause
registration of a distributed energy resource to provide time (e.g., 10
days or CAISO's 30-day timeline) for the distribution utility to ensure
that sufficient interconnection procedures have been followed and
approved interconnection agreements are in place, but they do not
recommend the Commission require a specific timeline.\701\ Icetec
specifically requests that RTO/ISO rules be developed on the procedures
and timelines for distribution-level studies if there is no state and
local regulatory tariff governing these studies.\702\
---------------------------------------------------------------------------

    \699\ See, e.g., NRECA Comments (2018 RM18-9) at 29; Pacific Gas
& Electric Comments (2018 RM18-9) at 13.
    \700\ Stem Comments (2018 RM18-9) at 15.
    \701\ See, e.g., Icetec Comments (2018 RM18-9) at 17-18; Stem
Comments (2018 RM18-9) at 15; Sunrun Comments (2018 RM18-9) at 7.
    \702\ Icetec Comments (2018 RM18-9) at 9.
---------------------------------------------------------------------------

    290. RTOs/ISOs support the NOPR proposal but raise questions about
their role in aggregation approvals and dispute resolution,
communication system requirements, and the extent of the coordination
proposed by the Commission.\703\ PJM argues that the registration
process and timing needed to participate in an RTO/ISO market should be
straight forward, predictable, and transparent, and that any basis for
the RTO/ISO to prohibit wholesale market participation should be set
forth in its tariff.\704\ CAISO, IRC, and PJM would also like the
Commission to provide guidance on how and where disputes between the
RTO/ISO and distribution utilities regarding coordination of
distributed energy resources are to be resolved.\705\ CAISO requests
additional processes beyond sharing information, arguing that processes
are needed to resolve or mitigate any problems the distribution utility
may find during its review, including developing a solution with the
distributed energy resource provider.\706\
---------------------------------------------------------------------------

    \703\ CAISO Comments (RM16-23) at 39, 41-43, 46; IRC Comments
(RM16-23) at 9; ISO-NE Comments (RM16-23) at 54-55; PJM Comments
(RM16-23) at 8, 26; SPP Comments (RM16-23) at 24.
    \704\ PJM Comments (2018 RM18-9) at 19.
    \705\ CAISO Comments (RM16-23) at 41; IRC Comments (RM16-23) at
9; PJM Comments (RM16-23) at 8.
    \706\ CAISO Comments (RM16-23) at 41.
---------------------------------------------------------------------------

    291. Finally, while most comments focus on initial registration,
TAPS states that a distribution utility should also be able to reopen
the approval of an individual distributed energy resource's enrollment
in a distributed energy resource aggregation if the distribution system
is reconfigured.\707\
---------------------------------------------------------------------------

    \707\ TAPS Comments (2018 RM18-9) at 28.
---------------------------------------------------------------------------

c. Commission Determination
    292. To implement Sec.  35.28(g)(12)(ii)(g) of the Commission's
regulations, we adopt the NOPR proposal to require each RTO/ISO to
modify its tariff to incorporate a comprehensive and non-discriminatory
process for timely review by a distribution utility of the individual
distributed energy resources that comprise a distributed energy
resource aggregation, which is triggered by initial registration of the
distributed energy resource aggregation or incremental changes to a
distributed energy resource aggregation already participating in the
markets. As described below, each RTO/ISO must coordinate with
distribution utilities to develop a distribution utility review process
that includes criteria by which the distribution utilities would
determine whether (1) each proposed distributed energy resource is
capable of participation in a distributed energy resource aggregation;
and (2) the participation of each proposed distributed energy resource
in a distributed energy resource aggregation will not pose significant
risks to the reliable and safe operation of the distribution system. To
support this review process, RTOs/ISOs must share with distribution
utilities any necessary information and data collected under Section
IV.F of this final rule about the individual distributed energy
resources participating in a distributed energy resource aggregation.
In addition, the results of a distribution utility's review must be
incorporated into the distributed energy resource aggregation
registration process.
    293. To balance the need for distribution utility review with the
need to avoid creating potential barriers to distributed energy
resource aggregation, as noted by commenters, we require each RTO/ISO
to demonstrate on compliance with this final rule, as discussed further
below,\708\ that its proposed distribution utility review process is
transparent, provides specific review criteria that the distribution
utilities should use, and provides adequate and reasonable time for
distribution utility review.\709\ A transparent review process with
specific review criteria will allow distribution utilities to review
and identify concerns regarding the ability of distributed energy
resources to participate in a distributed energy resource aggregation
without posing significant reliability risk to the distribution system.
We also find that allowing an RTO/ISO to design this new process allows
regional flexibility in developing review procedures appropriate for
each particular RTO/ISO.
---------------------------------------------------------------------------

    \708\ See infra PP 295-297.
    \709\ For example, the approach used in the CAISO Distributed
Energy Resource Provider program.
---------------------------------------------------------------------------

    294. As explained above,\710\ we decline to exercise jurisdiction
over the interconnection of an individual distributed energy resource
seeking to participate in RTO/ISO markets exclusively as part of an
aggregation. We expect that the state and local interconnection
processes for distributed energy resources will provide the appropriate
platform to address and study potential distribution system impacts and
provide the necessary information to inform distribution utility review
during distributed energy resource aggregation registration. However,
to the extent that some existing state and local interconnection
processes do not already capture such information, this final rule in
no way prevents state and local regulators from amending their
interconnection processes to address potential distribution system
impacts that the participation of distributed energy resources through
distributed energy resource aggregations may cause. In addition,
coordination between RTOs/ISOs, distributed energy resource
aggregators, relevant electric retail regulatory authorities, and
distribution utilities during the registration and distribution utility
review processes should provide RTOs/ISOs with the information they
need to study the impact of distributed energy resource aggregations on
the transmission system.
---------------------------------------------------------------------------

    \710\ See supra Section IV.A.3 (Interconnection).
---------------------------------------------------------------------------

    295. We agree with commenters \711\ that a lengthy review time or
the lack of a deadline could erect a barrier to distributed energy
resource

participation in the RTO/ISO markets and may unduly delay
participation. In response to these concerns, we clarify that any
distribution utility review must be completed within a limited, but
reasonable amount of time.\712\ We expect a reasonable amount of time
may vary among RTOs/ISOs but should not exceed 60 days. An RTO/ISO, on
compliance, should propose a timeline that reflects its regional needs.
In compliance with this final rule, we require each RTO/ISO to revise
its tariff to specify, as part of its proposed distribution utility
review process, the time that a distribution utility has to identify
any concerns regarding a distributed energy resource seeking to
participate in the RTO/ISO markets through an aggregation.
---------------------------------------------------------------------------

    \711\ See, e.g., Advanced Energy Management Comments (2018 RM18-
9) at 19; Stem Comments (2018 RM18-9) at 15; Tesla Comments (2018
RM18-9) at 9.
    \712\ For instance, CAISO utilizes a 30-day review period in its
Distributed Energy Resource Provider program.
---------------------------------------------------------------------------

    296. In addition, we agree with commenters that argue for specific
standards and criteria to guide and govern the distribution utility
review process. However, we are not standardizing the criteria that the
RTOs/ISOs must adopt. We believe there are sufficient differences among
the regions, such as their rules limiting participation in different
programs, to warrant flexibility in determining specific standardized
criteria. On compliance with this final rule, we require that each RTO/
ISO revise its tariff to include, as part of its proposed distribution
utility review processes, the distribution utility review criteria by
which distribution utilities can determine that a distributed energy
resource (1) is capable of participating in an aggregation, e.g., the
distributed energy resource is not already participating in a retail
distributed energy resource program in which the relevant electric
retail regulatory authority conditioned the resource's participation on
not participating in RTO/ISO markets; and (2) does not pose significant
risks to the reliable and safe operation of the distribution system.
    297. We agree with multiple commenters, such as EEI and Advanced
Energy Economy, that the RTOs/ISOs must include potential impacts on
distribution system reliability as a criterion in the distribution
utility review process. For example, if a distribution utility
determines during the distribution utility review process that a
distributed energy resource operated as part of an aggregation may
increase voltage above acceptable limits or create potential equipment
overloads, the distribution utility should have the opportunity to
alert the RTO/ISO and recommend removal of that distributed energy
resource from the distributed energy resource aggregation. In addition,
the distribution utility should have the opportunity to request that
the RTO/ISO place operational limitations on an aggregation or removal
of a distributed energy resource from an aggregation based on specific
significant reliability or safety concerns that it clearly demonstrates
to the RTO/ISO and distributed energy resource aggregator on a case-by-
case basis. For example, the RTOs/ISOs may consider requiring a signed
affidavit or other evidence from the distribution utility that a
distributed energy resource's participation in RTO/ISO markets would
pose a significant risk to the safe and reliable operation of the
distribution system, and processes to contest the distribution
utility's recommendation for removal or for operational limitations to
be placed on the aggregation.
    298. In response to comments from EEI, TAPS, and multiple
distribution utilities that argue for a larger and decision-making role
for the distribution utilities during the review of distributed energy
resource registrations, we decline to provide such a role. We find that
requiring or permitting distribution utilities to authorize the
participation of distributed energy resources in RTO/ISO markets
directly or as part of an aggregation could create a barrier to
distributed energy resource aggregation.\713\ The distribution utility
review processes and interconnection protocols discussed above should
address and resolve the key distribution reliability concerns raised by
these commenters. We find that the ability of distribution utilities to
review and comment on distributed energy resource participation in
aggregations, as well as the Commission's finding that individual
distributed energy resources that will participate in aggregations will
interconnect under state and local interconnection protocols,
represents a balanced approach to removing barriers to the
participation of distributed energy resource aggregations in RTO/ISO
markets, while protecting reliability and the fundamental role of
distribution utilities in operating their distribution systems.
---------------------------------------------------------------------------

    \713\ See supra Section IV.A.2 (Opt-Out) for further discussion.
---------------------------------------------------------------------------

    299. In response to concerns raised by IRC and PJM regarding
disputes about distribution utility review,\714\ we find that any
disputes over the application of coordination and distribution utility
review processes between the RTO/ISO, the distribution utilities, and
the distributed energy resource aggregators must be subject to a
process for resolving disputes in the RTO/ISO tariff. Therefore, we
require each RTO/ISO to revise its tariff to incorporate dispute
resolution provisions as part of its proposed distribution utility
review process. In its compliance filing, each RTO/ISO should describe
how existing dispute resolution procedures are sufficient or,
alternatively, propose amendments to its procedures or new dispute
resolution procedures specific to this subject. Ensuring that disputes
regarding the distribution utility review process are subject to
dispute resolution provisions in RTO/ISO tariffs provides a formal
mechanism for the interested party to attempt to resolve the issue with
the RTO/ISO. Any parties in conflict over the distribution utility
review processes may also bring such disputes to the Commission's
Dispute Resolution Service, or file complaints pursuant to FPA section
206 at any time.\715\
---------------------------------------------------------------------------

    \714\ See, e.g., IRC Comments (RM16-23) at 9; PJM Comments (2018
RM18-9) at 8.
    \715\ For example, a dispute over how the RTO/ISO managed and
implemented the distribution review process during a distributed
energy resource aggregation registration could be brought to the
Commission.
---------------------------------------------------------------------------

3. Ongoing Operational Coordination
a. NOPR Proposal
    300. In the NOPR, the Commission proposed to require that each RTO/
ISO revise its tariff to establish a process for ongoing coordination,
including operational coordination, among itself, the distributed
energy resource aggregator, and the distribution utility to maximize
the availability of the distributed energy resource aggregation
consistent with the safe and reliable operation of the distribution
system.\716\ The Commission explained that the purpose of this ongoing
coordination would be to ensure that the distributed energy resource
aggregator disaggregates dispatch signals from the RTO/ISO and
dispatches individual resources in a distributed energy resource
aggregation consistent with the limitations of the distribution system.
To account for the possibility that distribution facilities may be out
of service and impair the operation of certain individual resources in
a distributed energy resource aggregation, the Commission also proposed
to require each RTO/ISO to revise its tariff to require the distributed
energy resource aggregator to report to the RTO/ISO any changes to its
offered quantity and related distribution

factors that result from distribution line faults or outages.
---------------------------------------------------------------------------

    \716\ NOPR, 157 FERC ] 61,121 at P 155.
---------------------------------------------------------------------------

    301. In addition, the Commission sought comment on any related
reliability, safety, and operational concerns and how they may be
effectively addressed.
b. Comments
    302. Several commenters express their support for ongoing
coordination and emphasize the importance of real-time coordination to
ensure safe and reliable operation of the transmission and distribution
systems.\717\ Many distribution utilities in support of the NOPR
proposal suggest specific roles or priorities for distribution
utilities as part of ongoing coordination. Pacific Gas & Electric
states that services in support of distribution system safety and
reliability must be prioritized, as determined by the distribution
company, over wholesale market participation when distributed energy
resources are providing multiple services.\718\ NYISO Indicated
Transmission Owners and Xcel Energy Services request that the
Commission permit distribution utilities to limit the energy injections
and ancillary services from specific distributed energy resources with
advanced notice.\719\ Other commenters argue that distribution
utilities must have the ability to limit distributed energy resource
generation in order to ensure safety and reliability because RTOs/ISOs
do not have sufficient information to maintain the safety and
reliability of the distribution grid.\720\
---------------------------------------------------------------------------

    \717\ See, e.g., APPA/NRECA Comments (RM16-23) at 45; Duke
Energy Comments (RM16-23) at 7; EEI Comments (RM16-23) at 37; Exelon
Comments (RM16-23) at 2, 11; Guannan He Comments (RM16-23) at 2;
NYISO Comments (RM16-23) at 19.
    \718\ Pacific Gas & Electric Comments (RM16-23) at 21.
    \719\ NYISO Indicated Transmission Owners Comments (RM16-23) at
15-16; Xcel Energy Services Comments (RM16-23) at 28.
    \720\ Organization of MISO States Comments (2018 RM18-9) at 5;
SoCal Edison Comments (RM16-23) at 7-8.
---------------------------------------------------------------------------

    303. Several commenters provide input on the processes needed to
alert distributed energy resource aggregators about problems on
distribution systems. Dominion agrees with the NOPR requirement that a
distributed energy resource aggregator should be responsible for
reporting to the RTO/ISO when its offered quantity changes due to
distribution facilities being out of service.\721\ SPP notes it will
require significant effort to coordinate with entities with which the
RTO/ISO has not previously had two-way communications.\722\ CAISO
recommends that the approach being developed for its Distributed Energy
Resource Provider program be used as a means to allow distribution
utilities to identify problems on their distribution systems.\723\
CAISO believes that a process is needed for distribution utilities to
notify a distributed energy resource aggregator of changes to
distribution system conditions that will affect the aggregated
resource's ability to perform to its maximum capability, such as a red/
green traffic signal.\724\ The Organization of MISO States argues that
distribution system operators must have the ability to communicate
information on topology changes in real-time which may impact the
ability of aggregations to participate in the wholesale market.\725\
Several commenters indicate that the current data acquisition
technologies are largely manual, but will be adequate initially for
ongoing coordination.\726\
---------------------------------------------------------------------------

    \721\ Dominion Comments (RM16-23) at 13-14.
    \722\ SPP Comments (RM16-23) at 24.
    \723\ CAISO Comments (RM16-23) at 42-43.
    \724\ Id. at 42-44.
    \725\ Organization of MISO States Comments (2018 RM18-9) at 5.
    \726\ See, e.g., NYISO Indicated Transmission Owners Comments
(2018 RM18-9) at 22; PJM Comments (2018 RM18-9) at 27.
---------------------------------------------------------------------------

    304. Multiple commenters state that, at higher distributed energy
resource penetrations, enhanced equipment and information to increase
coordination and communication between the distribution utility,
distributed energy resource aggregator, and the RTO/ISO will be
necessary and are still in the process of being developed.\727\ TAPS
and EEI argue that distribution utilities will need timely information
on planned dispatch, and that there must be a realistic timeline for
preventing a dispatch and notifying the distributed energy resource
aggregator or the RTO/ISO if a dispatch would adversely affect retail
service.\728\
---------------------------------------------------------------------------

    \727\ See, e.g., Advanced Energy Management Comments (2018 RM18-
9) at 21-22; NYISO Indicated Transmission Owners Comments (2018
RM18-9) at 23; Pacific Gas & Electric Comments (2018 RM18-9) at 22-
23; PJM Comments (2018 RM18-9) at 27; TAPS Comments (2018 RM18-9) at
14.
    \728\ EEI Comments (2018 RM18-9) at 12; TAPS Comments (2018
RM18-9) at 14.
---------------------------------------------------------------------------

    305. Some commenters address the role of the distribution utility
in ongoing operational coordination. Advanced Energy Economy and EEI
state that the distribution utility should be made aware of all
information collected by the aggregator.\729\ More fundamentally, EEI
comments that the distribution utility is in the best position to serve
as the coordinator of distribution operations to ensure the complete
provision of information is being provided to all parties.\730\
---------------------------------------------------------------------------

    \729\ Advanced Energy Economy Comments (2018 RM18-9) at 11; EEI
Comments (2018 RM18-9) at 17.
    \730\ EEI Comments (2018 RM18-9) at 17.
---------------------------------------------------------------------------

    306. Several commenters offer suggestions or request guidance on
aspects of ongoing coordination. Avangrid advocates that all
communication during ongoing coordination be channeled through
distributed energy resource aggregators.\731\ Furthermore, Avangrid
states that distributed energy resource aggregators should assume the
responsibility for the performance of their aggregated resource and be
responsible for any costs incurred by distribution utilities to
mitigate and resolve power quality issues caused by distributed energy
resources. TeMix states that dispatch of end customer load, distributed
generation, and storage must be coordinated with the operators of the
distribution grid circuits, which can be complex.\732\
---------------------------------------------------------------------------

    \731\ Avangrid Comments (RM16-23) at 17.
    \732\ TeMix Comments (RM16-23) at 4.
---------------------------------------------------------------------------

    307. Several commenters claim that the RTO/ISO tariffs should be
less specific about what is required for ongoing coordination processes
and rules. ISO-NE states that the Commission should not be overly
prescriptive regarding the level of detail required in each RTO/ISO
tariff regarding coordination among these entities on operational
coordination, and requests that the Commission allow each RTO/ISO to
develop these requirements in conjunction with stakeholders.\733\
Pacific Gas & Electric states that it may be appropriate to include
high-level requirements for information sharing and operational
coordination, but more technical issues associated with distributed
energy resource aggregation implementation are fluid and evolving, and
thus tariff language may not be flexible or adaptable enough to account
for needed useful, timely changes.\734\ Advanced Energy Economy and
Union of Concerned Scientists emphasize that ongoing coordination
already occurs with other resources, such as remote and dispersed
hydroelectric generation, and argue that existing protocols are
sufficient.\735\
---------------------------------------------------------------------------

    \733\ ISO-NE Comments (RM16-23) at 55.
    \734\ Pacific Gas & Electric Comments (RM16-23) at 22.
    \735\ Advanced Energy Economy Comments (RM16-23) at 38; Union of
Concerned Scientists Comments (RM16-23) at 9.
---------------------------------------------------------------------------

    308. Most commenters agree that distribution utilities should have
the right to override RTO/ISO dispatch instructions for distributed
energy resources located on their distribution systems to resolve or
avoid distribution

reliability issues.\736\ Lorenzo Kristov indicates that the manner in
which a distribution utility can override a dispatch instruction should
be clarified so that distributed energy resource providers will be
better able to estimate their risk of being curtailed due to
distribution system conditions.\737\ NYISO Indicated Transmission
Owners state that the distribution utility should communicate potential
issues with dispatch schedules to the distributed energy resource
aggregators to provide them with an opportunity to re-adjust the
distributed energy resource aggregation dispatch schedule.\738\
Conversely, Stem argues that, because a distribution utility does not
have visibility into the exact distribution level impacts of a
wholesale market dispatch, the distribution utility should not be able
to override a dispatch.\739\
---------------------------------------------------------------------------

    \736\ See, e.g., California Commission Comments (2018 RM18-9) at
18; Duquesne Comments (2018 RM18-9) at 7; NYISO Indicated
Transmission Owners Comments (2018 RM18-9) at 23; Pacific Gas &
Electric Comments (2018 RM18-9) at 24; SunRun Comments (2018 RM18-9)
at 5-6; TAPS Comments (2018 RM18-9) at 29.
    \737\ Lorenzo Kristov Comments (2018 RM18-9) at 17.
    \738\ NYISO Indicated Transmission Owners Comments (2018 RM18-9)
at 23.
    \739\ Stem Comments (2018 RM18-9) at 17.
---------------------------------------------------------------------------

    309. Commenters disagree about how performance penalties should be
applied in the event that a distribution utility overrides an RTO/ISO
dispatch. Several commenters generally argue that distributed energy
resource aggregators should be subject to performance penalties, like
all other resources.\740\ PG&E and PJM assert that non-deliverability
penalties are subject to bilateral and contractual agreement between
the distributed energy resource aggregator and the RTO/ISO.\741\
Developers argue that the aggregator should not be assessed penalties
due to an outage caused by the distribution system operator's
controls.\742\ Distribution utilities argue that, in the event of a
curtailment, they must have protection from liability.\743\
---------------------------------------------------------------------------

    \740\ Monitoring Analytics Comments (2018 RM18-9) at 13; NYISO
Indicated Transmission Owners Comments (2018 RM18-9) at 23; PJM
Comments (2018 RM18-9) at 27-28.
    \741\ Pacific Gas & Electric Comments (2018 RM18-9) at 24; PJM
Comments (2018 RM18-9) at 27-28.
    \742\ Microgrid Resources Coalition Comments (2018 RM18-9) at
15; Stem Comments (2018 RM18-9) at 17; SunRun Comments (2018 RM18-9)
at 6.
    \743\ Eversource Comments (2018 RM18-9) at 11; SoCal Edison
Comments (2018 RM18-9) at 10; TAPS Comments (2018 RM18-9) at 29.
---------------------------------------------------------------------------

c. Commission Determination
    310. We agree with commenters that emphasize the importance of
real-time coordination to ensure safe and reliable operation of the
transmission and distribution systems. Consequently, to implement Sec.
35.28(g)(12)(ii)(g) of the Commission's regulations, we adopt the NOPR
proposal to require each RTO/ISO to revise its tariff to (1) establish
a process for ongoing coordination, including operational coordination,
that addresses data flows and communication among itself, the
distributed energy resource aggregator, and the distribution utility;
and (2) require the distributed energy resource aggregator to report to
the RTO/ISO any changes to its offered quantity and related
distribution factors that result from distribution line faults or
outages. Further, we require each RTO/ISO to revise its tariff to
include coordination protocols and processes for the operating day that
allow distribution utilities to override RTO/ISO dispatch of a
distributed energy resource aggregation in circumstances where such
override is needed to maintain the reliable and safe operation of the
distribution system. These processes that allow distribution utilities
to override RTO/ISO dispatch must be contained in the tariff and must
be non-discriminatory and transparent but still address distribution
utility reliability and safety concerns. We find these operational
coordination requirements will maximize the availability of the
distributed energy resource aggregation consistent with the reliable
and safe operation of the distribution system.
    311. Commenters disagree over the level of specificity needed in
RTO/ISO tariffs and describe different approaches to ongoing
coordination. To account for different regional approaches and to
provide flexibility, we are not prescribing specific protocols or
processes for the RTOs/ISOs to adopt as part of the operational
coordination requirements, but rather we will allow each RTO/ISO to
develop an approach to ongoing operational coordination in compliance
with this final rule.
    312. We also require each RTO/ISO to revise its tariff to apply any
existing resource non-performance penalties to a distributed energy
resource aggregation when the aggregation does not perform because a
distribution utility overrides the RTO's/ISO's dispatch. We find that
this requirement will ensure that distributed energy resource
aggregations are subject to non-performance penalties similarly to
other resources participating in RTO/ISO markets. We note that this
requirement will incent distributed energy resource aggregators to
register individual distributed energy resources on less-constrained
portions of distribution networks in order to minimize the likelihood
of incurring non-performance penalties from the RTO/ISO.
    313. We acknowledge that the timing and location of distribution
utility overrides of dispatch instructions are outside of the control
of distributed energy resource aggregators, and that aggregators may
not have advance notice of overrides during an operating day. In
response to commenters who state that distribution utilities must have
protection from liability in the event of a curtailment or an outage
caused by the distribution system operator's actions to preserve the
safety and reliability of the distribution system,\744\ we decline to
impose any specific liability provisions. Given the arguments advanced
by commenters, we are not persuaded that all distribution providers
face similar liability concerns and that these concerns should be
addressed through standardized liability provisions in RTO/ISO tariffs.
Accordingly, we decline to establish a generic requirement for RTOs/
ISOs with respect to liability provisions.
---------------------------------------------------------------------------

    \744\ See, e.g., Eversource Comments (2018 RM18-9) at 11; SoCal
Edison Comments (2018 RM18-9) at 10; TAPS Comments (2018 RM18-9) at
29.
---------------------------------------------------------------------------

4. Role of Relevant Electric Retail Regulatory Authorities
a. NOPR Proposal
    314. The NOPR did not directly address the role of relevant
electric retail regulatory authorities in coordination with the RTO/
ISO, the distributed energy resource aggregator, and the distribution
utility when a distributed energy resource aggregation seeks to
participate in an RTO/ISO market. However, after the April 2018
technical conference, the Commission sought comment on the role of
relevant electric retail regulatory authorities in coordination.
b. Comments
    315. Most commenters assert that relevant electric retail
regulatory authorities have a central and key role in coordination and
that the responsibilities of such authorities should be focused on
setting rules and supervising distribution utility review of
distributed energy resource participation in aggregations.
    316. Some relevant electric retail regulatory authorities argue
that they must have a central role in coordination to ensure that their
jurisdiction is preserved as it relates to market activities on the
distribution system by distributed energy resources participating in
RTO/ISO markets.\745\

Vice Chairman Place requests that the Commission require the role of
relevant electric retail regulatory authorities be reflected in RTO/ISO
rules, and that, if the Commission sets roles and responsibilities in
RTO/ISO rules, relevant electric retail regulatory authorities should
participate in setting these rules.\746\ In addition, the Organization
of MISO States contends that relevant electric retail regulatory
authorities will need to be aware of coordination efforts and be able
to participate in, and in some cases lead, these efforts based on
jurisdictional scope, prevalence of distributed energy resource
penetration, and state and local policy.\747\ Vice Chairman Place
requests that the relevant electric regulatory authority's ability to
restrict distributed energy resource participation in the wholesale
market be maintained.\748\
---------------------------------------------------------------------------

    \745\ See, e.g., Vice Chairman Place Comments (2018 RM18-9) at
8; Organization of MISO States Comments (2018 RM18-9) at 9-10.
    \746\ Vice Chairman Place Comments (2018 RM18-9) at 8.
    \747\ Organization of MISO States Comments (2018 RM18-9) at 9.
    \748\ Vice Chairman Place Comments (2018 RM18-9) at 5.
---------------------------------------------------------------------------

    317. Distribution utilities generally agree with the comments from
relevant electric retail regulatory authorities and support a central
and key role for relevant electric retail regulatory authorities in
coordinating the participation of aggregated distributed energy
resource in RTO/ISO markets.\749\ Specific roles and responsibilities
for relevant electric retail regulatory authorities identified by
distribution utility commenters include: Supervision of distribution
utility review of distributed energy resource participation in
aggregations; evaluation of distributed energy resources
interconnection to distribution facilities; overseeing issues regarding
distribution system operation and reliability; data sharing; and
setting of metering requirements and related mechanisms to distinguish
wholesale and retail transactions.\750\ Moreover, APPA requests that
the Commission be explicit that nothing in the final rule preempts or
otherwise limits the ability of relevant electric retail regulatory
authorities to adopt rules or tariffs, and to set rates to recover and
allocate the costs associated with facilitating wholesale market
participation by aggregated distributed energy resources.\751\
---------------------------------------------------------------------------

    \749\ See, e.g., APPA Comments (2018 RM18-9) at 2; New York
Indicated Transmission Owners Comments (2018 RM18-9) at 17; Pacific
Gas & Electric Comments (2018 RM18-9) at 16.
    \750\ See, e.g., APPA Comments (2018 RM18-9) at 6; California
Commission Comments (2018 RM18-9) at 1-3, 12; Organization of MISO
States Comments (2018 RM18-9) at 9; Pacific Gas & Electric Comments
(2018 RM18-9) at 16.
    \751\ APPA Comments (2018 RM18-9) at 4.
---------------------------------------------------------------------------

    318. CAISO also comments in support of the role of relevant
electric retail regulatory authorities in facilitating coordination.
Based on its experience in California, CAISO identifies several
possible coordination roles and responsibilities for relevant electric
retail regulatory authorities, including: Establishing metering
requirements for distributed energy resources; establishing rules for
multi-use applications; providing oversight of distribution utility
review of distributed energy resource participation in an aggregation;
and resolving distributed energy resource aggregation
controversies.\752\ As an example of the importance of relevant
electric retail regulatory authorities in distributed energy resource
coordination, CAISO references its Commission-approved distributed
energy resource process that requires that distributed energy resource
providers comply with applicable utility distribution company tariffs,
and operating procedures incorporated into those tariffs, as well as
applicable requirements of the local regulatory authority.\753\
---------------------------------------------------------------------------

    \752\ CAISO Comments (2018 RM18-9) at 13-14.
    \753\ Id. at 14.
---------------------------------------------------------------------------

    319. Conversely, other commenters argue for a somewhat more limited
role for relevant electric retail regulatory authorities. Advanced
Energy Management argues that the role of relevant electric retail
regulatory authorities should be limited to defining non-discriminatory
interconnection procedures that ensure the distribution grid can
accommodate distributed energy resources, and ensuring that the
distributed energy resource can safely deliver energy to the grid.\754\
Icetec asserts that the coordination of distributed energy resource
registrations should not become a vehicle for distribution utilities or
relevant electric retail regulatory authorities to exercise improper
authority over eligibility to participate in wholesale markets.\755\ In
order to forestall this possible intervention, Icetec recommends making
distribution interconnection and registration for wholesale markets
entirely separate processes.\756\
---------------------------------------------------------------------------

    \754\ Advanced Energy Management Comments (2018 RM18-9) at 18.
    \755\ Icetec Comments (2018 RM18-9) at 16.
    \756\ Id. at 18-19.
---------------------------------------------------------------------------

    320. Some commenters urge the Commission to respect state and local
concerns regarding distributed energy resource aggregations. APPA
states that the Commission should afford distribution utilities and
their relevant electric retail regulatory authorities a key role in
coordinating the participation of aggregated distributed energy
resources in RTO/ISO markets.\757\ The Indiana Commission states that
distributed energy resource wholesale participation must work in tandem
with, and not in contravention of, Indiana's utility regulatory
framework.\758\ PJM Utilities Coalition urges the Commission to defer
to relevant electric retail regulatory authorities in fashioning
programs that integrate distributed energy resources into the
distribution system, asserting that states are uniquely positioned to
balance the benefits of distributed energy resource participation in
wholesale markets with costs and other adverse impacts on distribution
systems and retail load.\759\
---------------------------------------------------------------------------

    \757\ APPA Comments (2018 RM18-9) at 2.
    \758\ Indiana Commission Comments (2018 RM18-9) at 2.
    \759\ PJM Utilities Coalition Comments (2018 RM18-9) at 10.
---------------------------------------------------------------------------

    321. The California Commission recommends that, given the
complexity of ensuring just compensation for resources, it is most
appropriate for local regulatory authorities to establish distinctly
defined services and rules to govern coordination across wholesale and
retail markets.\760\
---------------------------------------------------------------------------

    \760\ California Commission Comments (2018 RM18-9) at 10-11.
---------------------------------------------------------------------------

c. Commission Determination
    322. In consideration of the comments and to implement Sec.
35.28(g)(12)(ii)(g) of the Commission's regulations, we require each
RTO/ISO to specify in its tariff, as part of the market rules on
coordination between the RTO/ISO, the distributed energy resource
aggregator, and the distribution utility, how each RTO/ISO will
accommodate and incorporate voluntary relevant electric retail
regulatory authority involvement in coordinating the participation of
aggregated distributed energy resources in RTO/ISO markets. We agree
with commenters that relevant electric retail regulatory authorities
have a role in coordination, i.e., in setting rules at the distribution
level and in RTO/ISO stakeholder discussions. Many relevant electric
retail regulatory authorities indicate strong interest in participating
in such coordination.
    323. We note that the roles delineated in CAISO's Distributed
Energy Resource Provider tariff provisions may provide an example of
how relevant electric retail regulatory authorities could be involved
in coordinating the participation of distributed energy resource
aggregations in RTO/ISO

markets. CAISO's Distributed Energy Resource Provider model requires
that distributed energy resource providers comply with applicable
utility distribution company tariffs and operating procedures
incorporated into those tariffs, as well as applicable requirements of
the local regulatory authority.\761\
---------------------------------------------------------------------------

    \761\ CAISO Comments (2018 RM18-9) at 14.
---------------------------------------------------------------------------

    324. We further note that possible roles and responsibilities of
relevant electric retail regulatory authorities in coordinating the
participation of distributed energy resource aggregations in RTO/ISO
markets may include, but are not limited to: Developing interconnection
agreements and rules; developing local rules to ensure distribution
system safety and reliability, data sharing, and/or metering and
telemetry requirements; overseeing distribution utility review of
distributed energy resource participation in aggregations; establishing
rules for multi-use applications; and resolving disputes between
distributed energy resource aggregators and distribution utilities over
issues such as access to individual distributed energy resource data.
We require that any such role for relevant electric retail regulatory
authorities in coordinating the participation of distributed energy
resource aggregations in RTO/ISO markets be included in the RTO/ISO
tariffs and developed in consultation with the relevant electric retail
regulatory authorities. Further, as noted in Section IV.G, to the
extent that metering and telemetry data comes from or flows through
distribution utilities, we require that RTOs/ISOs coordinate with
distribution utilities and the relevant electric retail regulatory
authorities to establish protocols for sharing metering and telemetry
data that minimize costs and other burdens and address concerns raised
with respect to customer privacy and cybersecurity.
5. Coordination Frameworks
a. NOPR Proposal
    325. As part of its proposal to require coordination in the NOPR,
the Commission sought comment on the level of detail necessary in the
RTO/ISO tariffs to establish a framework for ongoing coordination
between the RTO/ISO, a distributed energy resource aggregator, and the
relevant distribution utility or utilities.\762\
---------------------------------------------------------------------------

    \762\ NOPR, 157 FERC ] 61,121 at P 155.
---------------------------------------------------------------------------

b. Comments
    326. Several commenters propose that the Commission take a more
proactive step and require RTOs/ISOs to establish a broader
coordination structure, or ``coordination framework'' that addresses
all aspects of coordination (planning, distributed energy resource
registration, and operational coordination) between distributed energy
resources, distributed energy resource aggregators, RTOs/ISOs, and
distribution utilities. At the technical conference, panelist Jeffery
Taft, Chief Architect at Pacific Northwest National Laboratory,
described a coordination framework as a way to exchange information and
control signals between the three levels of the U.S. electric system,
namely the bulk power level, the distribution level, and the
distributed energy resource/customer level.\763\ R Street proposes two
purposes for coordination frameworks, namely, to encourage
technological innovation, and to coordinate policies between retail and
wholesale markets.\764\ Stem proposes three coordination frameworks (1)
an operational framework; (2) a planning framework; and (3) a markets
framework.\765\ PJM suggests a framework that focuses on two components
(1) reliability-related items; and (2) administrative items.\766\ CAISO
proposes an all-encompassing process that addresses each element of
distributed energy resource aggregation.\767\
---------------------------------------------------------------------------

    \763\ Technical Conference Transcript at 388.
    \764\ R Street Comments (RM16-23) at 10-11.
    \765\ Stem Comments (2018 RM18-9) at 7-8.
    \766\ PJM Comments (2018 RM18-9) at 19-21, 24.
    \767\ CAISO Comments (RM16-23) at 39-51.
---------------------------------------------------------------------------

    327. Several commenters express the belief that the development of
a coordination framework will ensure that participation of distributed
energy resource aggregations in RTO/ISO markets does not compromise the
reliability or safety of the transmission and distribution
systems.\768\ For example, based on its experience with implementing
CAISO's Distributed Energy Resource Provider framework, Pacific Gas &
Electric states that it is important that RTOs/ISOs coordinate with
distribution utilities.\769\
---------------------------------------------------------------------------

    \768\ See, e.g., id. at 39; Institute for Policy Integrity
Comments (RM16-23) at 9; NYISO Comments (RM16-23) at 19.
    \769\ Pacific Gas & Electric Comments (RM16-23) at 21.
---------------------------------------------------------------------------

    328. R Street Institute argues for a coordination framework that
creates incentives for innovation and deployment of advanced active
network management practices (e.g., real-time operating procedures) and
technologies (e.g., software-enabled communications among control
centers).\770\ E4TheFuture notes that data creation, communications,
and analytics are fundamental to successfully including distributed
energy resources in the organized wholesale electric markets, and that
the technologies and services surrounding these fundamentals and the
standards that will support valuation and aggregation are evolving
rapidly.\771\ E4TheFuture asks the Commission to support the RTOs/ISOs
in creating solutions to nimbly address the rapid development of these
technologies over time.
---------------------------------------------------------------------------

    \770\ R Street Institute Comments (RM16-23) at 10.
    \771\ E4TheFuture Comments (RM16-23) at 2.
---------------------------------------------------------------------------

    329. Several commenters recommend that the Commission not require a
specific coordination framework at this time. Public Interest Groups
argue that the Commission should not specify a particular structure for
coordination frameworks but instead allow the ``laboratories of
innovation'' of state and distribution utilities to develop new
practices and procedures.\772\ Lorenzo Kristov emphasizes that these
coordination efforts are at an early stage, noting that there are no
best practices and no best coordination framework to adopt.\773\ The
California Commission asks that the Commission not establish specific
requirements at this time, but instead to track the development of
frameworks and architectures around the country and document best
practices.\774\
---------------------------------------------------------------------------

    \772\ Public Interest Organizations Comments (2018 RM18-9) at
11-12.
    \773\ Lorenzo Kristov Comments (2018 RM18-9) at 16-17.
    \774\ California Commission Comments (2018 RM18-9) at 12.
---------------------------------------------------------------------------

c. Commission Determination
    330. We believe that, among other benefits, a broader, holistic
approach to coordination--referred to herein as a coordination
framework--could help ensure that different elements of distributed
energy resource aggregations do not work at cross-purposes. Because the
topic of coordination frameworks is still developing and was not fully
considered in this record, we encourage, but do not require, each RTO/
ISO to develop a coordination framework that addresses the needs of its
region.
    331. We note that it may be beneficial for the RTOs/ISOs and their
stakeholders to take into consideration in developing coordination
frameworks the interoperability of new information technology and
communications systems. Such systems will likely need to exchange
mutually recognizable data, and will become more important as
distributed energy resource penetration reaches higher levels. Early
consideration of these issues could help prevent redundancy and
unnecessary costs later.

I. Modifications to List of Resources in Aggregation

a. NOPR Proposal
    332. In the NOPR, the Commission proposed that each RTO/ISO revise
its tariff to allow a distributed energy resource aggregator to modify
the list of resources in its distributed energy resource aggregation
without re-registering all of the resources if the modification will
not result in any safety or reliability concerns.\775\ The Commission
emphasized, however, that, pursuant to other proposed
requirements,\776\ the relevant distribution utility or utilities must
have the opportunity to review the list of individual resources that
are located on their distribution system in a distributed energy
resource aggregation before those resources may participate in RTO/ISO
markets through the aggregation, so that they can assess whether the
resources would be able to respond to RTO/ISO dispatch instructions
without posing any significant risk to the distribution system.\777\
---------------------------------------------------------------------------

    \775\ Id. P 149.
    \776\ See supra Section IV.H.2 (Role of Distribution Utilities).
    \777\ NOPR, 157 FERC ] 61,121 at P 154.
---------------------------------------------------------------------------

b. Comments
    333. Many commenters support the Commission's proposal to allow a
distributed energy resource aggregator to modify its list of resources
without re-registering all of the resources in the distributed energy
resource aggregation.\778\ In support, University of Delaware's EV R&D
Group states that within a substantial aggregation, small residential
electric vehicle interconnection sites might enter and exit the
aggregation even on a daily basis, as new participants and existing
participants change vehicles, homes, or preferences.\779\ However,
NYISO asks the Commission to require the distributed energy resource
aggregator to advise the RTOs/ISOs of any changes to the list of
resources and changes in the aggregation's performance output or
operating characteristics.\780\
---------------------------------------------------------------------------

    \778\ See, e.g., Advanced Microgrid Solutions Comments (RM16-23)
at 8; Avangrid Comments (RM16-23) at 13; CAISO Comments (RM16-23) at
35-37; City of New York Comments (RM16-23) at 9-10; EEI Comments
(RM16-23) at 32-33.
    \779\ University of Delaware's EV R&D Group Comments (2018 RM18-
9) at 2.
    \780\ NYISO Comments (RM16-23) at 18.
---------------------------------------------------------------------------

    334. Many commenters also generally support the proposal to allow
distribution utilities to review the list of resources when it is
revised.\781\ Mensah states that any review should be streamlined as
much as possible.\782\ Stem stresses the importance of transparent
standards of review and argues that opaque review methodologies create
an unreasonable barrier to participation of distributed energy
resources.\783\ Additionally, many commenters emphasize the need to
determine whether any changes in the list of resources affect safety
and reliability at both the transmission and distribution levels.\784\
Dominion adds that the review process to determine the impacts of a
change in the list of resources on safety and reliability must be
established in a final rule.\785\
---------------------------------------------------------------------------

    \781\ See, e.g., APPA/NRECA Comments (RM16-23) at 45; EEI
Comments (RM16-23) at 32-33; Mensah Comments (RM16-23) at 4; MISO
Transmission Owners Comments (RM16-23) at 23; NYISO Comments (RM16-
23) at 18.
    \782\ Mensah Comments (RM16-23) at 4.
    \783\ Stem Comments (RM16-23) at 15.
    \784\ Avangrid Comments (RM16-23) at 12-13; CAISO Comments
(RM16-23) at 34-35; Dominion Comments (RM16-23) at 11; Mensah
Comments (RM16-23) at 4; Pacific Gas & Electric Comments (RM16-23)
at 20.
    \785\ Dominion Comments (RM16-23) at 11.
---------------------------------------------------------------------------

c. Commission Determination
    335. We adopt the NOPR proposal, as modified below, and add Sec.
35.28(g)(12)(ii)(e) to the Commission's regulations to require each
RTO/ISO to establish market rules that address modification to the list
of resources in a distributed energy resource aggregation.
    336. We require each RTO/ISO to revise its tariff to specify that
distributed energy resource aggregators must update their lists of
distributed energy resources in each aggregation (i.e., reflect
additions and subtractions from the list) and any associated
information and data,\786\ but that, when doing so, distributed energy
resource aggregators will not be required to re-register or re-qualify
the entire distributed energy resource aggregation. We note that any
modification triggers the distribution utility review process
(discussed in Section IV.H.2 above). This requirement is necessary to
ensure that the RTOs/ISOs have accurate and current information about
the individual distributed energy resources that make up a distributed
energy resource aggregation and to allow distribution utilities the
opportunity to review those modifications.\787\ We find that this
requirement will ensure minimal administrative burden, while protecting
safety and reliability at both the transmission and distribution
levels.
---------------------------------------------------------------------------

    \786\ See supra Section IV.F (Information and Data
Requirements).
    \787\ See supra Section IV.H.2 (Role of Distribution Utilities).
---------------------------------------------------------------------------

    337. While any modification of a distributed energy resource
aggregation will trigger distribution utility review, we clarify that
it may be appropriate for each RTO/ISO to abbreviate the distribution
utility's review of modifications to the distributed energy resource
aggregations. As the Commission explained in the NOPR, the requirements
for modifying the list of resources in a distributed energy resource
aggregation can present a barrier to the participation of distributed
energy resource aggregations in RTO/ISO markets.\788\ We find that the
incremental impacts on RTO/ISO markets and operations that would result
from the addition or removal of individual distributed energy resources
from a distributed energy resource aggregation, after the initial
registration, are likely to be minimal and thus individual distributed
energy resources should generally be able to enter and exit distributed
energy resource aggregations participating in RTO/ISO markets without
impairing safety and reliability. Because the impacts of modifications
may often be minimal, an abbreviated review process should be
sufficient for the distribution utility to identify the cases where an
addition to the list of resources might pose a safety or reliability
concern. As stated in Section IV.A.3, modifications to the list of
resources in a distributed energy resource aggregation, and the
resulting distribution utility and RTO/ISO review of those changes,
could occasionally indicate changes to the electrical characteristics
of the distributed energy resource aggregation that are significant
enough to potentially adversely impact the reliability of the
distribution or transmission systems and justify restudy of the full
distributed energy resource aggregation.\789\ However, even in such
circumstances, we do not believe that participation of the distributed
energy resource aggregation will need to be paused during the review of
modifications or restudy. Aggregators should be able to continue to bid
the unmodified portion of their aggregation into RTO/ISO markets. For
example, in the event that a resource withdraws from an aggregation,
the aggregator could continue to participate in the market by modifying
its bidding parameters to reflect the aggregation's changed capability
to perform.
---------------------------------------------------------------------------

    \788\ NOPR, 157 FERC ] 61,121 at P 148.
    \789\ See supra P 99.
---------------------------------------------------------------------------

    338. Finally, to the extent that an RTO/ISO requires distributed
energy resource aggregators to provide information on the physical or
operational characteristics of its distributed energy resource
aggregation (pursuant to Section IV.F), we require

each RTO/ISO to revise its tariff to ensure that distributed energy
resource aggregators must update such information if any modification
to the list of resources participating in the aggregation results in a
change to the aggregation's performance. We find that this requirement
will ensure that the RTOs/ISOs have accurate and current information
about the physical and operational characteristics of the distributed
energy resource aggregations that are participating in their markets,
with minimal administrative burden.

J. Market Participation Agreements

1. NOPR Proposal
    339. In the NOPR, the Commission stated that, in order to ensure
that a distributed energy resource aggregator complies with all
relevant provisions of the RTO/ISO tariffs, it must execute an
agreement with the RTO/ISO that defines its roles and responsibilities
and its relationship with the RTO/ISO before it can participate in RTO/
ISO markets.\790\ The Commission explained that, because the individual
resources in these distributed energy resource aggregations will likely
fall under the purview of multiple organizations (e.g., the RTO/ISO,
state regulatory commissions, relevant distribution utilities, and
local regulatory authorities), these agreements must also require that
the distributed energy resource aggregator attest that its distributed
energy resource aggregation is compliant with the tariffs and operating
procedures of the distribution utilities and the rules and regulations
of any other relevant regulatory authority.\791\ The Commission
therefore proposed that each RTO/ISO revise its tariff to include a
market participation agreement for distributed energy resource
aggregators. The Commission did not propose specific requirements for
such agreements in the NOPR; instead, the Commission sought comment on
the information these agreements should contain.
---------------------------------------------------------------------------

    \790\ NOPR, 157 FERC ] 61,121 at P 157.
    \791\ The Commission explained that this may include any laws or
regulations of the relevant retail regulatory authority that do not
permit demand response resources to participate in RTO/ISO markets
as the Commission considered in Order No. 719. Id. n.238 (citing
Order No. 719, 125 FERC ] 61,071 at P 154).
---------------------------------------------------------------------------

    340. The Commission also explained that, while these agreements
will define the roles and responsibilities of the distributed energy
resource aggregator, they should not limit the business models under
which distributed energy resource aggregators can operate.\792\
Therefore, the Commission proposed that the market participation
agreement for distributed energy resource aggregators that each RTO/ISO
must include in its tariff may not restrict the business models that
distributed energy resource aggregators may adopt. The Commission
stated that market participation agreements for distributed energy
resource aggregators should not preclude distribution utilities,
cooperatives, or municipalities from aggregating distributed energy
resources on their systems or even microgrids from participating in the
RTO/ISO markets as a distributed energy resource aggregation.
---------------------------------------------------------------------------

    \792\ Id. P 158.
---------------------------------------------------------------------------

    341. After the April 2018 technical conference, the Commission
sought comment on whether the proposed use of market participation
agreements addresses state and local regulator concerns about the role
of distribution utilities in the coordination and registration of
distributed energy resources in aggregations. The Commission further
asked whether the proposed provisions in the market participation
agreements that require that distributed energy resource aggregators
attest that they are compliant with the tariffs and operation
procedures of distribution utilities and state and local regulators are
sufficient to address such concerns.\793\
---------------------------------------------------------------------------

    \793\ See Notice Inviting Post-Technical Conference Comments at
6.
---------------------------------------------------------------------------

2. Comments
    342. All commenters that address this topic agree that market
participation agreements between RTOs/ISOs and distributed energy
resource aggregators are necessary. However, commenters disagree on the
structure of these agreements.
    343. Many commenters support the NOPR proposal to require a market
participation agreement for distributed energy resource
aggregators.\794\ ISO-NE, however, urges the Commission to exclude from
a final rule any specific directives regarding market participation
agreements for aggregations of distributed energy resources, including
requiring attestation from the aggregator.\795\ ISO-NE states that such
directives are not needed because its current generic market
participant agreement is sufficient as a ``simple and proven'' approach
to accommodate distributed energy resource aggregations and because
other coordination processes, including the asset registration process,
may be preferable mechanisms for gathering and verifying information
related to a participant's assets.
---------------------------------------------------------------------------

    \794\ See, e.g., APPA/NRECA Comments (RM16-23) at 46; California
Commission Comments (2018 RM18-9) at 7; Mensah Comments (RM16-23) at
4; NYISO Comments (RM16-23) at 20; PJM Comments (RM16-23) at 28-29;
SoCal Edison Comments (2018 RM18-9) at 2, 10-11.
    \795\ ISO-NE Comments (RM16-23) at 56-57.
---------------------------------------------------------------------------

    344. Some commenters express concerns about the sufficiency of
market participation agreements to address state and local regulatory
concerns. The New York Commission, for example, cautions that a rule
addressing the nature and use of market participation agreements should
not create barriers that hinder a state regulator's ability to guide
the ways that distributed energy resource aggregations can be formed,
registered, managed, and operated, including the role of a distribution
utility in the coordination and registration of distributed energy
resource aggregations.\796\ Organization of MISO States asserts that
concerns remain about the ability to effectively police compliance with
participation agreements, and that in order to comply, new lines of
communication between distribution utilities, distributed energy
resource aggregators, and the RTO/ISO will need to be developed.\797\
---------------------------------------------------------------------------

    \796\ New York Commission Comments (2018 RM18-9) at 13.
    \797\ Organization of MISO States Comments (2018 RM18-9) at 4.
---------------------------------------------------------------------------

    345. Organization of MISO States asserts that further participation
agreements will need to be crafted to accommodate ever-evolving
technology changes and to avoid such initial agreements becoming
barriers to innovation. It asserts that the RTO/ISO stakeholder process
is the appropriate place for these modifications to participation
agreements to occur.\798\
---------------------------------------------------------------------------

    \798\ Id. at 4-5.
---------------------------------------------------------------------------

    346. Commenters express varying recommendations for the structure
of an agreement or agreements and the parties required to enter them.
AES Companies suggest a three-party agreement between the aggregator,
distribution utility, and RTO/ISO is appropriate,\799\ while Pacific
Gas & Electric suggests two two-party agreements (one agreement between
aggregator and RTO/ISO, and another between aggregator and distribution
utility).\800\ APPA/NRECA and MISO Transmission Owners favor the
utilities being party to the agreements and argue that the agreement
should demonstrate that the aggregation has been authorized by the
utility or its relevant regulatory authority.\801\ CAISO also suggests
that

the Commission consider whether a separate Commission-jurisdictional
agreement should apply between a distribution utility and a distributed
energy resource aggregator.\802\
---------------------------------------------------------------------------

    \799\ AES Companies Comments (RM16-23) at 12-13, 49.
    \800\ Pacific Gas & Electric Comments (RM16-23) at 24-26.
    \801\ APPA/NRECA Comments (RM16-23) at 46-47; MISO Transmission
Owner Comments (RM16-23) at 26-27.
    \802\ CAISO Comments (RM16-23) at 51-52.
---------------------------------------------------------------------------

    347. Some commenters request flexibility, further guidance from the
Commission, and/or the participation of other parties in crafting
market participation agreements. Most RTOs/ISOs suggest that some of
their existing agreements may be applicable but argue for flexibility
in establishing appropriate agreements.\803\ Pacific Gas & Electric
also argues that each RTO/ISO should be allowed to craft agreements
appropriate for its markets.\804\ NARUC requests that, for states that
do allow third party aggregations, the Commission only provide broad
policy direction in a final rule and allow the RTOs/ISOs to develop
with state input the necessary details for implementation.\805\ EEI
similarly argues that RTOs/ISOs and distribution utilities should
develop market participation agreements in conjunction with their
stakeholders.\806\ Xcel Energy Services goes further, stating that the
details of market participation agreements will need to be addressed by
states.\807\ PJM asserts that further clarification as to the role of
electric distribution companies and other relevant regulatory
authorities is needed for PJM to finalize the appropriate market
participant agreement design.\808\ Massachusetts Municipal Electric
requests sufficient flexibility for the agreement to accommodate
different conditions at different distribution utilities.\809\ Mensah,
however, states that the participation agreement, and any necessary
amendments, should be standardized, streamlined, and automated as much
as possible to avoid unnecessary costs.\810\
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    \803\ Id.; ISO-NE Comments (RM16-23) at 56-57; MISO Comments
(RM16-23) at 26-27; NYISO Comments (RM16-23) at 20; PJM Comments
(RM16-23) at 28-29.
    \804\ See Pacific Gas & Electric Comments (RM16-23) at 24.
    \805\ NARUC Comments (RM16-23) at 5.
    \806\ EEI Comments (RM16-23) at 39.
    \807\ Xcel Energy Services Comments (RM16-23) at 29.
    \808\ PJM Comments (RM16-23) at 29.
    \809\ Massachusetts Municipal Electric Comments (RM16-23) at 5.
    \810\ Mensah Comments (RM16-23) at 4.
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    348. Some commenters advocate for specific requirements in market
participation agreements. EEI argues that the agreements should ensure
that distributed energy resource aggregators are subject to comparable
requirements as other resources.\811\ AES Companies assert that an
agreement should only obligate the aggregator to conform to the
appropriate tariff rules and a proportionate share of essential
reliability services as determined by each RTO/ISO and its
stakeholders.\812\ Pacific Gas & Electric states that an agreement
between the aggregator and the distribution utility should include
detailed requirements regarding operational coordination, mitigation of
system impacts, cost allocation, and notification of changes to the
aggregation.\813\
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    \811\ EEI Comments (RM16-23) at 39.
    \812\ AES Companies Comments (RM16-23) at 12-13.
    \813\ Pacific Gas & Electric Comments (RM16-23) at 24-25.
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    349. Avangrid emphasizes that the market participation agreement
should be explicit that the aggregator is a wholesale market
participant required to comply with the provisions in the tariff,
including operational requirements.\814\ MISO Transmission Owners and
TAPS support requiring the distributed energy resource aggregator to
attest to compliance with distribution utility tariffs and operating
procedures and with the rules and regulations of any other relevant
regulatory authority.\815\ APPA/NRECA support requiring aggregators to
demonstrate, rather than simply attest, that the relevant electric
retail regulatory authority has authorized wholesale market
participation by the resources in the aggregation, and to include in
the market participation agreement requirements for notice to
distribution utilities of any changes in resources and for compliance
by the aggregator and its resources with the tariffs and operating
procedures of the relevant distribution utilities.\816\ MISO
Transmission Owners make similar arguments in their comments.\817\
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    \814\ Avangrid Comments (RM16-23) at 18.
    \815\ MISO Transmission Owners Comments (RM16-23) at 19 (citing
NOPR, 157 FERC ] 61,121 at P 157); TAPS Comments (RM16-23) at 13-14.
    \816\ APPA/NRECA Comments (RM16-23) at 47.
    \817\ MISO Transmission Owners Comments (RM16-23) at 19, 26-27.
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    350. On the other hand, Tesla/SolarCity contend that, because many
individual distributed energy resources may not be new nor installed by
the aggregator, any attestation requirement should only require
aggregators to state that, ``to the best of their knowledge,'' the
distributed energy resources in the aggregation are compliant with
distribution company tariffs and operating procedures and relevant
regulatory authority rules and regulations.\818\
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    \818\ Tesla/SolarCity Comments (RM16-23) at 31.
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    351. APPA/NRECA, Open Access Technology, MISO Transmission Owners,
and NARUC support the NOPR proposal that market participation
agreements should not restrict the business models for distributed
energy resource aggregators, though the latter two commenters condition
their support on the distributed energy resource aggregation having
been permitted by the state regulatory body and, if applicable, the
distribution utility.\819\ NARUC supports the NOPR language that allows
a scenario in which distribution utilities can act as aggregators so
that the states can provide oversight of the terms and conditions of
their relationship with distributed energy resources and customers,
while allowing participation of the aggregator in RTO/ISO markets.\820\
On the other hand, Xcel Energy Services asserts that the NOPR language
may be too vague to protect yet-to-be-designed aggregator business
models and also could inappropriately limit the ability of RTOs/ISOs to
prevent business models that could threaten grid reliability.\821\
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    \819\ APPA/NRECA Comments (RM16-23) at 47-48; MISO Transmission
Owners Comments (RM16-23) at 26 (citing NOPR, 157 FERC ] 61,121 at P
158); NARUC Comments (RM16-23) at 5 (citing NOPR, 157 FERC ] 61,121
at P 158); Open Access Technology Comments (RM16-23) at 4.
    \820\ NARUC Comments (RM16-23) at 5 (citing NOPR at P158).
    \821\ Xcel Energy Services Comments (RM16-23) at 29.
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3. Commission Determination
    352. We add Sec.  35.28(g)(12)(ii)(h) to the Commission's
regulations and adopt the NOPR proposal to require each RTO/ISO to
establish market rules that address market participation agreements for
distributed energy resource aggregators. Specifically, we require each
RTO/ISO to revise its tariff to include a standard market participation
agreement that defines the distributed energy resource aggregator's
role and responsibilities and its relationship with the RTO/ISO and
that an aggregator is required to execute before it can participate in
the RTO/ISO markets. We also adopt the NOPR proposal that this market
participation agreement must include an attestation that the
distributed energy resource aggregator's aggregation is compliant with
the tariffs and operating procedures of the distribution utilities and
the rules and regulations of any relevant electric retail regulatory
authority. As the Commission explained in the NOPR, these requirements
are necessary to ensure that a distributed energy resource aggregator
complies with all relevant

provisions of the RTO/ISO tariffs, the tariffs and operating procedures
of the distribution utilities, and the rules and regulations of any
other relevant electric retail regulatory authority.\822\ These
requirements are also supported by a general consensus among commenters
that market participation agreements are necessary and, as expressed by
some commenters, that the use of market participation agreements could
help address state and local regulatory concerns.
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    \822\ See NOPR, 157 FERC ] 61,121 at P 157.
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    353. Also, as proposed in the NOPR, we require that the market
participation agreements that the RTOs/ISOs include in their tariffs
not limit the business models under which distributed energy resource
aggregators can operate. Allowing distributed energy resource
aggregators with varying business models to be included in such
agreements should increase the ability of the distributed energy
resource aggregators, and resources within such aggregations, to
participate in the RTO/ISO markets.
    354. With the exception of the attestation requirement and
prohibition of business model limitations described above, we will not
specify the exact terms and conditions of the market participation
agreements. This approach will give the RTOs/ISOs and stakeholders
flexibility to develop appropriate agreements, and increase the ability
of the distributed energy resource aggregators, and resources within
such aggregations, to participate in RTO/ISO markets by better
tailoring agreements to the operating conditions and needs of those
markets, and thereby help to enhance competition in the markets.
Commenters, including the RTOs/ISOs, express a variety of views about
the specific requirements that should be included in such agreements
and the potential need for additional agreements, and most commenters
request flexibility in ability to design these agreements. We believe
that this flexibility will provide RTOs/ISOs working with their
stakeholders the ability to design the appropriate agreements for their
regions and the reasonableness of such proposals will be evaluated in
each RTO/ISO-specific compliance proceeding.
    355. We also are not persuaded by the suggestion of some commenters
that we require additional agreements to help facilitate participation
by distributed energy resource aggregations in RTO/ISO markets, or that
we require additional entities, such as distribution utilities,
distribution system operators, or relevant regulatory authorities, to
be parties to the market participation agreements that we are
requiring. We believe that the attestation requirement that we adopt in
this final rule will help ensure distributed energy resource aggregator
compliance with the tariffs and operating procedures of distribution
utilities and the rules and regulations of other relevant regulatory
authorities. RTOs/ISOs and their stakeholders are best equipped to
determine the nature and composition of, and counterparties to,
additional agreements. We note that RTOs/ISOs and stakeholders may
choose to include additional parties or incorporate related agreements
in the proposed market participation agreements. Moreover, as discussed
above in Sections IV.H.2 and IV.I, our directive to RTOs/ISOs to
establish market rules on coordination will address coordination among
any parties not included as parties to the market participation
agreements (i.e., the distribution utility and the relevant state and
local regulators), including the ability of distribution utilities to
review modifications.\823\
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    \823\ See supra Section IV.H.1 (Market Rules on Coordination).
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    356. In response to Xcel Energy Services' assertion that the NOPR
proposal to prohibit RTOs/ISOs from limiting the business models under
which distributed energy resource aggregators can operate does not
protect future business models and may allow other business models that
threaten grid reliability, we disagree. Instead, it is responsive to
many commenters' requests to avoid undue Commission specificity with
respect to the required contents of market participation agreements to
allow RTOs/ISOs sufficient regional flexibility in developing these
agreements, including to address any business model challenges and any
implications for grid reliability. Further, we note that Xcel Energy
Services does not provide examples or support for its concerns that
certain business models could threaten grid reliability or future
business models. We think permitting RTO/ISO prohibitions against
certain business models in their market participation agreements is not
necessary given a distributed energy resource aggregator's duty to
adhere to RTO/ISO market rules, the attestation requirement that we
require to be included in the market participation agreements, as well
as the ability of RTOs/ISO to craft any necessary safeguards short of
business model prohibitions within these agreements. In response to
PJM's assertion that further clarification about the role of
distribution utilities and other relevant regulatory authorities is
needed for PJM to finalize the appropriate market participant agreement
design, we believe that we have provided such clarification to the
extent possible, elsewhere within this final rule.\824\
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    \824\ See supra Section IV.C.3 (Double Counting of Services).
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K. Compliance

    357. In the NOPR, the Commission proposed to require each RTO/ISO
to submit a compliance filing within six months of the date the final
rule in this proceeding is published in the Federal Register. The
Commission stated that it believed that six months is sufficient for
each RTO/ISO to develop and submit its compliance filing, but
recognized that implementation of the reforms proposed in the NOPR
could take more time due to the changes that may be necessary to each
RTO's/ISO's modeling and dispatch software. Therefore, the Commission
proposed to allow 12 months from the date of the compliance filing for
implementation of the proposed reforms to become effective.
1. Comments
    358. Most RTO/ISO commenters, with the exception of PJM, indicate
that they would need to modify their existing rules to appropriately
integrate distributed energy resource aggregations.\825\ PJM states
that it does not require significant modifications to dispatch
software, communication platforms, or automation tools, as PJM already
has developed many tools that can be adapted for distributed energy
resource aggregations, but that improved coordination with electric
distribution providers may be a challenge.\826\
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    \825\ See CAISO Comments (2018 RM18-9) at 4; PJM Comments (2018
RM18-9) at 8-9.
    \826\ PJM Comments (2018 RM18-9) at 8-9.
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    359. Eversource recommends that the Commission provide sufficient
time for proposals to be developed through the stakeholder process on
this complex issue.\827\ Dominion suggests a pilot project should be
undertaken first.\828\ Duquesne Light notes that distributed energy
resource integration should proceed in a ``measured'' way to assess
operational, reliability, safety and cost implications, noting that
some new technologies may require observation and testing before being
deemed capable of providing expanded services such as being deemed a
capacity resource.\829\ Distributed energy resource developers and
their advocates, as well as some

state commissions, believe that the proposal is timely and should not
be delayed, especially given the rapid pace of technological
advancement.\830\
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