aggregations after determining whether a distributed energy resource
that is proposing to participate in a distributed energy resource
aggregation is (1) registered to provide the same services either
individually or as part of another RTO/ISO market participant; \414\ or
(2) included in a retail program to reduce a utility's or other load
serving entity's obligations to purchase services from the RTO/ISO
market.
---------------------------------------------------------------------------

    \414\ For example, as part of another distributed energy
resource aggregation, a demand response resource, and/or a
standalone distributed energy resource.
---------------------------------------------------------------------------

    162. This restriction is similar to that adopted by the Commission
in Order No. 719 in the context of aggregations of demand response,
which states that ``[a]n RTO or ISO may place appropriate restrictions
on any customer's participation in an [aggregation of retail
customers]-aggregated demand response bid to avoid counting the same
demand response resource more than once.'' \415\ In addition, as
discussed in Section IV.A.2 above, relevant electric retail regulatory
authorities may decide whether to permit the customers of small
utilities to participate in the RTO/ISO markets through distributed
energy resource aggregations and relevant electric retail regulatory
authorities continue to have authority to condition participation in
their retail distributed energy resource programs on those resources
not also participating in RTO/ISO markets,\416\ which should allow them
to mitigate any double-compensation concerns.
---------------------------------------------------------------------------

    \415\ Order No. 719, 125 FERC ] 61,071 at P 158.
    \416\ Supplemental Comments of Arkansas Commission (RM16-23-000)
at 2.
---------------------------------------------------------------------------

    163. We agree with many commenters that the NOPR proposal could
undermine the effectiveness of existing retail and wholesale programs,
render current RTO/ISO market participants ineligible to continue their
participation, and reduce competition in RTO/ISO markets, which could
lead to unjust and unreasonable rates. Further, there may be instances
in which an individual distributed energy resource could technically,
reliably, and economically provide multiple, distinct services at
wholesale and retail levels, and therefore preventing it from doing so
may undermine the final rule by creating a new barrier to participation
in RTO/ISO markets, thereby inhibiting competition and decreasing
reliability. We believe the modified rules that we adopt herein will
enable efficient outcomes in RTO/ISO markets by capturing the full
value of distributed energy resources and enabling efficient resource
allocation while also requiring RTOs/ISOs to address double-counting
concerns.
    164. In addition to addressing the potential market and reliability
impacts of the NOPR proposal described above, we find that the reforms
we adopt here are consistent with the Commission's determination that a
single distributed energy resource can participate in both retail and
wholesale programs and be compensated in each for providing
``distinctly different services.'' \417\ While commenters suggest
several tests to identify duplicate services, the record does not
include a consistent or practical method for the Commission to
universally define ``same services'' across wholesale and retail
markets, and we therefore do not believe that it is appropriate to
prescribe an approach across all RTOs/ISOs. For this reason, we will
grant RTOs/ISOs regional flexibility with respect to the restrictions
they propose in their tariffs to minimize market impacts caused by the
double counting of services provided by distributed energy resources in
the RTO/ISO markets.
---------------------------------------------------------------------------

    \417\ N.Y. Pub. Serv. Comm'n v. N.Y. Indep. Sys. Operator, Inc.,
158 FERC ] 61,137 at P 33.
---------------------------------------------------------------------------

4. Minimum and Maximum Size of Aggregation
a. NOPR Proposal
    165. In the NOPR, the Commission proposed that distributed energy
resource aggregations must meet any minimum size requirements of the
participation model under which they elect to participate in RTO/ISO
markets.\418\ The Commission stated that, for example, if a distributed
energy resource aggregator decides to register using the participation
model for electric storage resources given the cumulative physical and
operational characteristics of the distributed energy resources in its
aggregation, then its distributed energy resource aggregation would be
required to meet the 100 kW minimum size requirement that the
Commission required for that participation model. The Commission stated
that, alternatively, if the distributed energy resource aggregator
registered as a generator, then its aggregation would be required to
meet the minimum size requirement for the generator participation model
in the relevant RTO/ISO market.
---------------------------------------------------------------------------

    \418\ NOPR, 157 FERC ] 61,121 at P 136.
---------------------------------------------------------------------------

    166. After the April 2018 technical conference, the Commission
sought comments on whether reducing the minimum size of distributed
energy resource aggregations to participate in RTO/ISO markets would
help alleviate concerns about requiring distributed energy resource
aggregations to locate only at a single node.\419\
---------------------------------------------------------------------------

    \419\ Notice Inviting Post-Technical Conference Comments at 3.
---------------------------------------------------------------------------

b. Comments
    167. SPP agrees with the Commission's proposal for aggregations to
meet any minimum size requirements of the participation model under
which they elect to participate, noting that that is consistent with
SPP's registration requirements for any resource type.\420\
---------------------------------------------------------------------------

    \420\ SPP Comments (RM16-23) at 16.
---------------------------------------------------------------------------

    168. In contrast, several commenters argue that the Commission
should require RTOs/ISOs to adopt a minimum size requirement of 100 kW
for all distributed energy resource aggregations, regardless of the
participation model in which they elect to participate.\421\ NYISO
states that it is currently working with stakeholders on a distributed
energy resource market design proposal that would set a minimum
aggregation size of 100 kW

because this is the smallest increment that NYISO believes it can
accurately model, commit, and dispatch with its current grid operations
software.\422\ Some of those commenters contend that a minimum size
requirement above 100 kW runs counter to the NOPR's goal of improving
competition in the wholesale markets while avoiding excessive
registration of individual small resources and modeling
complexity.\423\ Tesla/SolarCity state that a minimum size requirement
of 100 kW across all markets would avoid any confusion caused by
artificial differences between the electric storage and distributed
energy resource aggregation participation models.\424\ Some commenters
argue that minimum size requirements greater than 100 kW pose a
significant barrier to entry.\425\ Direct Energy disagrees with ISO-
NE's assertion at the technical conference that there is no real need
for aggregation because there is no minimum size limitation for
participating in ISO-NE's markets, stating that while Direct Energy is
supportive of establishing a framework without minimum size limitations
for distributed energy resources, the lack of such limitations should
not serve as an alternative for aggregation.\426\ NRG states that 100
kW is an efficient minimum size requirement but that the participation
model for distributed energy resource aggregations should set minimum
resource participation thresholds only to the extent necessary to
accommodate existing metering and data management systems
infrastructure.\427\
---------------------------------------------------------------------------

    \421\ See, e.g., Advanced Energy Management Comments (RM16-23)
at 16-17, 25-26; Mensah Comments (RM16-23) at 3; Efficient Holdings
Comments (RM16-23) at 8; NYISO Comments (RM16-23) at 15-16; Tesla/
SolarCity Comments (RM16-23) at 17, 26.
    \422\ NYISO Comments (RM16-23) at 15-16; PJM Comments (RM16-23)
at 27. On January 23, 2020, the Commission accepted NYISO's tariff
revisions establishing a new participation model for aggregations of
resources, including distributed energy resources, which requires
that each energy, ancillary service, and capacity transaction on
behalf of an aggregation must have a minimum offer of 100 kW, and if
an aggregation offers a combination of withdrawals, injections, and/
or demand reductions, it must offer at least 100 kW of each. See
NYISO Aggregation Order, 170 FERC ] 61,033 at P 14.
    \423\ Advanced Energy Management Comments (RM16-23) at 16-17;
Advanced Energy Economy Comments (RM16-23) at 51-52 (citing NOPR,
157 FERC ] 61,121 at P 94); California Energy Storage Alliance
Comments (RM16-23) at 7-8.
    \424\ Tesla/SolarCity Comments (RM16-23) at 26.
    \425\ Fresh Energy/Sierra Club/Union of Concerned Scientists
Comments (RM16-23) at 2 (citing MISO Market Subcommittee
Presentation, November 29th, 2016, https://www.misoenergy.org/Library/Repository/Meeting%20Material/Stakeholder/MSC/2016/20161129/20161) (stating that the integration of distributed energy resources
and smaller-scale resources is within the ``probable limit of
current systems''); Tesla/SolarCity Comments (RM16-23) at 27 (citing
N.Y. Indep. Sys. Operator, Inc., 155 FERC ] 61,166 (2016)).
    \426\ Direct Energy Comments (2018 RM18-9) at 8-9 (citing
Technical Conference Transcript at 22).
    \427\ NRG Comments (RM16-23) at 12; NRG Comments (2018 RM18-9)
at 4.
---------------------------------------------------------------------------

    169. Several commenters argue that the Commission should provide
the RTOs/ISOs with flexibility to establish any minimum size
requirement for distributed energy resource aggregations based on their
ability to model and dispatch these resources.\428\ SoCal Edison states
that each RTO/ISO should be allowed to determine its own minimum size
requirements, providing the example of CAISO's requirement that
distributed energy resource aggregations be at least 500 kW to help
ensure that an aggregation is large enough to have a measurable impact
on the transmission system.\429\ EPRI and SoCal Edison both highlight
the software challenges and potential costs associated with
implementing a minimum size requirement at or below 100 kW.\430\
Pacific Gas & Electric asserts that RTOs/ISOs must be allowed to
account for the differences between interacting with aggregations and
stand-alone resources in their markets.\431\ MISO states that, to the
extent the Commission deems it necessary to set a volume threshold for
aggregated participation, the threshold should apply to registration
minimums and not be related to how RTOs/ISOs model or dispatch
resources.\432\ NYISO Indicated Transmission Owners assert that
aggregations should be subject to the same minimum size requirements as
traditional resources that are based on the services they are
providing.\433\
---------------------------------------------------------------------------

    \428\ See, e.g., AES Companies Comments (RM16-23) at 34; IRC
Comments (RM16-23) at 7; ISO-NE Comments (RM16-23) at 36; MISO
Comments (RM16-23) at 20; Pacific Gas & Electric Comments (RM16-23)
at 17.
    \429\ SoCal Edison Comments (RM16-23) at 11 (citing CAISO
Tariff, Section <IP_ADDRESS>; CAISO, Transmittal Letter, Docket No.
ER16-1085, at 9 (filed March 4, 2016)).
    \430\ EPRI Comments (2018 RM18-9) at 7-8; SoCal Edison Comments
(2018 RM18-9) at 5.
    \431\ Pacific Gas & Electric Comments (RM16-23) at 17.
    \432\ MISO Comments (2018 RM18-9) at 16-17.
    \433\ NYISO Indicated Transmission Owners Comments (RM16-23) at
12.
---------------------------------------------------------------------------

    170. Energy Storage Association agrees that a lower limit is
necessary but asserts that the Commission should not allow RTOs/ISOs to
place upper limits on the size of distributed energy resource
aggregations.\434\ In contrast, CAISO believes that the Commission
should adopt an upper limit on the size of these aggregations to ensure
reliable operation of the transmission system while obtaining more
experience with distributed energy resource aggregations. CAISO notes
that its Distributed Energy Resource Provider model imposes a maximum
capacity requirement of 20 MW on aggregations that span multiple
pricing nodes to limit the impact of these aggregations on congestion
on the CAISO grid without severely constraining the ability of
distributed energy resource providers to form viable aggregations.\435\
Similarly, SPP argues that the Commission should consider a maximum
size requirement for aggregations across multiple nodes but that no
maximum requirement is necessary for aggregations located at a single
node.\436\ University of Delaware's EV R&D Group argues that upper
power limits should allow for an aggregation of 100-200 kW resources as
this will better permit the participation of electric bus fleets.\437\
---------------------------------------------------------------------------

    \434\ Energy Storage Association Comments (RM16-23) at 25-26.
    \435\ CAISO Comments (RM16-23) at 25-26.
    \436\ SPP Comments (RM16-23) at 16.
    \437\ University of Delaware EV R&D Group Comments (2018 RM18-9)
at 1.
---------------------------------------------------------------------------

c. Commission Determination
    171. We adopt the NOPR proposal, with modifications, and add Sec.
35.28(g)(12)(iii) to the Commission's regulations to require each RTO/
ISO to implement a minimum size requirement not to exceed 100 kW for
all distributed energy resource aggregations. We agree with commenters
that a minimum size requirement not to exceed 100 kW will help improve
competition in the RTO/ISO markets and avoid confusion about
appropriate minimum size requirements for distributed energy resource
aggregations under existing or new participation models. We do not
expect this requirement to overburden RTO/ISO modeling software with an
excessive number of small resources because 100 kW is currently a
commonly used resource size. In contrast, larger minimum size
requirements that may have been designed for different types of
resources could pose a significant barrier to entry for distributed
energy resource aggregations. In addition, this minimum size
requirement is consistent with the Commission's minimum size
requirement for electric storage resources in Order No. 841.\438\
---------------------------------------------------------------------------

    \438\ Order No. 841, 162 FERC ] 61,127 at P 270.
---------------------------------------------------------------------------

    172. Several RTOs/ISOs support a minimum size requirement not to
exceed 100 kW. PJM and SPP have a minimum size requirement of 100 kW
for all resources and support the same requirement for distributed
energy resource aggregations, and all of the RTOs/ISOs have at least
one participation model that allows resources as small as 100 kW to

participate in their markets.\439\ However, we recognize concerns about
the ability of modeling and dispatch software to handle a large number
of small distributed energy resource aggregations. Therefore, while we
require each RTO/ISO to implement on compliance a minimum size
requirement not to exceed 100 kW for all distributed energy resource
aggregations, we will consider any future post-implementation requests
to increase the minimum size requirement above 100 kW if the RTO/ISO
demonstrates that it is experiencing difficulty calculating efficient
market results and there is not a viable software solution for
improving such calculations.\440\
---------------------------------------------------------------------------

    \439\ See, e.g., CAISO Data Request Response (AD16-20) at 10-11;
ISO-NE Data Request Response (AD16-20) at 13-14; MISO Data Request
Response (AD16-20) at 10; NYISO Data Request Response (AD16-20) at
9; PJM Data Request Response (AD16-20) at 10.
    \440\ The Commission offered the RTOs/ISOs a similar
accommodation for the minimum size requirement for electric storage
resources. See Order No. 841, 162 FERC ] 61,127 at P 275.
---------------------------------------------------------------------------

    173. We agree with the post-technical conference comments that a
minimum size requirement that is lower than some existing RTO/ISO
minimum size requirements will help alleviate concerns about the
ability of single node aggregations to achieve the necessary minimum
size, particularly given our findings on locational requirements for
distributed energy resource aggregations.\441\ NYISO recently adopted
this approach, stating that because it decided to limit distributed
energy resource aggregations to a single pricing node in its
distributed energy resources roadmap, NYISO thought it was appropriate
to lower the minimum size threshold for distributed energy resource
aggregations to 100 kW.\442\ Therefore, not only will a minimum size
requirement that does not exceed 100 kW remove a barrier to distributed
energy resource aggregations, improve competition in RTO/ISO markets,
avoid confusion about appropriate requirements, and help ensure just
and reasonable rates, but application of this requirement in
conjunction with our findings on locational requirements, discussed in
Section IV.D below, will help alleviate any adverse competitive impacts
that single node aggregations may have.\443\
---------------------------------------------------------------------------

    \441\ See infra Section IV.D (Locational Requirements).
    \442\ Technical Conference Transcript at 27; see NYISO
Aggregation Order, 170 FERC ] 61,033.
    \443\ See infra Section IV.D (Locational Requirements).
---------------------------------------------------------------------------

    174. We are not persuaded by commenters to adopt a maximum size
requirement for distributed energy resource aggregations that span
multiple pricing nodes. We do not see a need to adopt such a
requirement because, as explained in Section IV.E below, to the extent
that RTOs/ISOs allow for multi-node distributed energy resource
aggregations, distribution factors and bidding parameters should
provide the RTOs/ISOs with the information from geographically
dispersed resources in a distributed energy resource aggregation
necessary to reliably operate their systems regardless of the size of
the aggregation.\444\ We also note that, given our findings on
locational requirements, we are not requiring RTOs/ISOs to establish
multi-node distributed energy resource aggregations.\445\
---------------------------------------------------------------------------

    \444\ See infra Section IV.E (Distribution Factors and Bidding
Parameters).
    \445\ See infra Section IV.D (Locational Requirements).
---------------------------------------------------------------------------

5. Minimum and Maximum Capacity Requirements for Distributed Energy
Resources Participating in an Aggregation
a. NOPR Proposal
    175. The Commission proposed not to establish a minimum or maximum
capacity requirement for an individual distributed energy resource to
be able to participate in RTO/ISO markets through a distributed energy
resource aggregator.\446\ The Commission stated that it believes
participation in RTO/ISO markets through a distributed energy resource
aggregator should not be conditioned on the size of the resource but
recognized that existing RTO/ISO market rules may require distributed
energy resources to meet certain minimum or maximum capacity
requirements under certain participation models. Therefore, the
Commission sought comment on whether to establish a minimum or maximum
capacity limit for individual distributed energy resources seeking to
participate in RTO/ISO markets through a distributed energy resource
aggregator, or whether to allow each RTO/ISO to propose such a minimum
or maximum capacity requirement on compliance with any final rule
issued in this rulemaking proceeding. To the extent that commenters
believe that the Commission should adopt a minimum or maximum capacity
requirement for individual distributed energy resources participating
in RTO/ISO markets through a distributed energy resource aggregator,
the Commission sought comment on what that requirement should be.
---------------------------------------------------------------------------

    \446\ NOPR, 157 FERC ] 61,121 at P 135.
---------------------------------------------------------------------------

b. Comments
    176. Several commenters support the Commission's proposal not to
establish a minimum capacity requirement for individual distributed
energy resources participating in RTO/ISO markets through distributed
energy resource aggregations.\447\ Some commenters state that minimum
or maximum capacity requirements are not necessary for individual
distributed energy resources because the aggregator will interact with
the wholesale market as a single resource and, as such, that
aggregation will be subject to eligibility rules.\448\ Fluidic, Fresh
Energy/Sierra Club/Union of Concerned Scientists, and Tesla/SolarCity
argue that aggregators should be allowed to optimize their portfolio
with any mix of resources to ensure the most cost-effective
aggregation.\449\ Energy Storage Association notes that, while many
behind-the-meter electric storage resources are relatively small (only
a few kW in some cases), in aggregate, they can operate nearly
identically to a single, much larger electric storage resource.\450\
---------------------------------------------------------------------------

    \447\ See, e.g., APPA/NRECA Comments (16-23) at 43; Fluidic
Comments (RM16-23) at 5; Fresh Energy/Sierra Club/Union of Concerned
Scientists Comments (RM16-23) at 2; ISO-NE Comments (RM16-23) at 36;
NYISO Indicated Transmission Owners Comments (RM16-23) at 12.
    \448\ See, e.g., NYISO Indicated Transmission Owners Comments
(RM16-23) at 12; R Street Institute Comments (RM16-23) at 8; SEIA
Comments (RM16-23) at 18; SPP Comments (RM16-23) at 16; Tesla/
SolarCity Comments (RM16-23) at 27.
    \449\ Fluidic Comments (RM16-23) at 5, Fresh Energy/Sierra Club/
Union of Concerned Scientists Comments (RM16-23) at 2; Tesla/
SolarCity Comments (RM16-23) at 27.
    \450\ Energy Storage Association Comments (RM16-23) at 25-26.
---------------------------------------------------------------------------

    177. Several commenters ask the Commission to defer to the RTOs/
ISOs to propose and justify to the Commission any minimum and maximum
capacity requirements for individual distributed energy resources
participating in RTO/ISO markets through distributed energy resource
aggregations.\451\ EEI argues that the RTO/ISO-established requirements
should be based on their individual market rules and their ability to
verify the accuracy of the metering and the verification process for
the resource.\452\ NYISO notes that it is evaluating whether there
should be a maximum size for a distributed energy resource in an
aggregation in order to permit

independent modeling of relatively large distributed energy resources
and provide grid operators more operational awareness and control over
distributed energy resources that may be needed to address system
conditions.\453\
---------------------------------------------------------------------------

    \451\ See, e.g., Advanced Energy Economy Comments (RM16-23) at
51; Duke Energy Comments (RM16-23) at 5; ISO-NE Comments (RM16-23)
at 36; MISO Transmission Owners Comments (RM16-23) at 20; Pacific
Gas & Electric Comments (RM16-23) at 16.
    \452\ EEI Comments (RM16-23) at 27.
    \453\ NYISO Comments (RM16-23) at 15. The Commission accepted
NYISO's proposal to limit the size of resources in an aggregation to
20 MW or less. NYISO Aggregation Order, 170 FERC ] 61,033 at P 9.
---------------------------------------------------------------------------

    178. MISO Transmission Owners argue that capacity limits should be
identified at the RTO/ISO level unless a distribution utility is
impacted, in which case the distribution utility should have discretion
to set its own requirements so that any minimum size requirement
respects capacity limitations on a distribution circuit, whether
individual or in the aggregate.\454\ Similarly, APPA/NRECA assert that
the Commission has no jurisdiction over facilities used for generation
or local distribution and that state and local regulators are likely
best equipped to address minimum or maximum capacity requirements.\455\
---------------------------------------------------------------------------

    \454\ MISO Transmission Owners Comments (RM16-23) at 20.
    \455\ APPA/NRECA Comments (RM16-23) at 43.
---------------------------------------------------------------------------

c. Commission Determination
    179. To implement Sec.  35.28(g)(12)(ii)(a) of the Commission's
regulations, we adopt the NOPR proposal, as modified below, and will
not establish a minimum or maximum capacity requirement for individual
distributed energy resources to participate in RTO/ISO markets through
a distributed energy resource aggregation. Although we decline to
establish a specific maximum capacity requirement for individual
distributed energy resources in an aggregation, we direct each RTO/ISO
to propose a maximum capacity requirement for individual distributed
energy resources participating in its markets through a distributed
energy resource aggregation or, alternatively, to explain why such a
requirement is not necessary, as discussed further below.
    180. We decline to require RTOs/ISOs to adopt minimum capacity
requirements for individual distributed energy resources to participate
in their markets through a distributed energy resource aggregation. We
agree with commenters that minimum capacity requirements for
distributed energy resources to participate in an aggregation are not
necessary because each individual resource will participate in the
market via an aggregation, which acts as a single resource. To this
end, we note that distributed energy resource aggregators, as market-
interfacing entities, are responsible for meeting applicable RTO/ISO
qualification and performance requirements, including minimum size
requirements, and for determining how any performance penalties or
deratings determined by the RTO/ISO would apply to the individual
resources in an aggregation.
    181. While we find that minimum capacity requirements are
unnecessary, we recognize the concerns raised by EEI and NYISO with
respect to each RTO's/ISO's ability to accurately model and verify the
metering of larger distributed energy resources. We believe that
capping the maximum capacity size of an individual distributed energy
resource participating in a distributed energy resource aggregation
would ensure that larger resources are required to participate
individually, thereby allowing RTOs/ISOs to independently model and
verify the metering of these larger resources. Independent modeling and
verification may provide system operators with greater operational
awareness and control to address changing system conditions. Therefore,
to implement Sec.  35.28(g)(12)(ii)(a) of the Commission's regulations,
we require each RTO/ISO, in compliance with this final rule, to either
propose a maximum capacity requirement for individual distributed
energy resources participating in its markets through a distributed
energy resource aggregation or, alternatively, to explain why such a
requirement is not necessary.
6. Single Resource Aggregation
a. NOPR Proposal
    182. The NOPR proposed, consistent with Order No. 719, that each
RTO/ISO revise its tariff to allow a single qualifying distributed
energy resource to avail itself of the proposed distributed energy
resource aggregation rules by serving as its own distributed energy
resource aggregator.\456\
---------------------------------------------------------------------------

    \456\ NOPR, 157 FERC ] 61,121 at P 137 (citing Order No. 719,
125 FERC ] 61,071 at P 158(d)).
---------------------------------------------------------------------------

b. Comments
    183. AES Companies, NextEra, and NYISO agree with the Commission's
proposal to require each RTO/ISO to revise its tariff to allow a single
qualifying distributed energy resource to avail itself of the proposed
distributed energy resource aggregation rules by serving as its own
distributed energy resource aggregator.\457\ CAISO states that,
consistent with the NOPR proposal, CAISO allows a distributed energy
resource provider to aggregate one or more distributed energy resources
for purposes of wholesale market participation.\458\
---------------------------------------------------------------------------

    \457\ AES Companies Comments (RM16-23) at 39; NextEra Comments
(RM16-23) at 14; NYISO Comments (RM16-23) at 16.
    \458\ CAISO Comments (RM16-23) at 26.
---------------------------------------------------------------------------

    184. Xcel Energy Services suggests that a higher minimum threshold
size should be established for single distributed energy resource
aggregations because a proliferation of individual aggregators could
increase administrative costs.\459\
---------------------------------------------------------------------------

    \459\ Xcel Energy Services Comments (RM16-23) at 24.
---------------------------------------------------------------------------

c. Commission Determination
    185. To implement Sec.  35.28(g)(12)(ii)(a) of the Commission's
regulations, we adopt the NOPR proposal to require each RTO/ISO to
revise its tariff to allow a single qualifying distributed energy
resource to avail itself of the proposed distributed energy resource
aggregation rules by serving as its own distributed energy resource
aggregator.\460\
---------------------------------------------------------------------------

    \460\ See supra P 118 n.280.
---------------------------------------------------------------------------

    186. We decline to require a minimum size greater than 100 kW for a
single qualifying distributed energy resource that serves as its own
distributed energy resource aggregator, as requested by Xcel Energy
Services. We find that such a requirement is unnecessary at this time
as the 100 kW minimum size requirement is a commonly used resource size
that should not overburden RTO/ISO modeling software even if many
individual resources choose to participate as such single distributed
energy resource aggregations. In addition, a consistent minimum size
requirement for aggregations of both single and multiple distributed
energy resources will minimize barriers in the event that an individual
distributed energy resource ceases to participate in a multi-resource
aggregation and subsequently seeks to participate in RTO/ISO markets as
a single qualifying distributed energy resource aggregation. As
discussed above in Section IV.C.5, a single distributed energy resource
aggregation would need to comply with all of the applicable RTO's/ISO's
requirements, including any minimum or maximum capacity requirements
for individual distributed energy resources.\461\ We clarify that, like
other distributed energy resources seeking to participate in RTO/ISO
markets exclusively through a distributed energy resource aggregation,
we will not exercise jurisdiction over the interconnection to a
distribution facility of a distributed energy resource for the purpose
of participating in RTO/ISO markets exclusively through a single-

resource aggregation. We also clarify that a single qualifying
distributed energy resource that serves as its own aggregator would
also be subject to any requirements applicable to distributed energy
resource aggregators.
---------------------------------------------------------------------------

    \461\ See supra Section IV.C.5 (Minimum and Maximum Capacity
Requirements).
---------------------------------------------------------------------------

D. Locational Requirements

a. NOPR Proposal
    187. In the NOPR, the Commission stated that it was concerned that
some existing requirements for aggregations to be located behind a
single point of interconnection or pricing node may be overly stringent
and may unnecessarily restrict opportunities for distributed energy
resources to participate in the RTO/ISO markets through a distributed
energy resource aggregator.\462\ The Commission noted that recent
improvements in metering, telemetry, and communication technology
should facilitate better situational awareness and enable management of
geographically dispersed distributed energy resource aggregations,
potentially rendering such restrictive locational requirements
unnecessary.
---------------------------------------------------------------------------

    \462\ NOPR, 157 FERC ] 61,121 at P 138.
---------------------------------------------------------------------------

    188. Thus, the Commission proposed to require each RTO/ISO to
revise its tariff to establish locational requirements for distributed
energy resources to participate in a distributed energy resource
aggregation that are as geographically broad as technically
feasible.\463\ The Commission stated that this proposal would give each
RTO/ISO flexibility to adopt locational requirements that both allow
for the participation of geographically dispersed distributed energy
resources in the RTO/ISO markets through a distributed energy resource
aggregation, where technically feasible, and also account for the
modeling and dispatch of the RTO's/ISO's transmission system. The
Commission further acknowledged that the appropriate locational
requirements may differ based on the services that a distributed energy
resource aggregator seeks to provide (e.g., the locational requirements
for participation in the day-ahead energy market may differ from those
for participation in ancillary service markets).
---------------------------------------------------------------------------

    \463\ Id. P 139.
---------------------------------------------------------------------------

    189. To the extent that commenters would prefer that the Commission
require the RTOs/ISOs to adopt consistent locational requirements, the
Commission sought comment on what locational requirements it could
require each RTO/ISO to adopt that would allow distributed energy
resources to be aggregated as widely as possible without threatening
the reliability of the transmission grid or the efficiency of RTO/ISO
markets.\464\ The Commission noted that, in some RTOs/ISOs and for some
services, the only geographic limitations imposed on distributed energy
resource aggregations are by zone or due to modeled transmission
constraints.\465\ The Commission also sought comment on potential
concerns about dispatch, pricing, or settlement that the RTOs/ISOs must
address if the distributed energy resources in a particular distributed
energy resource aggregation are not limited to the same pricing node or
behind the same point of interconnection.\466\
---------------------------------------------------------------------------

    \464\ Id. P 140.
    \465\ Id. n.233 (citing CAISO and NYISO tariff provisions).
    \466\ Id. P 141. The Commission noted that its proposal to allow
the relevant distribution utility or utilities to review the list of
distributed energy resources in a distributed energy resource
aggregation would help ensure that dispatch of the aggregated
distributed energy resources as a single resource will not cause any
reliability concerns.
---------------------------------------------------------------------------

    190. At the April 2018 technical conference, the Commission sought
comment on how to establish locational requirements for distributed
energy resource aggregations that are as broad as technically
feasible.\467\ After the technical conference, the Commission sought
further comment on how RTOs/ISOs can accurately represent distributed
energy resources in each node within a multi-node aggregation.\468\
---------------------------------------------------------------------------

    \467\ Supplemental Notice of Technical Conference at 2-3.
    \468\ Notice Inviting Post-Technical Conference Comments at 2-3.
---------------------------------------------------------------------------

b. Comments
    191. Several commenters support the Commission's proposal to
require distributed energy resource aggregations that are as
geographically broad as technically feasible and cite numerous benefits
of broad aggregation.\469\ IRC states that this proposal strikes the
appropriate balance between accommodating smaller distributed energy
resources and providing the necessary flexibility to RTOs/ISOs.\470\
Advanced Energy Economy contends that aggregation across a broad
geographic area is fundamental to the distributed energy resource
business model.\471\ Advanced Energy Management contends that the
larger the aggregation, the lower the chance of underperformance.\472\
Several commenters support multi-node aggregation, stating that it will
improve market entry and overall competitive benefits.\473\ Others
assert that multi-node aggregation will improve the services that
distributed energy resource aggregations can provide, enhancing grid
resilience and reliability.\474\
---------------------------------------------------------------------------

    \469\ See, e.g., Advanced Energy Management Comments (RM16-23)
at 24; DER/Storage Developers Comments (RM16-23) at 4; Efficient
Holdings Comments (RM16-23) at 17-18; IRC Comments (RM16-23) at 8;
NRG Comments (RM16-23) at 10-11.
    \470\ IRC Comments (RM16-23) at 8.
    \471\ Advanced Energy Economy Comments (RM16-23) at 45.
    \472\ Advanced Energy Management Comments (RM16-23) at 24.
    \473\ See, e.g., Advanced Energy Buyers Comments (2018 RM18-9)
at 7; CAISO Comments (2018 RM18-9) at 10-11; EPRI Comments (2018
RM18-9) at 6; NRG Comments (2018 RM18-9) at 4-5; SEIA Comments (2018
RM18-9) at 14.
    \474\ Advanced Energy Management Comments (2018 RM18-9) at 5;
Direct Energy Comments (2018 RM18-9) at 2-3; Lorenzo Kristov
Comments (2018 RM18-9) at 14; SEIA Comments (2018 RM18-9) at 14.
---------------------------------------------------------------------------

    192. Several commenters highlight examples of current RTO/ISO
activities supporting broad geographic aggregation. Advanced Energy
Economy states that PJM and NYISO have allowed aggregation at a broad
level for behind-the-meter resources.\475\ Several commenters note that
CAISO allows aggregation across nodes by permitting an aggregator to
submit distribution factors.\476\ Advanced Energy Management highlights
that ISO-NE allows aggregation at the dispatch zone level, stating that
this suggests that it is technically feasible to aggregate behind-the-
meter resources to that level even for energy and ancillary services
participation.\477\
---------------------------------------------------------------------------

    \475\ Advanced Energy Economy Comments (RM16-23) at 45.
    \476\ Id.; DER/Storage Developers Comments (RM16-23) at 4;
Tesla/SolarCity Comments (RM16-23) at 28. CAISO uses load
distribution factors to reflect the relative amount of load at each
node. The sum of all load distribution factors for a single
aggregation is one. See CAISO Tariff, Appendix A.
    \477\ Advanced Energy Management Comments (RM16-23) at 25.
---------------------------------------------------------------------------

    193. Multiple commenters also articulate concerns regarding
limiting distributed energy resource aggregations to a single
node.\478\ Advanced Energy Economy and Advanced Energy Management
contend that aggregation limited to the nodal level will not meet the
``geographically broad as technically feasible'' standard, and Advanced
Energy Management asks the Commission to clarify that it does not.\479\
Advanced Energy Economy and CAISO further caution against the economic
effects of single-node aggregation, stating that it would erode

the economics of aggregating distributed energy resources and create a
barrier to their wholesale market participation.\480\
---------------------------------------------------------------------------

    \478\ See, e.g., AES Companies Comments (RM16-23) at 36;
Efficient Holdings Comments (RM16-23) at 18; Public Interest
Organizations Comments (RM16-23) at 24; R Street Institute Comments
(RM16-23) at 9; Sunrun Comments (2018 RM18-9) at 14.
    \479\ Advanced Energy Economy Comments (RM16-23) at 46-47;
Advanced Energy Management Comments (RM16-23) at 24.
    \480\ Advanced Energy Economy Comments (2018 RM18-9) at 22;
CAISO Comments (2018 RM18-9) at 10-11.
---------------------------------------------------------------------------

    194. Several commenters state that, at the technical conference,
CAISO and PJM described workable approaches to mitigate any reliability
concerns and to achieve proper price formation for multi-node
aggregations of distributed energy resources.\481\ Other commenters
point to approaches used elsewhere, such as multi-node aggregations of
demand response resources in other regions.\482\ Organization of MISO
States comments that, in MISO, multi-node aggregation is allowed for
purposes of capacity accreditation, but only for a limited set of
resource types.\483\
---------------------------------------------------------------------------

    \481\ Advanced Energy Economy Comments (2018 RM18-9) at 22;
Advanced Energy Management Comments (2018 RM18-9) at 5-6; Direct
Energy Comments (2018 RM18-9) at 6 (citing Technical Conference
Transcript at 17, 18, 53); Sunrun Comments (2018 RM18-9) at 14.
    \482\ See, e.g., Advanced Energy Economy Comments (2018 RM18-9)
at 22; Advanced Energy Management Comments (2018 RM18-9) at 6
(citing ISO-NE Comments, Docket No. AD16-20-000 (filed Feb. 13,
2017) (``ISO-NE explains that, for the capacity market, demand
resources may consist of an aggregation of multiple end-use
customers, though they must be at least 100 kW and located within a
dispatch zone or load zone as required under the participation model
through which they are participating. ISO-NE further explains that
for the energy and reserve markets, demand response resources may
also be aggregated as long as they are individually at least 10 kW,
have an expected maximum interruptible capacity of 5 MW or less, and
are located within a dispatch zone and reserve zone.'')); CAISO
Comments (2018 RM18-9) at 10, 12-13; Lorenzo Kristov Comments (2018
RM18-9) at 14; PJM Market Monitor Comments (2018 RM18-9) at 7-8.
    \483\ Organization of MISO States Comments (2018 RM18-9) at 2
(citing Midcontinent Independent System Operator, Open Access
Transmission, Energy, and Operating Reserve Markets Tariff, Module
E-1, Section 69A.3.5).
---------------------------------------------------------------------------

    195. Other commenters further express support for the feasibility
of dispatching and settling distributed energy resource aggregations
across multiple nodes. For instance, PJM explains that it already
dispatches demand response resources across varying levels of
geographic areas, including across different pricing nodes, which could
be used as a foundation for developing similar rules to dispatch
distributed energy resources injecting past the applicable retail
meter.\484\ Xcel Energy Services states that it is not concerned with
aggregations across multiple nodes if the region has accurate topology
models, volumetric weightings, and billing/settlement metering at each
location (and penalties are assessed at the individual resource level
to disincentivize gaming, manipulation, and price formation
errors).\485\ Avangrid contends that provisions that would allow
``settlement-only'' generation treatment for aggregated distributed
energy resources would allow aggregation of these resources on a
broader load zone basis for energy market settlement.\486\
---------------------------------------------------------------------------

    \484\ PJM Comments (RM16-23) at 28.
    \485\ Xcel Energy Services Comments (RM16-23) at 25.
    \486\ Avangrid Comments (RM16-23) at 12.
---------------------------------------------------------------------------

    196. Some commenters address the relationship between the minimum
and maximum size requirement for distributed energy resource
aggregations and the locational requirements for them. Eversource and
other commenters state that limiting the maximum size of a distributed
energy resource aggregation can also mitigate any negative operational
impacts of geographically broad aggregations.\487\ Tesla/Solar City
state that a minimum size requirement of 100 kW would allow the
reasonable development of aggregations within any locational
requirement established for distributed energy resource
aggregations.\488\ In their comments in response to the Notice Inviting
Post-Technical Conference Comments, multiple commenters agree that
reducing the minimum size requirement for distributed energy resource
aggregations to 100 kW may alleviate concerns about requiring
aggregations to be located at a single node.\489\ Organization of MISO
States observes that lowering the minimum size requirement for
distributed energy resource aggregations would decrease the need for
broad aggregation across Local Balancing Authorities and that this
could also reduce the size of resources, which inherently lowers any
related reliability risk to the system.\490\ Lorenzo Kristov states
that single-node distributed energy resource aggregations that meet the
minimum size threshold would be useful resources for the wholesale
market, so the question is whether the additional complexity of multi-
node distributed energy resource aggregations has commensurate
benefits.\491\ SEIA states that it supports a 100 kW minimize size
limit, but does not support limiting aggregations to single pricing
nodes.\492\
---------------------------------------------------------------------------

    \487\ Advanced Energy Economy Comments (2018 RM18-9) at 22
(citing Technical Conference Transcript, Comments of Andrew Levitt,
Senior Market Strategist, PJM Interconnection, L.L.C., at p. 20,
lines 2-8, and P 49, lines 21-24 (noting the ability of economic
dispatch engines to manage any constraints that may be caused by
dispatching individual resources within an aggregation)); CAISO
Comments (2018 RM18-9) at 5; Eversource Comments (2018 RM18-9) at
13; PJM Comments (2018 RM18-9) at 5, 11-12; SEIA Comments (2018
RM18-9) at 14.
    \488\ Tesla/SolarCity Comments (RM16-23) at 26.
    \489\ See, e.g., EPRI Comments (2018 RM18-9) at 7-8; Lorenzo
Kristov Comments (2018 RM18-9) at 14; Organization of MISO States
Comments (2018 RM18-9) at 2; PJM Comments (2018 RM18-9) at 12.
    \490\ Organization of MISO States Comments (2018 RM18-9) at 2.
    \491\ Lorenzo Kristov Comments (2018 RM18-9) at 14.
    \492\ SEIA Comments (2018 RM18-9) at 14.
---------------------------------------------------------------------------

    197. Other commenters, however, recommend that the Commission
restrict aggregation to one pricing node or interconnection point.\493\
Some commenters are concerned that a geographically broad locational
requirement could have potential reliability impacts on the
distribution system or the bulk electric system.\494\ For instance,
several RTOs/ISOs, including those that support multi-node
aggregations, express concerns related to managing the aggravation of
transmission constraints and resulting pricing and operational
implications in real time if aggregated resources were to span both
sides of a constraint.\495\ PJM Market Monitor states that the
potential addition of more distributed energy resources means they
should be aggregated at a single node to allow operators to have
visibility and control.\496\ PJM Market Monitor asserts that it is
impossible to ensure that dispatch of a multi-node aggregation of
distributed energy resources does not exacerbate a transmission
constraint in a nodal system.\497\
---------------------------------------------------------------------------

    \493\ ISO-NE Comments (RM16-23) at 37-40; NYISO Comments (RM16-
23) at 17; NYISO Indicated Transmission Owners Comments (RM16-23) at
13-14; PJM Market Monitor Comments (RM16-23) at 13.
    \494\ See, e.g., American Petroleum Institute Comments (RM16-23)
at 10-11; Duke Energy Comments (RM16-23) at 3, 5-6; EEI Comments
(RM16-23) at 28-29; Institute for Policy Integrity Comments (RM16-
23) at 9; Pacific Gas & Electric Comments (RM16-23) at 18-19.
    \495\ See, e.g., CAISO Comments (RM16-23) at 27; ISO-NE Comments
(RM16-23) at 37; MISO Comments (RM16-23) at 21-22; NYISO Comments
(2018 RM18-9) at 6, 16; SPP Comments (RM16-23) at 17-19.
    \496\ PJM Market Monitor Comments (2018 RM18-9) at 12.
    \497\ Id. at 4.
---------------------------------------------------------------------------

    198. NYISO Indicated Transmission Owners argue that aggregations
spanning more than one transmission zone could present both
administrative and operational difficulties for the RTO/ISO and the
distribution utility and that aggregations should be limited to a
single transmission node unless price separation does not exist.\498\
EPSA and the PJM Market Monitor argue that because all the RTOs/ISOs
rely on nodal security constrained economic dispatch, it is appropriate
for a generic rule to limit aggregations to a single node to ensure
that the markets continue to be

efficient and competitive.\499\ EPRI states that aggregations at single
nodes would generally be the most beneficial for the distributed energy
resources financially, for the RTOs/ISOs with respect to reliability,
and for consumers economically.\500\ NYISO states that single-node
aggregation allows NYISO to telemeter only the aggregation rather than
each individual resource within the aggregation, reducing the cost of
participation and better allowing smaller resources to participate in
the NYISO markets.\501\
---------------------------------------------------------------------------

    \498\ NYISO Indicated Transmission Owners Comments (RM16-23) at
13-14.
    \499\ EPSA Comments (2018 RM18-9) at 8-9; PJM Market Monitor
Comments (2018 RM18-9) at 2-3.
    \500\ EPRI Comments (2018 RM18-9) at 6.
    \501\ NYISO Comments (2018 RM18-9) at 6, 8.
---------------------------------------------------------------------------

    199. Commenters also address the dynamic nature of managing multi-
node aggregations of distributed energy resources--such as the
challenges that come from frequent changes in congestion patterns and
system topology.\502\ Several commenters express concerns that a
geographically broad locational requirement for distributed energy
resource aggregations could disrupt nodal pricing methods and result in
different treatment of resources located at a single node (i.e., among
multi-node distributed energy resource aggregations and
generators).\503\ Calpine states that it may be possible to revisit
procedures for multi-node aggregation of distributed energy resources
as the system topology changes due to congestion, but that rules
associated with locational requirements may not provide the flexibility
necessary for the RTOs/ISOs to manage dynamic grid conditions in real
time.\504\
---------------------------------------------------------------------------

    \502\ CAISO Comments (2018 RM18-9) at 5-6; EPRI Comments (2018
RM18-9) at 3-4; MISO Comments (2018 RM18-9) at 18; NYISO Comments
(2018 RM18-9) at 6; PJM Market Monitor Comments (2018 RM18-9) at 3.
    \503\ See, e.g., American Petroleum Institute Comments (RM16-23)
at 10-11; EEI Comments (RM16-23) at 28-30; ISO-NE Comments (RM16-23)
at 37-40; NYISO Indicated Transmission Owners at 16-17; PJM Market
Monitor Comments (RM16-23) at 13.
    \504\ Calpine Comments (2018 RM18-9) at 4-5 (citing comments of
Dr. Joseph Bowring, Technical Conference Transcript at 37; comments
of Jeff Bladen, Technical Conference Transcript at 36).
---------------------------------------------------------------------------

    200. With respect to whether the Commission should require the
RTOs/ISOs to adopt consistent locational requirements for distributed
energy resource aggregations, commenters provide varied
recommendations. Tesla/SolarCity recommend that the Commission
establish consistent locational requirements across the RTOs/ISOs,
similar to CAISO's Distributed Energy Resource Provider framework.\505\
Mensah supports locational requirements by distribution utility zones
or defined sub-zones, while noting locational requirements may vary
across RTOs/ISOs.\506\ Mensah asserts that locational requirements
should be consistent for all wholesale market services within an
individual RTO/ISO in order to avoid unnecessary complications.
---------------------------------------------------------------------------

    \505\ Tesla/SolarCity Comments (RM16-23) at 27.
    \506\ Mensah Comments (RM16-23) at 3.
---------------------------------------------------------------------------

    201. Other commenters suggest that the RTOs/ISOs should have
flexibility to determine the locational requirements appropriate for
their region. Noting CAISO's approach to distributed energy resource
aggregation within ``sub-zones,'' ISO-NE's approach to self-scheduling
distributed energy resources, and the PJM Market Monitor's desire for
nodal aggregations, MISO argues that the Commission should allow each
RTO/ISO to establish tailored approaches based on its regional
needs.\507\ Similarly, Calpine and SoCal Edison assert that the
Commission should allow regional variations.\508\ PJM asserts that the
Commission should require RTOs/ISOs to adopt measures necessary to
ensure control of congestion, but should allow flexibility to tailor
those measures for individual systems.\509\
---------------------------------------------------------------------------

    \507\ MISO Comments (2018 RM18-9) at 20 (citing Technical
Conference Transcript at 9-11, 14-15, 20-23).
    \508\ Calpine Comments (2018 RM18-9) at 5-6; SoCal Edison
Comments (2018 RM18-9) at 3.
    \509\ PJM Comments (2018 RM18-9) at 6-7.
---------------------------------------------------------------------------

    202. Other commenters, including AES Companies and MISO
Transmission Owners, argue for regional flexibility but recommend that
other entities besides the RTOs/ISOs, such as affected balancing
authorities, distribution utilities, states, and non-regulated
distribution cooperatives, determine the locational requirements.\510\
---------------------------------------------------------------------------

    \510\ AES Companies Comments (RM16-23) at 10, 34; MISO
Transmission Owners Comments (RM16-23) at 21.
---------------------------------------------------------------------------

    203. Several of the commenters that support the Commission adopting
rules for multi-node aggregations suggest that the RTOs/ISOs could be
permitted to present evidence in their compliance filings demonstrating
that limiting aggregations is necessary for reliability reasons.\511\
Direct Energy and NRG argue that any limits or boundaries on
aggregations of distributed energy resources must be supported by a
transparent, comprehensive, and data-driven regional analysis, and that
a distributed energy resource's participation should only be precluded
if its participation would undermine reliability.\512\
---------------------------------------------------------------------------

    \511\ Advanced Energy Economy Comments (2018 RM18-9) at 22-23;
Advanced Energy Management Comments (2018 RM18-9) at 6; Direct
Energy Comments (2018 RM18-9) at 3-4 (describing examples of
distributed energy resource aggregations being operated in Belgium,
France and Australia); NRG Comments (2018 RM18-9) at 5.
    \512\ Direct Energy Comments (2018 RM18-9) at 4-5, 6-7 (citing
Technical Conference Transcript at 9, 34).
---------------------------------------------------------------------------

c. Commission Determination
    204. We adopt the NOPR proposal and add Sec.  35.28(g)(12)(ii)(b)
to the Commission's regulations to require each RTO/ISO to revise its
tariff to establish locational requirements for distributed energy
resources to participate in a distributed energy resource aggregation
that are as geographically broad as technically feasible. However,
given the variety of approaches to locational requirements proposed by
commenters, we will provide each RTO/ISO with flexibility to determine
the locational requirements for its region, as long as it demonstrates
that those requirements are as geographically broad as technically
feasible. To the extent that an RTO/ISO seeks to continue its currently
effective locational requirements for distributed energy resources, it
must demonstrate on compliance that its approach meets this
requirement. To comply with this rule, each RTO/ISO must provide a
detailed, technical explanation for the geographical scope of its
proposed locational requirements. This explanation could include, for
example, a discussion of the RTO/ISO's system topology and regional
congestion patterns, or any other factors that necessitate its proposed
locational requirements.
    205. We recognize the arguments for both multi-node and single-node
aggregations. There are several benefits of multi-node aggregations,
such as improved market entry and competition, lower chance of
underperformance, and improved services that aggregations can provide.
However, single-node aggregations may reduce the cost of participation
for smaller resources by telemetering the aggregation rather than each
individual resource and allows RTOs/ISOs to better manage intra-zonal
price congestion. Additionally, as discussed above, the reduction of
the minimum size requirement for distributed energy resource
aggregations will help alleviate commenters' concerns about requiring
aggregations to locate only at a single node.\513\
---------------------------------------------------------------------------

    \513\ See supra Section IV.C.4 (Minimum and Maximum Size of
Aggregation).
---------------------------------------------------------------------------

    206. We are persuaded by comments that identify the various
benefits of multi-node distributed energy resource

aggregations. In particular, we are persuaded by CAISO's arguments that
multi-node aggregations allow for greater market participation by
reducing transaction costs and assembling appropriately sized resources
optimized for the wholesale electricity markets, and by PJM's assertion
that it already dispatches demand response resources across different
pricing nodes.\514\ We believe that the challenges of managing a multi-
node aggregation--especially around a transmission constraint--can be
overcome through coordination between RTOs/ISOs, aggregators, and
distribution system operators. However, we also recognize that existing
differences--both operational and administrative--among RTOs/ISOs make
such a uniform requirement challenging. Those differences are relevant
here because some RTOs/ISOs already aggregate resources in a different
manner, dynamic changes in system topology and congestion patterns vary
across each RTO/ISO, and each RTO/ISO may have different solutions
addressing reliability impacts on their respective systems.
Accordingly, while each RTO/ISO must provide a detailed, technical
explanation for the geographical scope of its proposed locational
requirements, this final rule provides RTOs/ISOs with a certain degree
of flexibility as to the technical aspects of a locational requirement
that is as geographically broad as possible.
---------------------------------------------------------------------------

    \514\ See CAISO Comments (2018 RM18-9) at 10; PJM Comments
(RM16-23) at 28.
---------------------------------------------------------------------------

    207. As to arguments regarding the relative merits of single node
and multi-node aggregations, we find that providing RTOs/ISOs with the
flexibility to establish their own locational requirements on
compliance that are as geographically broad as technically feasible
will allow such arguments to be considered in the stakeholder process
and in each RTO/ISO-specific compliance proceeding. We also are not
persuaded by Mensah's and Tesla/SolarCity's arguments for consistent
locational requirements either across the RTOs/ISOs or for all
wholesale market services within an individual RTO/ISO. We find that
there is no need to standardize the locational requirements and
therefore instead provide the RTOs/ISOs the flexibility to develop more
tailored approaches based on their regional needs. In addition, we are
not persuaded by AES Companies' and MISO Transmission Owners' arguments
that entities other than the RTO/ISO should determine the locational
requirements of distributed energy resources. We find that RTOs/ISOs
have the primary responsibility of administering the regional markets
and reliably operating the system, and are therefore in the best
position to propose on compliance the appropriate locational
requirements, as long as they demonstrate that those requirements are
as geographically broad as technically feasible, to enable distributed
energy resources to participate in a distributed energy resource
aggregation for their regions.

E. Distribution Factors and Bidding Parameters

a. NOPR Proposal
    208. In the NOPR, the Commission proposed to require each RTO/ISO
to revise its tariff to include the requirement that distributed energy
resource aggregators (1) provide default distribution factors \515\
when they register their distributed energy resource aggregation; and
(2) update those distribution factors if necessary when they submit
offers to sell or bids to buy into the RTO/ISO markets.\516\ The
Commission also proposed to require each RTO/ISO to revise the bidding
parameters for each participation model in its tariff to allow
distributed energy resource aggregators to update their distribution
factors when participating in RTO/ISO markets. The Commission sought
comment on this proposal as well as comment on alternative approaches
that may provide the RTOs/ISOs with the information from geographically
or electrically dispersed resources in a distributed energy resource
aggregation necessary to reliably operate their systems. The Commission
also sought comment on whether bidding parameters in addition to those
already incorporated into existing participation models may be
necessary to adequately characterize the physical or operational
characteristics of distributed energy resource aggregations.
---------------------------------------------------------------------------

    \515\ Distribution factors indicate how much of the total
response from a distributed energy resource aggregation would be
coming from each node at which one or more resources participating
in the aggregation are located.
    \516\ NOPR, 157 FERC ] 61,121 at P 143.
---------------------------------------------------------------------------

    209. After the April 2018 technical conference, the Commission
sought additional information about bidding parameters or other
potential mechanisms needed to represent the physical and operational
characteristics of distributed energy resource aggregations in RTO/ISO
markets.\517\
---------------------------------------------------------------------------

    \517\ Notice Inviting Post-Technical Conference Comments at 4-5.
---------------------------------------------------------------------------

b. Comments
    210. A number of commenters support the Commission's proposed
requirement for distributed energy resource aggregators to provide
default distribution factors to the RTO/ISO when registering
distributed energy resource aggregations and to update those
distribution factors as necessary.\518\ Tesla/SolarCity states that
this method strikes the proper balance between providing flexibility
and market access to distributed energy resource aggregators while
providing sufficient information to RTOs/ISOs about the locations of
the individual distributed energy resources and how dispatching them
will affect the system.\519\ DER/Storage Developers assert that
distribution factors would provide the RTO/ISO with sufficient
information to maintain reliability without requiring unnecessary
information about individual distributed energy resources.\520\
---------------------------------------------------------------------------

    \518\ See, e.g., CAISO Comments (RM16-23) at 30; DER/Storage
Developers Comments (RM16-23) at 4; NextEra Comments (RM16-23) at
15; SEIA Comments (RM16-23) at 19; Xcel Energy Services Comments
(RM16-23) at 25.
    \519\ Tesla/SolarCity Comments (RM16-23) at 28.
    \520\ DER/Storage Developers Comments (RM16-23) at 4.
---------------------------------------------------------------------------

    211. CAISO generally supports the Commission's proposal and notes
that its Distributed Energy Resource Provider model rules require an
aggregator to submit generation distribution factors with its bid.\521\
CAISO states that multi-node aggregations require distribution factors
to model the impact of the resource on the transmission system and that
allowing resources to update distribution factors in the bid submission
process mitigates the potential for inaccuracies. If an aggregator does
not submit distribution factors with its bid, CAISO states that it uses
the aggregation's default generation distribution factors registered in
CAISO's Master File for a reasonable expectation of how the resource
will perform across applicable pricing nodes.\522\ CAISO notes that
using distribution factors to schedule load is an acceptable and
feasible practice despite inherent inaccuracies.\523\ Microgrid
Resources Coalition notes that CAISO's Distributed Energy Resource
Provider model permits participation in aggregations of separately
metered resources independent of the various attributes of the other
loads and resources behind the meter and that the critical feature of
this arrangement is the ability to define the limits of participation
so that the aggregator and the system operator can dispatch the
aggregation within those

limits.\524\ Lorenzo Kristov also notes that the CAISO Distributed
Energy Resource Provider structure enables multi-node aggregations
using both default and biddable distribution factors.\525\ Lorenzo
Kristov states, however, that these provisions have not yet been
practically tested by a non-demand-response resource. Conversely, NYISO
states that it does not need distribution factors to dispatch
distributed energy resource aggregations accurately because it intends
to limit distributed energy resource aggregations to resources at a
single transmission node.\526\
---------------------------------------------------------------------------

    \521\ CAISO Comments (2018 RM18-9) at 11.
    \522\ CAISO Comments (RM16-23) at 30-31.
    \523\ CAISO Comments (2018 RM18-9) at 11.
    \524\ Microgrid Resources Coalition (2018 RM18-9) at 9.
    \525\ Lorenzo Kristov Comments (2018 RM18-9) at 14.
    \526\ NYISO Comments (RM16-23) at 17. The Commission accepted
NYISO's tariff provisions related to aggregations, which require
that facilities within an aggregation are electrically connected to
the same transmission node. NYISO Aggregation Order, 170 FERC ]
61,033 at PP 6, 11.
---------------------------------------------------------------------------

    212. Other RTOs/ISOs assert that implementing the Commission's
proposal may be technically difficult. SPP states that implementing
distribution factors in the software is not trivial.\527\ MISO states
that it currently updates the distribution factors daily and that
updating more frequently may result in a significantly large amount of
data exchange and processing in the market system.\528\
---------------------------------------------------------------------------

    \527\ SPP Comments (RM16-23) at 19.
    \528\ MISO Comments (RM16-23) at 23.
---------------------------------------------------------------------------

    213. Several RTOs/ISOs also describe the limitations of
distribution factor requirements. SPP notes that distribution factors
provide the reliability coordinator with the distribution of the
resources in the aggregation, but those factors do not guarantee that
the resources in the aggregation will move pro-rata. SPP asserts that
the uncertainty in the aggregate response may cause a reliability issue
by introducing uncertainty in its effective dispatch to resolve
constraints. SPP adds that the economics and pricing of the aggregate
may not reflect the actual response on the sub-aggregate level.\529\
Similarly, ISO-NE also argues that distribution factors may vary based
on the actual level of dispatch of the aggregate, for example, there
could be a large difference between distribution factors based upon the
maximum MW output and the minimum MW output of an aggregation.\530\
Pacific Gas & Electric suggests that, because the distribution factors
will impact settlements and congestion, distributed energy resource
aggregations should use an outage management-like system to report if
real-time distribution factors differ from those that are used for the
market award.\531\
---------------------------------------------------------------------------

    \529\ SPP Comments (RM16-23) at 19-20.
    \530\ ISO-NE Comments (RM16-23) at 42-43.
    \531\ Pacific Gas & Electric Comments (RM16-23) at 19.
---------------------------------------------------------------------------

    214. Some commenters assert that the Commission should not impose
the distribution factor requirements in all regions. NYISO Indicated
Transmission Owners state that the application of distribution factors
may not be the optimal approach for dispatching resources within an
aggregation in all systems, especially if it leads to dispatching
resources on either side of a single constraint.\532\ NYISO Indicated
Transmission Owners argue that the Commission should require RTOs/ISOs
to develop solutions that are regionally appropriate and that promote
efficient dispatch of resources with effective resolution of
constraints on both the transmission and distribution systems.
---------------------------------------------------------------------------

    \532\ NYISO Indicated Transmission Owners Comments (RM16-23) at
20.
---------------------------------------------------------------------------

    215. Similarly, ISO-NE asks the Commission to allow each RTO/ISO to
develop an approach that works well in light of each region's
particular network configuration, infrastructure, and existing
operational processes.\533\ ISO-NE explains that, rather than providing
distribution factors, an aggregator could, for example, report the
expected MW capability at each node, or that size limits for being
dispatchable in the markets could be lowered, reducing the need to
aggregate across multiple nodes to participate.\534\ ISO-NE states
that, for a mesh network such as most of New England, using
distribution factors as the basis for dispatch is problematic.\535\
ISO-NE explains that a participant would be unable to predict the
changing power flows to multiple connected nodes without possessing the
same detailed knowledge of grid configuration used by ISO-NE and the
distribution utilities in real-time operations. As a result, ISO-NE
contends that any stated distribution factors could bear little
relation to real-time operations.
---------------------------------------------------------------------------

    \533\ ISO-NE Comments (RM16-23) at 41.
    \534\ Id. at 45.
    \535\ Id. at 42.
---------------------------------------------------------------------------

    216. ISO-NE contends that, in scenarios where the distribution
system is not radial to the transmission system, a single resource
located in the distribution network may have sensitivities to multiple
nodes in the transmission system.\536\ ISO-NE argues that it is not
reasonable for an aggregator to try to submit distribution factors for
each node as they would not have visibility to these sensitivities.
ISO-NE notes that it has addressed this problem with Asset-Related
Demand by only supporting aggregations of Asset-Related Demand that
have similar sensitivities to each node, so that an aggregated node can
be modeled to reflect the impacts to the system of the Asset-Related
Demand for which the Asset-Related Demand has a 100% distribution
factor. ISO-NE states that this approach may or may not be appropriate
for distributed energy resource aggregations and would require further
evaluation and coordination with the distribution utilities.\537\
---------------------------------------------------------------------------

    \536\ Id. at 44.
    \537\ Id. at 44-45.
---------------------------------------------------------------------------

    217. In response to the Commission's request for comment on whether
bidding parameters in addition to those already incorporated into
existing participation models may be necessary to adequately
characterize the physical or operational characteristics of distributed
energy resource aggregations, some commenters argue that RTOs/ISOs
should be allowed to require additional bidding parameters for
distributed energy resource aggregations to reliably operate the bulk
power system and accurately reflect resources in the wholesale
markets.\538\ Stem suggests that bidding parameters in current RTO/ISO
rules assume that a resource's physical attributes, such as ramp rate
or maximum charge limit, are fixed values and that the resource is
dispatchable to those levels at all times, which will need to
change.\539\ Stem argues that behind-the-meter resources should be able
to elect to be out of the market at certain times, as long as their
existing service obligations are met.\540\ PJM Market Monitor asserts
that, as long as distributed energy resources are priced and dispatched
locationally, the existing offer parameters should address the
characteristics of the resources.\541\ Dominion argues that distributed
energy resource aggregators should be allowed to communicate
distributed energy resource aggregations' operating limitations to the
RTO/ISO and control their dispatch to the same extent as other
resources.\542\ Dominion adds that certain distributed energy
resources, such as solar generators, should also have the option to
only be curtailed for reliability concerns.
---------------------------------------------------------------------------

    \538\ Dominion Comments (RM16-23) at 11; NYISO Comments (RM16-
23) at 17.
    \539\ Stem Comments (RM16-23) at 15, 16.
    \540\ Id. at 16.
    \541\ PJM Market Monitor Comments (2018 RM18-9) at 5.
    \542\ Dominion Comments (RM16-23) at 11.
---------------------------------------------------------------------------

    218. NYISO Indicated Transmission Owners assert that distributed
energy resource aggregations participating in capacity markets should
bid a capacity value that reflects the aggregation's

value in satisfying the peak period resource adequacy
requirements.\543\ NYISO Indicated Transmission Owners state that the
capacity value for distributed energy resource aggregations should take
into account various factors, such as variability of the aggregation,
extent to which the distributed energy resource aggregation is energy
limited, and composition of technologies that comprise the aggregation,
but underscores that solutions should be addressed during
implementation in each RTO's/ISO's stakeholder process to ensure
regional variations are accommodated.\544\
---------------------------------------------------------------------------

    \543\ NYISO Indicated Transmission Owners Comments (RM16-23) at
11.
    \544\ Id. at 11-12.
---------------------------------------------------------------------------

    219. MISO states that it needs more time to further investigate and
better understand the potential need for additional bidding parameters
for distributed energy resource aggregations.\545\ MISO asserts that
such parameters will likely be needed to the extent a distributed
energy resource may involve an aggregation of electric storage
resources and if the RTO/ISO is expected to manage their state of
charge. MISO explains that, as an example, distributed energy resource
aggregations might need to provide information describing sub-
aggregations for MISO to address security constraints associated with
separate distribution networks or separate nodes within a distribution
network.\546\
---------------------------------------------------------------------------

    \545\ MISO Comments (RM16-23) at 23.
    \546\ Id. at 23-24.
---------------------------------------------------------------------------

    220. Advanced Microgrid Solutions asserts that RTOs/ISOs must have
separate rules regarding attributes, bidding parameters, and dispatch
in order to recognize the multiple uses for behind-the-meter electric
storage resources.\547\ Advanced Microgrid Solutions further explains
that some requirements relevant to a single-site resource are
irrelevant for an aggregation.\548\ For instance, Advanced Microgrid
Solutions states that an aggregation of behind-the-meter resources does
not have an equivalent to a state of charge for a single-site
distributed energy resource to be used as a bidding parameter for a
fleet of aggregated distributed energy resources and, instead, the
aggregator must bid based on calculated availability and should be
penalized if the fleet does not perform as bid. Furthermore, Microgrid
Resources Coalition asserts that microgrids can also provide wholesale
services with suitable metering and controls but that their
participation is frequently restricted.\549\ Microgrid Resources
Coalition argues that it is important that the resource be able to
define the limits of participation within the aggregation, so that it
can be dispatched within its own limits, noting that an aggregation
would be subject to penalties if it cannot comply.
---------------------------------------------------------------------------

    \547\ Advanced Microgrid Solutions Comments (RM16-23) at 7.
    \548\ Id. at 8.
    \549\ Microgrid Resources Coalition Comments (RM16-23) at 6.
---------------------------------------------------------------------------

    221. EPRI states that an injection of energy from a resource on the
distribution system usually results in reduced losses as compared to
the same injection on the transmission bus.\550\ EPRI argues that this
reduction of losses is one of the substantial values that distributed
energy resources can provide and that this value should be reflected in
marginal prices at distributed energy resource locations.\551\ EPRI
states that the RTO/ISO may not be able to calculate the value without
information on the distribution system, so this value may need to be
included as a bidding parameter, which may require verification by the
distribution utility.
---------------------------------------------------------------------------

    \550\ EPRI Comments (RM16-23) at 28.
    \551\ Id. at 29.
---------------------------------------------------------------------------

    222. Several RTOs/ISOs do not believe that the Commission should
mandate additional universal bidding parameters. SPP believes that each
RTO/ISO should have the discretion to develop bidding parameters that
reflect their unique needs relative to their individual software and
applications.\552\ CAISO notes that its existing market participation
models available to distributed energy resource aggregations provide
the means to account for the physical and operational characteristics
of an aggregation and argues that no universal bidding parameters need
to be established.\553\
---------------------------------------------------------------------------

    \552\ SPP Comments (RM16-23) at 20.
    \553\ CAISO Comments (RM16-23) at 31.
---------------------------------------------------------------------------

    223. Duke Energy argues that any RTO/ISO bidding parameters must
treat all resources comparably and not favor certain new technologies
or resources over others.\554\ NRG contends that, for aggregations,
bidding parameters should generally match the appropriate participation
model. For example, NRG states generation bidding parameters should
apply to aggregations composed strictly of distributed generators, and
demand response bidding parameters should apply to aggregations
containing only load resources with no ability to net inject into the
system.\555\ NRG notes that the bidding parameters for bi-directional
resources should be general enough to encompass requirements of
distributed energy resource aggregators as well as storage-only
resources.
---------------------------------------------------------------------------

    \554\ Duke Energy Comments (RM16-23) at 6-7.
    \555\ NRG Comments (RM16-23) at 14.
---------------------------------------------------------------------------

    224. EPRI states that distribution factors are the primary unique
parameter, noting that they may need to be allowed to vary dynamically
in order for values to be as accurate as possible.\556\ EPRI also
suggests that the value of marginal distribution losses on the
distribution system is unique and may help the RTO/ISO determine
economically efficient resources.
---------------------------------------------------------------------------

    \556\ EPRI Comments (2018 RM18-9) at 5.
---------------------------------------------------------------------------

c. Commission Determination
    225. In this final rule, we adopt the NOPR proposal, as modified
below, and add Sec.  35.28(g)(12)(ii)(c) to the Commission's
regulations to require each RTO/ISO to establish market rules that
address distribution factors and bidding parameters for distributed
energy resource aggregations. Specifically, we require each RTO/ISO
that allows multi-node aggregations to revise its tariff to (1) require
that distributed energy resource aggregators give to the RTO/ISO the
total distributed energy resource aggregation response that would be
provided from each pricing node, where applicable, when they initially
register their aggregation and to update these distribution factors if
they change; \557\ and (2) incorporate appropriate bidding parameters
into its participation models as necessary to account for the physical
and operational characteristics of distributed energy resource
aggregations.\558\
---------------------------------------------------------------------------

    \557\ We note that distribution factors are only necessary to
the extent that distributed energy resources participating in an
aggregation are located at different nodes. This methodology would
apply only when distributed energy resources located at different
nodes participate in the same aggregation to provide a particular
market service.
    \558\ For example, such bidding parameters could include
response rates, ramp rates, and upper and lower operating limits.
See CAISO Tariff, Section <IP_ADDRESS>; NYISO Tariffs, NYISO MST,
Section <IP_ADDRESS>.3 (18.0.0).
---------------------------------------------------------------------------

    226. As the Commission explained in the NOPR, RTOs/ISOs need to
know which resources in a distributed energy resource aggregation will
be responding to their dispatch signals and where those resources are
located.\559\ As the Commission also explained in the NOPR, this
information is particularly important if the resources in a distributed
energy resource aggregation are located across multiple points of
interconnection, multiple transmission or distribution lines, or
multiple nodes on the grid.
---------------------------------------------------------------------------

    \559\ NOPR, 157 FERC ] 61,121 at P 142.
---------------------------------------------------------------------------

    227. Additionally, we agree with commenters that some bidding
parameters for existing participation models may not accommodate the

unique features of certain distributed energy resource aggregations,
and that different bidding parameters may be needed to recognize
distributed energy resources' multiple uses. Therefore, we further
modify the NOPR proposal to require that each RTO/ISO incorporate
appropriate bidding parameters into its participation models as
necessary to account for the physical and operational characteristics
of distributed energy resource aggregations. In meeting this
requirement, each RTO/ISO must either (1) incorporate appropriate
bidding parameters that account for the physical and operational
characteristics of distributed energy resource aggregations into its
one or more new participation models for such aggregations; and/or (2)
adjust the bidding parameters of the existing participation models to
account for the physical and operational characteristics of distributed
energy resource aggregations.
    228. We find that the revisions directed by this final rule will
provide distributed energy resource aggregators with the flexibility to
update their distribution factors and provide RTOs/ISOs with the
information needed to model aggregations accurately enough to issue
feasible dispatch instructions and maintain reliability.
    229. However, several commenters contend that requiring the RTOs/
ISOs to account for distribution factors and other bidding parameters
as described in the NOPR may be technically difficult to implement, or
of little benefit considering the RTO's/ISO's network configuration. In
light of this concern, we find that, in meeting this requirement, each
RTO/ISO may revise its tariff to manage the locational attributes of
distributed energy resource aggregations in a manner that reflects the
RTO's/ISO's unique network configuration, infrastructure, and existing
operational processes. We will evaluate, upon compliance, the RTO's/
ISO's proposal to ensure that it will provide the RTO/ISO with
sufficient information from resources in a multi-node distributed
energy resource aggregation that is necessary to reliably operate its
systems without imposing undue burden on individual distributed energy
resources or utility distribution companies.\560\ RTOs/ISOs that allow
multi-node aggregations must, at a minimum, propose clear protocols
explaining how a distributed energy resource aggregation can provide
the required information and update that information when needed.
---------------------------------------------------------------------------

    \560\ Id. P 143.
---------------------------------------------------------------------------

F. Information and Data Requirements

a. NOPR Proposal
    230. In the NOPR, the Commission proposed that the distributed
energy resource aggregator must initially provide to the RTO/ISO a
description of the physical parameters of the distributed energy
resource aggregation, including (1) the total capacity; (2) the minimum
and maximum operating limits; (3) the ramp rate; (4) the minimum run
time; and (5) the default distribution factors, if applicable.\561\ The
Commission also proposed to require each RTO/ISO to revise its tariff
to require each distributed energy resource aggregator to provide the
RTO/ISO with a list of the distributed energy resources in the
distributed energy resource aggregation that includes information about
each of those distributed energy resources, including each resource's
capacity, location on the distribution system, and operating limits. In
addition, the Commission proposed to require each RTO/ISO to revise its
tariff to require distributed energy resource aggregators to maintain
aggregate settlement data for the distributed energy resource
aggregation so that the RTO/ISO can regularly settle with the
distributed energy resource aggregator for its market
participation.\562\ Lastly, the Commission proposed to require
distributed energy resource aggregators to maintain data, for a length
of time consistent with the RTO's/ISO's auditing requirements, for each
individual resource in its distributed energy resource aggregation so
that each resource can verify its performance if audited. The
Commission sought comment on these proposed data requirements and on
whether there are information and data requirements imposed by RTOs/
ISOs that apply to other market participants that should not apply to
individual distributed energy resources participating in RTO/ISO
markets through a distributed energy resource aggregation.\563\
---------------------------------------------------------------------------

    \561\ Id. P 145.
    \562\ Id. P 147.
    \563\ Id. PP 146, 147.
---------------------------------------------------------------------------

b. Comments
    231. Some commenters support the NOPR proposal to require
information and data requirements for individual distributed energy
resources. CAISO, EEI, and Organization of MISO States support
requiring distributed energy resource aggregators to provide a list of
individual resources and their location and technical
capabilities.\564\ The New York Commission asserts that local
distribution utilities must have information on the activities of
distributed energy resources, even when they are only providing
wholesale services.\565\ However, Mosaic Power requests that electric
distribution companies address their operational need for information
in the least restrictive manner possible, given that account owner
registration requirements would create prohibitive costs under its
business model.\566\ ISO-NE and NYISO request that the Commission give
them flexibility to develop their own information and data requirements
and urge the Commission to provide only high-level guidance.\567\
---------------------------------------------------------------------------

    \564\ CAISO Comments (RM16-23) at 32; EEI Comments (RM16-23) at
31; Organization of MISO States Comments (RM16-23) at 8.
    \565\ New York Commission Comments (RM16-23) at 14.
    \566\ Mosaic Power Comments (RM16-23) at 6.
    \567\ ISO-NE Comments (RM16-23) at 46-47; NYISO Comments (RM16-
23) at 17.
---------------------------------------------------------------------------

    232. In contrast, many developers argue that information and data
requirements should only apply to the distributed energy resource
aggregation as a whole because (1) it is the single interface with the
RTO/ISO; and (2) it is not necessary for the RTO/ISO to model each and
every resource included in an aggregation to effectively model and
dispatch the aggregation.\568\ Efficient Holdings claims that failure
to account for the dynamic nature of a distributed energy resource
aggregation asset's performance capabilities and the likely turnover of
individual resources within a distributed energy resource aggregation
will place undue burden on these assets.\569\
---------------------------------------------------------------------------

    \568\ See, e.g., Advanced Microgrid Solutions Comments (RM16-23)
at 8; AES Companies Comments (RM16-23) at 41, 45-46; DER/Storage
Developer Comments (RM16-23) at 3-4; MISO Transmission Owners
Comments (RM16-23) at 22; Stem Comments (RM16-23) at 13-14.
    \569\ Efficient Holdings Comments (RM16-23) at 20.
---------------------------------------------------------------------------

    233. Several commenters believe RTOs/ISOs currently have
information and data requirements for other market participants that
should not apply to individual distributed energy resources
participating in RTO/ISO markets through an aggregation.\570\ For
example, CAISO explains that it has certain requirements that do not
apply to distributed energy resources in an aggregation (e.g., its
meteorological data requirements that apply to eligible intermittent
resources do not extend to a distributed energy resource aggregation)
and urges the Commission to maintain a degree of flexibility on this
issue.\571\ R Street Institute similarly

argues that requiring the same meteorological data for distributed
energy resource aggregators as stand-alone variable energy resources
could impose undue burdens on individual distributed energy
resources.\572\ MISO argues that current data communication methods
between MISO, the local balancing authority, and the generation
operator may be cost prohibitive for distributed energy resource
aggregators.\573\ However, several distribution utilities argue that
information and data requirements should be comparable for all
wholesale market participants.\574\
---------------------------------------------------------------------------

    \570\ CAISO Comments (RM16-23) at 33; Efficient Holdings
Comments (RM16-23) at 11, 19-20; R Street Institute Comments (RM16-
23) at 10.
    \571\ CAISO Comments (RM16-23) at 32-34.
    \572\ R Street Institute Comments (RM16-23) at 10.
    \573\ MISO Comments (2018 RM18-9) at 19.
    \574\ EEI Comments (RM16-23) at 31; Duke Energy Comments (RM16-
23) at 6; Xcel Energy Services Comments (RM16-23) at 26.
---------------------------------------------------------------------------

    234. Some commenters generally support the requirements for
distributed energy resource aggregators to maintain aggregate
settlement data \575\ and maintain data for a defined length of time,
consistent with the RTO's/ISO's auditing requirements, for each
individual resource in the aggregation so that each resource can verify
its performance if audited.\576\ However, Sunrun requests that RTOs/
ISOs only apply these requirements to the aggregation and not to
individual resources within the aggregation.\577\
---------------------------------------------------------------------------

    \575\ CAISO Comments (RM16-23) at 34; MISO Comments (RM16-23) at
25; Xcel Energy Services at 26.
    \576\ CAISO Comments (RM16-23) at 34; IRC Comments (RM16-23) at
10; SoCal Edison Comments (RM16-23) at 12-13.
    \577\ Sunrun Comments (RM16-23) at 5.
---------------------------------------------------------------------------

    235. Advanced Energy Buyers state that RTOs/ISOs should facilitate
streamlined data collection and sharing, including from the RTO/ISO to
the distribution utility, to enable data-driven planning and operation
to maximize efficiency, as well as to send good investment signals to
enable customers to prioritize delivery of distributed energy resources
where they will add maximum value.\578\
---------------------------------------------------------------------------

    \578\ Advanced Energy Buyers Comments (2018 RM18-9) at 7.
---------------------------------------------------------------------------

c. Commission Determination
    236. Upon consideration of the comments, we adopt the NOPR
proposal, with modifications, and add Sec.  35.28(g)(12)(ii)(d) to the
Commission's regulations to require each RTO/ISO to establish market
rules that address information requirements and data requirements for
distributed energy resource aggregations. Specifically, we require each
RTO/ISO to revise its tariff to (1) include any requirements for
distributed energy resource aggregators that establish the information
and data that a distributed energy resource aggregator must provide
about the physical and operational characteristics of its aggregation;
(2) require distributed energy resource aggregators to provide a list
of the individual resources in its aggregation; and (3) establish any
necessary information that must be submitted for the individual
distributed energy resources. We also require each RTO/ISO to revise
its tariff to require distributed energy resource aggregators to
provide aggregate settlement data for the distributed energy resource
aggregation and to retain performance data for individual distributed
energy resources in a distributed energy resource aggregation for
auditing purposes.
    237. With respect to the NOPR proposal that the distributed energy
resource aggregator initially provide to the RTO/ISO ``a description of
the physical parameters of the distributed energy resource
aggregation,'' \579\ we believe that the physical attributes of the
distributed energy resource aggregation as a whole may already be
captured by an RTO's/ISO's registration requirements for all market
participants or may otherwise be inapplicable to distributed energy
resource aggregations. Therefore, to avoid creating unnecessary or
redundant requirements for distributed energy resource aggregations and
to provide flexibility to the RTOs/ISOs, we do not adopt that proposal.
Rather, we require the RTOs/ISOs to revise their tariffs to establish
any necessary physical parameters that distributed energy resource
aggregators must submit as part of their registration process only to
the extent these parameters are not already represented in general
registration requirements or bidding parameters applicable to
distributed energy resource aggregations.
---------------------------------------------------------------------------

    \579\ NOPR, 157 FERC ] 61,121 at P 145.
---------------------------------------------------------------------------

    238. With respect to information requirements for individual
distributed energy resources, we do not adopt the NOPR proposal to
require each RTO/ISO to revise its tariff to require distributed energy
resource aggregators to provide the RTO/ISO with specific information
about each of the distributed energy resources in an aggregation,
including each resource's capacity, location on the distribution
system, and operating limits. Instead, we direct each RTO/ISO to revise
its tariff to require distributed energy resource aggregators to
provide a list of the individual distributed energy resources
participating in their aggregations to the RTO/ISO. If an RTO/ISO needs
additional information beyond this list, the RTO/ISO should identify
and explain in its compliance filing what additional specific
information about the individual distributed energy resources within an
aggregation that the RTO/ISO needs. The RTO/ISO should also propose how
the information requested must be shared with the RTO/ISO and affected
distribution utilities. As part of these tariff revisions, and as
further discussed in Section IV.I. below, each RTO/ISO must also
require that the distributed energy resource aggregator update that
list of individual resources and associated information as it changes.
We find that this approach provides greater flexibility to RTOs/ISOs
and imposes potentially less onerous requirements upon distributed
energy resource aggregators, while ensuring that necessary information
is conveyed to RTOs/ISOs.
    239. We also clarify that the distributed energy resource
aggregator, not an individual distributed energy resource in the
aggregation, is the single point of contact with the RTO/ISO, and the
aggregator would be responsible for managing, dispatching, metering,
and settling the individual distributed energy resources in its
aggregation. As such, the RTO/ISO may only need the information
necessary to model and dispatch the distributed energy resource
aggregation as a whole, and thus we agree with commenters that sharing
detailed information about the individual distributed energy resources
may be an unnecessary and unduly burdensome requirement. We believe
that the modified approach described above strikes a reasonable balance
between the information needs of RTOs/ISOs and the burden that
providing such information can place on distributed energy resource
aggregators seeking to participate in RTO/ISO markets.
    240. With respect to the aggregate settlement data for a
distributed energy resource aggregation, as well as performance data
for individual distributed energy resources in a distributed energy
resource aggregation, we find that these sets of information are
necessary for the participation of any type of resource in RTO/ISO
markets and to enable RTOs/ISOs to perform necessary audit functions.
Therefore, we adopt the NOPR proposal to require each RTO/ISO to revise
its tariff to require each distributed energy resource aggregator to
maintain and submit aggregate settlement data for the distributed
energy resource aggregation, so that the RTO/ISO can regularly settle
with the distributed energy resource aggregator for its market
participation,

and to provide, upon request from the RTO/ISO, performance data for
individual resources in a distributed energy resource aggregation for
auditing purposes.\580\ However, we clarify that the requirements for
settlement and performance data should be consistent with the
settlement and auditing data requirements for other market
participants. Additionally, while we believe that performance data for
individual distributed energy resources will be necessary for
distributed energy resource aggregations to comply with the data
retention and auditing procedures of the RTOs/ISOs, we are also
sympathetic to the concerns that data requirements for individual
distributed energy resources in a distributed energy resource
aggregation can be unduly burdensome. To reduce the burden on
distributed energy resource aggregators and the RTOs/ISOs, we find that
distributed energy resource aggregators should only be required to
retain that performance data for individual distributed energy
resources in an aggregation that the RTO/ISO deems necessary for
auditing purposes. Therefore, to the extent that an RTO/ISO does not
need certain performance data from individual distributed energy
resources in a distributed energy resource aggregation for auditing
purposes, it should not require a distributed energy resource
aggregator to retain that information for individual distributed energy
resources participating in a distributed energy resource aggregation.
With respect to Advanced Energy Buyers' assertion that RTOs/ISOs should
facilitate streamlined data collection and sharing, we decline to
prescribe the specific manner in which information and data should be
collected and shared with distribution utilities.
---------------------------------------------------------------------------

    \580\ See id. P 147.
---------------------------------------------------------------------------

G. Metering and Telemetry System Requirements

a. NOPR Proposal
    241. In the NOPR, the Commission stated that, while the distributed
energy resources in an aggregation will need to be directly metered,
the metering and telemetry system, i.e., hardware and software,
requirements RTOs/ISOs impose on distributed energy resource
aggregators and individual resources in distributed energy resource
aggregations can pose a barrier to the participation of these
aggregations in RTO/ISO markets.\581\ The Commission recognized that
RTOs/ISOs need metering data for settlement purposes and telemetry data
to determine a resource's real-time operational capabilities so that
they can efficiently dispatch resources. The Commission found, however,
that metering and telemetry systems are often expensive, potentially
creating a burden for small distributed energy resources. The
Commission stated that, while telemetry data about a distributed energy
resource aggregation is necessary for the RTO/ISO to efficiently
dispatch the aggregation, telemetry data for each individual resource
in the aggregation may not be.
---------------------------------------------------------------------------

    \581\ NOPR, 157 FERC ] 61,121 at P 150.
---------------------------------------------------------------------------

    242. The Commission stated that, while it did not propose to
require specific metering and telemetry systems for distributed energy
resource aggregators, it proposed to require each RTO/ISO to revise its
tariff to identify any necessary metering and telemetry hardware and
software requirements for distributed energy resource aggregators and
the individual resources in a distributed energy resource
aggregation.\582\ The Commission stated that these requirements must
ensure that the distributed energy resource aggregator can provide
necessary information and data to the RTO/ISO,\583\ but must not impose
unnecessarily burdensome costs on the distributed energy resource
aggregators or individual resources in a distributed energy resource
aggregation that may create a barrier to their participation in the
RTO/ISO markets.
---------------------------------------------------------------------------

    \582\ Id. P 151.
    \583\ Id. (citing the Commission's proposal pertaining to
information and data requirements).
---------------------------------------------------------------------------

    243. The Commission noted that there may be different types of
resources in these aggregations, some in front of the meter, some
behind the meter with the ability to inject energy back to the grid,
and some behind the meter without the ability to inject energy to the
grid.\584\ The Commission therefore sought comment on whether the RTOs/
ISOs need to establish metering and telemetry hardware and software
requirements for each of the different types of distributed energy
resources that participate in the RTO/ISO markets through distributed
energy resource aggregations as well as whether the Commission should
establish specific metering and telemetry system requirements and, if
so, what requirements would be appropriate.
---------------------------------------------------------------------------

    \584\ Id. P 151.
---------------------------------------------------------------------------

    244. With respect to telemetry, the Commission stated that the
distributed energy resource aggregator should be able to provide to the
RTO/ISO the real-time capability of its aggregated resource in a manner
similar to the requirements for generators, including the operating
level of the resource and how much that resource can ramp up or ramp
down over its full range of capability, including its charging
capability for distributed energy resource aggregations that include
electric storage resources.\585\ The Commission further noted that
these telemetry system requirements may also need to be in place at
different locations for geographically dispersed distributed energy
resource aggregations that have to provide distribution factors or
other similar information.
---------------------------------------------------------------------------

    \585\ Id. P 152.
---------------------------------------------------------------------------

    245. With respect to metering, the Commission recognized that
distributed energy resources may be subject to metering system
requirements established by the distribution utility or local
regulatory authority.\586\ Therefore, the Commission proposed that each
RTO/ISO rely on meter data obtained through compliance with these
distribution utility or local regulatory authority metering system
requirements whenever possible for settlement and auditing purposes,
only applying additional metering requirements for distributed energy
resource aggregations when this data is insufficient.
---------------------------------------------------------------------------

    \586\ Id.
---------------------------------------------------------------------------

b. Comments
    246. In their comments, the various RTOs/ISOs describe slightly
different approaches to metering and telemetry requirements for
distributed energy resource aggregations. CAISO states that, under its
Distributed Energy Resource Provider model, the aggregator must follow
the same metering and telemetry standards as other resources.\587\
NYISO states that it will propose to require distributed energy
resource aggregators to have six-second real-time metering and
telemetry that will be sent either directly to NYISO or through the
utility and to provide after-the-fact meter data uploads for settlement
purposes.\588\ ISO-NE states that individual distributed energy
resources in an aggregation should meet

the same product-based metering and telemetry requirements as all other
resources, whether the distributed energy resource is behind the meter
or in front and whether or not it can inject power into the grid.\589\
PJM states that, generally, it is reasonable for behind-the-meter
distributed energy resources that seek to inject power onto the grid
(either individually or as part of a distributed energy resource
aggregation) to follow existing telemetry and metering rules from the
generation framework for similarly sized resources, noting that
metering and telemetry rules for generation may vary by resource
size.\590\
---------------------------------------------------------------------------

    \587\ CAISO Comments (RM16-23) at 38.
    \588\ NYISO Comments (RM16-23) at 18-19. NYISO's Aggregation
Participation Model, accepted by the Commission on January 23, 2020,
requires that (1) aggregations provide real-time telemetry every six
seconds; (2) NYISO send real-time base point signals to, receive
revenue-quality meter data for settlement purposes from, and receive
real-time telemetry from an aggregation, not the individual
facilities within an aggregation; (3) aggregations of like resource
types are subject to the existing metering and telemetry rules for
that resource type; and (4) metering and telemetry of the individual
facilities in an aggregation derive from either directly measured or
calculated values, or a combination thereof, in accordance with the
requirements set forth in NYISO's procedures. See NYISO Aggregation
Order, 170 FERC ] 61,033 at PP 57-74.
    \589\ ISO-NE Comments (RM16-23) at 48-50.
    \590\ PJM Comments (RM16-23) at 22 (citing PJM Manual 14D:
Generation Operational Requirements, rev. 40, section 4.2.2 (Jan. 1,
2017)).
---------------------------------------------------------------------------

    247. A number of commenters support the Commission's proposal to
provide the RTOs/ISOs with flexibility to establish and implement
metering and telemetry rules to suit their individual needs.\591\ CAISO
states that local regulatory authorities already impose metering and
telemetry standards and that RTOs/ISOs need flexibility to incorporate
those local requirements without imposing additional costs or barriers
to entry on prospective distributed energy resource aggregations.\592\
A number of other commenters make similar points.\593\ ISO-NE
recommends that the Commission avoid being overly prescriptive so that
ISO-NE can apply existing metering and telemetry requirements to
distributed energy resources.\594\ SoCal Edison asks that the
Commission not issue a standard directive but rather encourage the
distribution utilities in an RTO/ISO to work together with the RTO/ISO
to continue the development of appropriate metering and telemetry
technologies.\595\ IRC asserts that RTOs/ISOs should be given the
flexibility to define metering and telemetry requirements outside of
their tariffs.\596\ Tesla argues that RTOs/ISOs should allow
alternatives to metering and telemetry requirements that could provide
the needed information, such as sampling, end-use metering devices, or
verifiable behavioral actions.\597\
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    \591\ See, e.g., CAISO Comments (RM16-23) at 38; IRC Comments
(RM16-23) at 10; ISO-NE Comments (RM16-23) at 48; New York State
Entities Comments (RM16-23) at 21; SoCal Edison Comments (RM16-23)
at 14-15.
    \592\ CAISO Comments (RM16-23) at 38.
    \593\ See, e.g., Advanced Energy Economy Comments (2018 RM18-9)
at 9; Advanced Energy Management Comments (2018 RM18-9) at 22-23;
Microsoft Comments (2018 RM18-9) at 18 (citing Justin Gundlach &
Romany Webb, Distributed Energy Res. Participation in Wholesale
Markets: Lessons from the California ISO, 39 ENERGY L. REV. 47, 68-
69 (2018)); NRG Comments (2018 RM18-9) at 3; Tesla Comments (2018
RM18-9) at 10-11 (citing NOPR, 157 FERC ] 61,121 at P 150).
    \594\ ISO-NE Comments (RM16-23) at 48.
    \595\ SoCal Edison Comments (RM16-23) at 14-15.
    \596\ IRC Comments (RM16-23) at 10.
    \597\ Tesla Comments (2018 RM18-9) at 10-11.
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    248. Other commenters contend that the Commission should take a
more active role in establishing specific metering and telemetry
requirements for distributed energy resource aggregations. MISO
believes that it is appropriate for the Commission to define the
telemetry and metering requirements,\598\ while others suggest that the
Commission establish a set of standards or generally applicable
criteria but allow RTOs/ISOs flexibility on how those standards are
implemented or to exceed the Commission's requirements.\599\
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    \598\ MISO Comments (RM16-23) at 25.
    \599\ Fresh Energy/Sierra Club/Union of Concerned Scientists
Comments (RM16-23) at 3; Independent Energy Producers Association
Comments (RM16-23) at 5; PJM Comments (RM16-23) at 22.
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    249. Several commenters acknowledge that metering and telemetry
requirements for distributed energy resource aggregators and individual
resources participating in distributed energy resource aggregations can
pose a barrier to the participation of these resources in RTO/ISO
markets.\600\ Advanced Energy Management and R Street Institute note
that the costs of metering, telemetry, and communication equipment pose
a disproportionately high burden for small distributed energy resources
because they cannot spread the cost across as many MWs as large
generators.\601\ Advanced Energy Economy requests that the Commission
clarify that real-time and short interval telemetry is not required for
distributed energy resource aggregations and individual distributed
energy resources.\602\
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    \600\ See, e.g., Advanced Energy Management Comments (RM16-23)
at 17-18; New York State Entities Comments (RM16-23) at 21; NextEra
Comments (RM16-23) at 15-16; Public Interest Organizations Comments
(RM16-23) at 14; R Street Institute Comments (RM16-23) at 10.
    \601\ Advanced Energy Management Comments (RM16-23) at 18; R
Street Institute Comments (RM16-23) at 10.
    \602\ Advanced Energy Economy Comments (RM16-23) at 47.
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    250. Several commenters argue that telemetry requirements
comparable to those of traditional generators would be too burdensome,
even if imposed only at the aggregation level.\603\ Advanced Energy
Economy asserts that such requirements would be prohibitively expensive
and unnecessary to ensure reliability because equipment would need to
be installed at every distributed energy resource site to obtain
accurate readings.\604\ These commenters and others instead suggest
that telemetry requirements, particularly with respect to timing
granularity, should be commensurate to the need of the system and
service provided.\605\ Advanced Energy Management recommends that
virtual telemetry with after-the-fact meter data be allowed for
aggregators of small resources.\606\ Further, Advanced Energy
Management recommends that the Commission not require that distributed
energy resource aggregators that participate only in capacity markets
implement new telemetry requirements.\607\
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    \603\ Id. at 48; Advanced Energy Management Comments (RM16-23)
at 17; City of New York Comments (RM16-23) at 9.
    \604\ Advanced Energy Economy Comments (RM16-23) at 48.
    \605\ Id.; Advanced Energy Management Comments (RM16-23) at 18;
City of New York Comments (RM16-23) at 9; Energy Storage Association
Comments (RM16-23) at 25; Public Interest Organizations Comments
(RM16-23) at 24.
    \606\ Advanced Energy Management Comments (RM16-23) at 18-19.
Advanced Energy Management describes virtual telemetry as
statistical forecasting of an aggregated resource's performance,
generally monitored by some form of communications to confirm
aggregated resource performance, which provides the aggregator or
scheduling coordinator a signal to send to the RTO/ISO.
    \607\ Id.
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    251. Several commenters assert that metering and/or telemetry
requirements are necessary only at the aggregation level, and that
telemetry requirements on individual distributed energy resources would
be cost prohibitive and unnecessarily burdensome.\608\ Public Interest
Organizations, New York State Entities, and Advanced Energy Economy
state that grid operators do not need telemetry information about each
distributed energy resource in an aggregation because the loss of one
would not interfere with system reliability or with the operation of
the aggregation, and these parties request clarification that such
telemetry is not required.\609\ NRG and Advanced Energy Economy contend
that the aggregator should be responsible for providing metering and
telemetry that meets the RTO/ISO requirements to ensure that the
aggregated performance of the distributed energy resources meets the

claimed and offered performance.\610\ Stem asks that each RTO/ISO be
required to justify any metering and telemetry rules regarding
individual resources in an aggregation.\611\
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    \608\ See, e.g., AES Companies Comments (RM16-23) at 36; Energy
Storage Association Comments (RM16-23) at 25; New York State
Entities Comments (RM16-23) at 20; Public Interest Organizations
Comments (RM16-23) at 14-15; R Street Institute Comments (RM16-23)
at 10.
    \609\ Advanced Energy Economy Comments (RM16-23) at 49; New York
State Entities Comments (RM16-23) at 20; Public Interest
Organizations Comments (RM16-23) at 14-15.
    \610\ Advanced Energy Economy Comments (RM16-23) at 49-50; NRG
Comments (RM16-23) at 10.
    \611\ Stem Comments (RM16-23) at 14.
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    252. Other commenters argue that metering and telemetry
requirements are important for reliability and should be the same for
distributed energy resource aggregations as for any other resource
type.\612\ EEI argues that this is important so the RTO/ISO knows the
operating level of the resource and how much that resource can ramp up
or ramp down over its full range of capability.\613\ Energy Storage
Association agrees, as long as the telemetry allows distributed energy
resource aggregations to provide the same products and services as
traditional generators.\614\ PJM also agrees, but notes that smaller
resources have lower-cost telemetry requirements in its market.\615\
EPSA asserts that estimation, sampling, and other inexact methods
provide insufficient precision and, therefore argues that distributed
energy resources should be subject to the same metering requirements as
traditional supply resources.\616\ NYISO Indicated Transmission Owners
contend that the cost of new or additional communications requirements
should be considered a prerequisite to maintain the reliability of the
system rather than a barrier to entry.\617\
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    \612\ See, e.g., EEI Comments (RM16-23) at 34; Energy Storage
Association Comments (RM16-23) at 25; ISO-NE Comments (RM16-23) at
48-50; New York Utility Intervention Unit Comments (RM16-23) at 3-5;
TAPS Comments (RM16-23) at 23.
    \613\ EEI Comments (RM16-23) at 34.
    \614\ Energy Storage Association Comments (RM16-23) at 25.
    \615\ PJM Comments (RM16-23) at 22.
    \616\ EPSA Comments (2018 RM18-9) at 10, 13.
    \617\ NYISO Indicated Transmission Owners Comments (RM16-23) at
19.
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    253. Some commenters argue that metering and telemetry requirements
should be placed on individual distributed energy resources within an
aggregation.\618\ Multiple commenters argue that distributed energy
resources need to be directly metered to distinguish between wholesale
and retail actions.\619\ MISO believes that it is appropriate for the
Commission to identify the criteria and process for differentiating
retail versus wholesale transactions of distributed energy
resources.\620\ TAPS states that RTOs/ISOs should require telemetry on
individual distributed energy resources for situational awareness and
so that facilities are not inadvertently directed to operate beyond
physical capabilities.\621\ Moreover, ISO-NE argues that statistical
estimation of an aggregation's output rather than direct metering and
telemetry of individual distributed energy resources introduces error
and that the impact of using estimation to determine distribution
factors is not clear.\622\ PJM and the IRC request that the Commission
establish that RTOs/ISOs have the right to require metering and
telemetry for individual distributed energy resources comparable to
traditional resources in order to avoid seams issues and inconsistent
industry roll-out.\623\ Avangrid cautions that even with separate
metering, ownership and reconciliation of the data for retail billing
and wholesale settlement may be impractically complex.\624\ NYISO
Indicated Transmission Owners assert that resources above a certain
size and within an aggregation may require additional metering to
mitigate issues on a utility's distribution system.\625\
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    \618\ See, e.g., DER/Storage Developers Comments (RM16-23) at 4;
Independent Energy Producers Association Comments (RM16-23) at 8;
ISO-NE Comments (RM16-23) at 48-50; NYISO Indicated Transmission
Owners Comments (RM16-23) at 19; Organization of MISO States
Comments (RM16-23) at 9.
    \619\ Avangrid Comments (RM16-23) at 15; Independent Energy
Producers Association Comments (RM16-23) at 8; ISO-NE Comments
(RM16-23) at 48-50; Organization of MISO States Comments (RM16-23)
at 9.
    \620\ MISO Comments (RM16-23) at 25.
    \621\ TAPS Comments (RM16-23) at 23.
    \622\ ISO-NE Comments (RM16-23) at 51.
    \623\ PJM Comments (RM16-23) at 22.
    \624\ Avangrid Comments (RM16-23) at 15.
    \625\ NYISO Indicated Transmission Owners Comments (RM16-23) at
7.
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    254. Several commenters agree with the Commission that telemetry
system requirements may need to be in place at different locations for
geographically dispersed distributed energy resource aggregations that
have to provide distribution factors.\626\ PJM Market Monitor argues
that meter and telemetry information should be disaggregated at each
node and that the RTO/ISO should provide nodal settlement.\627\ MISO
Transmission Owners argue that it is not clear how multi-node
aggregations would be settled.\628\ AES Companies contend that the
Commission should permit the aggregation to include more than one
metering point where the system characteristics indicate more are
needed.\629\ Duke Energy maintains that RTOs/ISOs should have access to
telemetry information at individual points of interconnection and that
the distribution utility may need to access similar data.\630\
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    \626\ AES Comments (RM16-23) at 36; Duke Energy Comments (RM16-
23) at 5; EEI Comments (RM16-23) at 34; MISO Transmission Owners
Comments (RM16-23) at 24.
    \627\ PJM Market Monitor Comments (RM16-23) at 15.
    \628\ MISO Transmission Owners Comments (RM16-23) at 24.
    \629\ AES Companies Comments (RM16-23) at 37.
    \630\ Duke Energy Comments (RM16-23) at 5.
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    255. Most commenters support the proposal in the NOPR that, when
existing distribution utility metering requirements for distributed
energy resources are sufficient, RTOs/ISOs should rely on that
technology rather than impose new requirements.\631\ Avangrid argues
that the distribution utility might be able to provide the necessary
data to the RTO/ISO on behalf of the distributed energy resource
aggregator via a third-party agreement.\632\
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    \631\ See, e.g., Advanced Energy Management Comments (RM16-23)
at 18-19; EEI Comments (RM16-23) at 33; Mosaic Power Comments (RM16-
23) at 5-6; SoCal Edison Comments (RM16-23) at 14-15; TAPS Comments
(RM16-23) at 24.
    \632\ Avangrid Comments (RM16-23) at 15. Avangrid adds that the
electric distribution companies should be allowed to charge for this
service.
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    256. APPA/NRECA express concern that the proposal to rely on meter
data from the distribution utility would place significant burdens on
distribution utilities and introduce new cybersecurity and privacy
implications, issues which will require significant time and resources
for utilities to address.\633\ APPA asserts that such costs could
undermine the benefits of distribution utilities' existing retail
distributed energy resource programs, effectively imposing costs on
retail customers to subsidize wholesale market participation.\634\