Whitehouse, Markey Lead Senators in Urging Action on Key FERC Renewables Rule

Washington, DC – Sixteen Senators, led by Sheldon Whitehouse (D-RI) and Edward J. Markey (D-MA), are urging the Federal Energy Regulatory Commission (FERC) to finish work on a rule to pave the way for Americans to connect their rooftop solar, wind, and energy storage devices to the electrical grid.  Allowing these distributed energy resources (DER) better access to America’s power distribution system would help to grow a more flexible and resilient grid and lower prices for consumers, the Senators note.

“FERC recently found that increasing DER usage could increase security and resiliency of the grid,” the Senators write in a letter to FERC.  “As usage of DERs increases, utilities, state public utility commissions, federal regulators, and stakeholders should work together to integrate consumer-supplied DERs into the grid.  This will enable consumers to play a central role in strengthening reliability and avoiding unnecessary costs by supplying localized energy services.  Technology-neutral wholesale markets that account for DER can complement grid modernization while lowering costs for consumers and improving grid reliability and resilience.”

Senators Martin Heinrich (D-NM), Jeanne Shaheen (D-NH), Richard Blumenthal (D-CT), Maggie Hassan (D-NH), Angus King (I-ME), Dianne Feinstein (D-CA), Bernie Sanders (I-VT), Catherine Cortez-Masto (D-NV), Jack Reed (D-RI), Ron Wyden (D-OR), Jeff Merkley (D-OR), Kamala Harris (D-CA), Cory Booker (D-NJ), and Brian Schatz (D-HI) joined Whitehouse and Markey in signing the letter. 

The FERC rule would help renewable energy aggregators—like utilities and energy cooperatives—to integrate distributed energy resources into capacity and energy markets nationwide.  In March, the Commission said it needed additional information before moving forward with the rule.  In April, the Commission held a technical conference where stakeholders from around the country agreed that federal guidance, of the sort outlined in the DER rule, would be more effective than letting state and regional regulators create their own patchwork of rules.

Renewable energy is an increasingly important part of America’s energy mix and a key employer.  The renewable energy industry currently employs over 677,000 Americans and provides 15 percent of our energy supply. 

Distributed energy resources’ share of America’s energy mix is growing rapidly, driven by consumer demand for products like smart thermostats, electric vehicles, and renewable energy generation and storage technology.  In 2016, DERs accounted for an estimated two percent of installed generation capacity in the U.S., according to the Energy Information Administration.  New distributed solar, like rooftop installations, made up nearly 12 percent of added electric energy capacity nationwide.

In February, FERC finished work on a related rule to require regional grid operators to better integrate energy storage into their grids.  Whitehouse and Markey have led colleagues in pressing FERC to finalize both the DER and energy storage rules, pointing out that the proposals would aid grid operators in bringing renewables online to compete with fossil fuels while improving reliability and reducing costs for customers.  As part of this effort, the senators met with FERC Commissioner Neil Chatterjee before his confirmation last year to discuss the important role FERC plays in growing the renewable energy industry.

Text of the Senators letter is below.  A PDF copy is available here.

May 23, 2018

Mr. Kevin McIntyre

Chairman

Federal Energy Regulatory Commission

888 First Street NE

Washington, DC 20426

Re: Docket No. RM18-9-000

Dear Chairman McIntyre:

In February, the Federal Energy Regulatory Commission (FERC) made significant progress to improve energy market competition and innovation by finalizing a multi-year rulemaking process on energy storage.  Simultaneously, FERC began a process to remove barriers and allow for distributed energy resources (DERs) and renewable aggregators to integrate into capacity and energy markets.  FERC proceeded with a technical conference to further discuss reforms in this area.  Now that FERC’s DER technical conference is complete, we write today to urge you to move forward and finalize guidance to Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) on DER grid integration.

DER adoption and renewable energy aggregation continue to grow in the United States, driven by state and federal policies as well as consumers choosing cost-competitive innovative technologies such as smart thermostats, electric vehicles, and customer-sited energy generation and storage. The Energy Information Administration estimated in 2016 that DERs accounted for about two percent of the installed generation capacity in the U.S.  Distributed solar growth made up nearly 12 percent of new capacity additions^[1].  FERC recently found that increasing DER usage could increase security and resiliency of the grid.  As usage of DERs increases, utilities, state public utility commissions, federal regulators, and stakeholders should work together to integrate consumer-supplied DERs into the grid. This will enable consumers to play a central role in strengthening reliability and avoiding unnecessary costs by supplying localized energy services.  Technology-neutral wholesale markets that account for DER can complement grid modernization while lowering costs for consumers and improving grid reliability and resilience.

As you know, FERC held a technical conference on April 10-11, 2018, and opened Docket No. RM18-9-000 to gather feedback from stakeholders.  At this meeting, there was consensus from utilities and grid operators that without better real-time data of where DERs are located on the grid, consumers could see higher prices because generation could run when it is not needed.  There was also agreement that a unified national framework accounting for these resources would be more effective than having each RTO/ISO to develop its own solution.  We encourage FERC to build on these areas of agreement in the implementation of FERC’s recently finalized energy storage rulemaking, and work with stakeholders to finalize a rule for DERs to participate in wholesale markets.

Continued action by FERC to remove market barriers for advanced energy technologies can contribute to grid resilience and versatility, and lower prices for consumers.  We commend your work on finalizing the energy storage rulemaking, and urge you to move forward on developing a DER guidance. 

We would appreciate an update on your efforts no later than June 15, 2018. 

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