In the July 7 meeting of the Resource Adequacy Subcommittee (RASC), MISO initiated discussion of Order 2222 Distributed Energy Resource (DER) Aggregation Capacity and Accreditation. Stakeholders were asked to provide feedback on two questions:
Comments are due by July 21.
To MISO Stakeholders:
Voltus provides the following comments in response to Issue IR070.
MISO Prompt 1: How can DER be aggregated in MISO's capacity construct?
Voltus objects to two aspects of MISO’s current proposal to DER aggregation for capacity.
Firstly, DER aggregators should be able to aggregate at a higher level than EPNode - restricting aggregation to such a small geographic region is a de-facto ban on DER aggregation itself, especially in the near-term as DER market penetration remains nascent. Order No. 2222 requires ISOs to allow aggregations that are “as geographically broad as technically feasible.” There is no technical barrier that would bar ARCs from aggregating DERs at the CPNode level or higher, rather than by EPNode. Aggregators are already technically capable of aggregating resources at a higher level than EPNode - this is evident in the hundred of megawatts of Demand Response Resources, as well as several gigawatts of Load Modifying Resources and Emergency Demand Response that are currently active in MISO.
Capacity resources are dispatched by load balancing authority, and capacity pricing is set by zone. While energy pricing is set on an EPNode level, any energy settlements for DERa’s can be accommodated in the existing construct that is performed for DRR1s, delineated in Section 4.2 of BPM 26 - “CPNode LMP Determination.” Therefore, at the very least, aggregation should be allowed at the CPNode level.
Additionally, forcing smaller aggregations places an unnecessary burden on the RTO registration, modeling, and settlement processes due to the greater number of resources within MISO’s footprint. MISO should simplify each of these steps by allowing higher-level aggregation and letting ARCs handle the complexity of managing and settling with individual sites.
Secondly, Voltus objects to the minimum aggregate size of 100 kW. While Voltus understands MISO’s motivation to reduce complexity of the network model, enabling the participation of smaller, distributed resources is essential as we look towards a future of distributed generation and loads, residential scale renewable energy, smart devices and electric vehicles. Additionally, finding loads at the nodal level that can aggregate to more than 100 kW will prove difficult for aggregators, especially if that aggregation is done at an EPNode level. Voltus is not proposing that the minimum size requirement be eliminated but rather that it be lowered.
MISO Prompt 2: How should heterogeneous aggregation of DER be accredited for capacity?
Voltus agrees with MISO’s Alternative 3, the “Two-phased approach: DERA provide MISO amount to participate in MISO market for accreditation of new resources with no operating history. Historic availability data will be used for accreditation when a resource has sufficient operating data.” This allows for the participation of new resources while validating the load of existing resources.
DERs should be accredited by their statistical ability to contribute generation during peak load hours. For demand response, dispatchable generation, energy efficiency, and dispatchable energy storage, accreditation can match existing precedent for LMR capacity credits. Intermittent resources can be accredited based on statistical generation based on nameplate capacity during expected peak load hours.
_____________________
Voltus, Inc.
(703) 785-8269
The following feedback is offered by the Entergy Operating Companies ("EOCs")[1] in response to the request made during the July 7th, 2021 Resource Adequacy Subcommittee meeting concerning capacity and accreditation under FERC Order 2222. In general, the EOCs agree with MISO, that at least where practical, existing capacity resource rules for participation and accreditations in the capacity market should be used to accommodate DERAs in initial compliance with Order 2222. Below is a more detailed response to the individual questions posed by MISO.
How can DER be aggregated in MISO's capacity construct?
The EOCs agree that DER resources that meet Order 2222 requirements should be allowed to participate and aggregate under one of the current planning resource types. The EOCs further agree that the aggregations should be done at a single EPNode.
How should heterogeneous aggregation of DER be accredited for capacity?
In MISO’s proposed use of a two-phased approach for heterogeneous aggregations, MISO should require the DERA to use historical performance data for any part of the aggregation to the extent that it is available in phase I. Then in the following auction, the aggregation would be accredited as a whole based on its heterogeneous performance. In any event, any and all other requirements of a like resource should be met. These would include among other things, testing, measurement, validation by MISO/EDC, and credit requirements
If these resources become more prevalent in MISO’s markets, the testing and proving of a DER’s (or DERA’s) performance capability will be key to preventing the accumulation of MW that may not be capable of performing the service they are seeking to provide. As such, it is important that firm and verifiable requirements be established. Order 2222 specifically requires a DO (or distribution utility (DU)) review process that includes criteria by which the DO would use to determine the performance capability of the DERs participating in a DERA and whether such participation will pose significant risks to the reliable and safe operation of the distribution system.
The EOCs appreciated the opportunity to comment.
[1] The Entergy Operating Companies are Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, and Entergy Texas, Inc.
DTE appreciates the opportunity to provide feedback on the topic of accreditation for Distributed Energy Resource Aggregations.
As a process matter, MISO’s discussion on this topic was highly abbreviated given the other topics on the RASC agenda. MISO Staff should come back to the RASC with more detail on how these proposals would impact DERas and how they would align with MISO’s current accreditation constructs. Illustrative examples for both homogeneous and heterogeneous resources would help to enable this discussion.
With respect to substantive matters, DTE generally agrees with the principle that DERa accreditation should leverage existing rules for participation and accreditation in the capacity market. MISO’s resource adequacy construct, including accreditation rules, are the subject of much broader discussions through the stakeholder process, and the accreditation of resources such as conventional generation, renewable generation, and others will continue to evolve. MISO’s accreditation of DERas should align with these constructs even though they will likely be a moving target in the coming years.
DTE notes that the wording "Allow DER to aggregate up to a minimum of 0.1 MW under existing planning resource types” is somewhat unclear. Does this mean that an aggregation needs to be composed of 0.1 MW blocks of DERs which correspond to existing resource types (e.g., 0.1 MW Dispatchable Intermittent Resource, 0.1 MW Energy Storage Resource, 0.1 MW conventional generation)? Per the process comments above, illustrative examples would be helpful to clarify MISO’s intent with these alternatives.
Xcel Energy appreciates the opportunity to provide feedback regarding capacity accreditation of DER aggregations.
Aggregation of DER in MISO's Capacity Construct
We are supportive of MISO's proposed approach to allow DER to aggregate up to a minimum of 0.1 MW under existing planning resource types and allowing the same aggregation level (EPNode) as the commercial model. This leverages MISO’s existing resource types instead of creating a new resource type that may not be needed and applies the proposed aggregation level.
Capacity Accreditation for Heterogeneous Aggregations of DER
Our concern with MISO's proposed approach is that there appears to be no guidance for the DERA to calculate the amount of injection prior to the collection of operating data. It seems more reasonable to apply the default capacity accreditation values of each resource type and then sum these values across the DERa prior to the availability of sufficient operational data. This is the same approach that MISO recently proposed for capacity accreditation of hybrid resources.
Advanced Energy Management Alliance (“AEMA”) [1] respectfully submits the following comments to the MISO Resource Adequacy Sub-Committee (“RASC”) on the feedback request related to DER Aggregation Capacity and Accreditation that was presented at the July 7, 2021, meeting of the RASC. AEMA is a trade association under Section 501(c)(6) of the Federal tax code whose members include national distributed energy resource companies and advanced energy management service and technology providers, including demand response (“DR”) providers, as well as some of the nation’s largest demand response and distributed energy resources. AEMA members support the beneficial incorporation of distributed energy resources (“DER” or “DERs”), including advanced energy management solutions, into wholesale markets as a means to achieving electricity cost savings for consumers, contributing to system reliability, and ensuring balanced price formation. These comments represent the collective consensus of AEMA as an organization, although they do not necessarily represent the individual positions of the full diversity of AEMA member companies.
AEMA appreciates the opportunity to share the following feedback on the MISO presentation. For a typical DERA, the ability to receive accreditation as a capacity resource is a critical element of efficient and economic DERA participation in the overall MISO market. The rules for accreditation are critical to ensuring there is just and reasonable treatment of these valuable resources. AEMA offers the following response to the specific feedback requested:
In the MISO proposal to the RASC, MISO staff presented a directional set of recommendations. Although AEMA generally supports the direction proposed by MISO, more detail is needed on how the proposal would work. For example, MISO states it “intends on leveraging existing participation and accreditation rules for similar resource types to accommodate DERa participation.” It would be helpful to see a matrix of what those rules are for the various types of resources. This matrix will help DER Aggregators who specialize in managing aggregations of DER to understand how the participation and accreditation rules will work. For example, it would be helpful to compare the testing and performance requirements for the various resource types for which a DERA may choose to register a DERa.
Clarity is needed on how the capacity credit given to the overall aggregation will be handled when there is an assortment of DER types within the aggregation. For example, a DERA may register as a Stored Energy Resource (SER), but be composed of BTMG, DR and Battery Resources. Although the aggregation is best modeled as an SER, it consists of various and differing resources within the higher-level participation model. Is MISO proposing this resource only qualifies for SER credit? Will the testing requirements be identical to SER, although the DERa contains BTMG and DR?
On slide 6, MISO shares their “Benefits” and “Assumptions,” stating “DERA must be able to provide historic injections to the MISO system.” This might be interpreted as only referring to those resources “injecting,” although many DERs may simply net against load or could be load reductions. MISO should clarify what is meant by this “historic injections” assumptions. Also, MISO should explain the purpose of this assumption/requirement to create the “history.” Is this “history” to be used for accreditation purposes? If so, then the “history” requirement should only begin after registration/participation begins, since many individual resources may not have a detailed and documented history of performance.
In the proposal, MISO suggests it will utilize “existing planning resource types,” as opposed to creating a “new planning resource type.” However, in the MISO DER Task Force, MISO stated it will create a new participation model for DER aggregations, similar to SER and DIR. As MISO moves forward with this new participation model, how would this type of model be accredited for capacity purposes? While it makes sense for a DERa, registered as a Generator, to receive capacity treatment like a Generator; a new market participation model should have a new planning resource type fitting the unique characteristics, as opposed to forcing it into an existing model.
MISO proposed a “two-phased approach,” with the DERA providing the following: “MISO amount to participate in the MISO market for accreditation of new resources with no operating history. Historic availability data will be used for accreditation when a resource has sufficient operating data.” While AEMA would support the general principle, it is not clear if the “operating history” is on an individual DER basis or if it is based on the aggregated DER. AEMA suggests the treatment be based upon the single, aggregated asset, as opposed to tracking individual DER performance, since aggregations can compose many, many smaller DERs and tracking individual performance is an unnecessary burden to participation.
AEMA would request that MISO provide more clarity on the testing/verification process as well. For example, if a DERA registers a (5) MW DERa to participate in the MISO market as a Type II Demand Response Resource (DRR), does the DERA simply demonstrate (5) MW’s of response through a test like a Type II DRR does today? If that resource cleared in the MISO Planning Resource Auction (PRA) or was utilized in the Fixed Resource Adequacy Plan (FRAP), would that DERa have a “must offer” obligation for the relevant planning year? Would historic availability treatment be the same as a current Type II DRR treatment? If the same aggregation were registered as a Generator, would the accreditation follow the process for a generator (i.e., would the Generator Verification Test (GVTC)) be discounted for EFOR (or the proposed ACAP)?
AEMA notes that Section 69A.3.2 of the MISO tariff presently incorporates Energy Efficiency Resources (“EERs”) as MISO capacity resources, and AEMA encourages MISO to retain such valuable capacity resources. As stated in The Brattle Group’s recent whitepapers, EERs provide significant benefits to an RTO’s capacity markets because EERs: (1) are a cost-effective resource; (2) yield binding capacity market commitments; and (3) improve load forecasts. See, e.g., https://info.aee.net/how-to-optimize-energy-efficiency-benefits-in-wholesale-markets. Order No. 2222 requires that RTOs modify their tariffs to allow all DERs, which expressly include EERs, to participate directly in organized wholesale electric markets. See, 18 C.F.R. § 35.28(g)(12)(i). Accordingly, the RASC should not pursue “Elimination of EE in capacity construct (IMM Recommendation 2019-05, RASC-2021-4),” as discussed in the 5/24/21 RASC Entity Management Plan; instead, MISO should be working to maximize the benefits of EERs in MISO’s capacity market.
AEMA notes that Section 69A.3.2 of the MISO tariff presently incorporates Energy Efficiency Resources (“EERs”) as MISO capacity resources, and AEMA encourages MISO to retain such valuable capacity resources. As stated in The Brattle Group’s recent whitepapers, EERs provide significant benefits to an RTO’s capacity markets because EERs: (1) are a cost-effective resource; (2) yield binding capacity market commitments; and (3) improve load forecasts. See, e.g., How to Optimize Energy Efficiency Benefits in Wholesale Markets (aee.net). Order No. 2222 also requires that RTOs modify their tariffs to allow all DERs, which expressly include EERs, to participate directly in organized wholesale electric markets. See, 18 C.F.R. § 35.28(g)(12)(i). Accordingly, the RASC should not pursue “Elimination of EE in capacity construct (IMM Recommendation 2019-05, RASC-2021-4),” as discussed in the 5/24/21 RASC Entity Management Plan; instead, MISO should be working to maximize the benefits of EERs in MISO’s capacity market.
AEMA appreciates MISO’s consideration of these comments as part of the Order 2222 compliance approach being discussed in the RASC. We welcome any questions, and encourage you to contact either Katherine Hamilton, Executive Director of AEMA, or DeWayne Todd, representative of AEMA, should you wish to discuss with AEMA members.
Respectfully Submitted,
Katherine Hamilton
Executive Director, Advanced Energy Management Alliance
Katherine@aem-alliance.org
202-524-8832
or
DeWayne Todd
DDT LLC
dewaynetodd1297@gmail.com
812-573-8052
Environmental Sector comments to RASC re: O-2222 DER aggregation capacity and accreditation:
Initially we want to thank MISO for continuing its thoughtful approach to O-2222 compliance and reiterate our over-arching comment that MISO should be seeking compliance solutions that maximize flexibility for DER aggregators (DERA) to optimize how they interact with MISO markets and the services they provide to the MISO system and are compensated for. This flexibility should be front-and-center in any proposed compliance solution.
We also want to note that there was virtually no stakeholder discussion on this topic at the July 7th RASC due lengthy discussions regarding other agenda items. Without the opportunity to hear MISO’s explanation of its proposal and engage in stakeholder discussions/Q&A, we do not feel fully informed on MISO’s proposal, and therefore are not fully prepared to respond. After this initial round of feedback, we request dedicated time at a future RASC meeting to better understand what MISO is proposing and how this will likely impact DERAs’ participation in resource adequacy plans and MISO’s capacity market. If appropriate, MISO should also provide space for another round of stakeholder feedback once this more comprehensive conversation is had.
Question 1: How can DER be aggregated in MISO’s capacity construct?
At what level DER aggregations (DERa) are required to aggregate will impact available DERa configurations and their ability to effectively participate in MISO’s capacity construct. Flexibility and transparency of data necessary to make informed choices are critical to facilitate participation. We understand MISO is currently limited to evaluating congestion at the EPNode level but are concerned that MISO’s initial proposal to require aggregations up to the EPNode but mapped to the CPNode does not maximize the flexibility for DERa to provide all services and value they are technically capable of providing. At present, the EPNode level is far less visible to developers and access to information about the EPNode is more difficult to obtain. Commercial nodes are more transparent as a developer knows which utility system it is connected to and there is easy access to the LMP data, etc. to inform DERA decision making. Quite simply, the more a DERA must transact at the EPNode, the more difficult it will be for developers.
Ideally, developers would be able to mix and match DERa configurations to see which make sense to provide the services that DERa is capable of providing and that provide the most attractive value stream for both the MISO system and the developer. Currently this ability is limited as, for instance, the current market platform does not allow aggregation across local balancing authorities. Given these current limitations to MISO’s market platforms, DERA should have some flexibility to provide whatever need they see at the EPNode level. But we also urge MISO to consider changing this dynamic so that aggregators could aggregate across EPNodes. This starts with a greater level of transparency at the EPNode level, but ultimately will require MISO’s market platforms to evolve in ways that allow greater flexibility for a variety of DERa configurations.
Question 2: How should heterogeneous aggregations of DER be accredited for capacity?
There are several considerations that need to inform how heterogenous DERa are accredited for capacity. True to our previous comments, first and foremost should be flexibility for DERA to configure DERa in various ways that will maximize value to the MISO system and incentivize beneficial DERa development. Also, particularly important to the discussion of capacity accreditation and resource adequacy is transparency in methodology and, ultimately, accuracy of resource adequacy accounting.
At least initially, and particularly given the residual nature of MISO’s planning resource auction (PRA), we expect distributed resources and DERa to continue to be more valuable to load serving entities as a load-modifying resource than as a capacity resource to be included in MISO’s PRA. Therefore, we do not expect significant interest in the capacity market in MISO, rather a focus on resource accreditation for resource adequacy purposes. Because resource adequacy is largely within the purview of the states, we encourage MISO to coordinate closely with state regulators on this issue.
Under this current dynamic, however, backflow onto the transmission system of energy generated by DERs or a potential DERa is treated as negative load rather than as a supply resource. It is unclear to us how MISO’s thinking is evolving around this issue. Further clarity on this question will inform our position on MISO’s compliance solutions. At this initial point in the discussion, we support MISO’s approach of treating DERa similar to utility-scale resources (as opposed to treating it similar to, for example, energy efficiency resources) with respect to capacity accreditation. This will maximize the value of DERa and reduce consumer costs for resource adequacy.
We offer several considerations for MISO regarding the establishment of capacity accreditation for heterogeneous DERa as well as new or emerging types of DER more generally:
1) We are concerned that MISO’s proposal to provide autonomy to DERA (that may often be the local utility) is setting initial capacity accreditation for DERa. At times there will be perverse incentives for utilities in the MISO system to under-value the resource adequacy contributions of new DER types or heterogeneous DERa, particularly in state-level IRP proceedings. Therefore, we urge MISO to set resource accreditation values so they can be incorporated into utility IRPs and ensure fair valuation at the state level and accurate valuation for non-utility developers.
2) There will be DERa where data does not exist to provide an accurate assessment of capacity or resource adequacy value. In this case we recommend MISO provide a process for accrediting new DER types or heterogeneous DERa. In doing this:
a) MISO should establish initial capacity accreditation levels that are designed to encourage the development of new DER types or heterogeneous DERa. This should be informed, but not solely decided by DERA. MISO’s initial assumption should be optimal performance of new DER types or heterogeneous DERa to encourage market entry and provision of as much value as DERa can provide.
For example, resources such as controllable thermostats or hot water heaters, or even distributed solar + storage resources should be given accreditations upwards of 100 percent of the DER’s potential under the assumption that they can and will show up during peak periods. This is a similar approach to MISO’s current treatment of utility-scale hybrid resources which grants accreditation up to firm Tx service then adjusts based on operational info. This would work well for DERAs and MISO should consider a similar method for collecting operational history.
b) Similar to MISO’s treatment of utility-scale wind and solar resources, once a threshold amount of new DER types or heterogeneous DERa are participating, MISO should establish a transparent ELCC-type accreditation based on available data to be used until specific operational data is available to determine resource-specific accreditation.
c) If DERA can submit data to support a different initial accreditation value, then that opportunity should be available, but it should be data driven.
3) We encourage MISO to be explicit in that DERa participation in MISO PRA or a Fixed Resource Adequacy Plan (FRAP) should not preclude or present a barrier to participation in other MISO markets, including those for ancillary services. Slide six of the July 7th presentation states that “DERa must be available for the entire Planning Year if cleared in the PRA or acceptable replacement capacity must be procured”.
While we do not necessarily take objection to this requirement, we recommend that MISO not lose sight of DERa opportunities to participate in ancillary services or other markets. O-2222 states that DERa should have the ability to participate in all markets and DERa treatment should be on a level playing field with other resources that can participate in other markets simultaneous with participation as a resource in MISO’s capacity resource auction.
Thank you for the opportunity to provide this input. We look forward to the ongoing discussion.
MISO Environmental Sector