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FERC Approves Aggregated DER in CAISO’s Energy and Ancillary Markets

On June 2, FERC conditionally approved tariff revisions to facilitate and govern the participation of aggregated distributed energy resources (DERs) in CAISO’s energy and ancillary services markets.

Key Details

  • The tariff establishes a framework for the aggregation of DERs, thereby allowing the resources to meet the 0.5 MW requirement to participate in CAISO’s wholesale markets
  • DERs are defined as any resource connected to the distribution system, regardless of size or whether it is connected behind or in front of the end-use customer meter
    • Examples of DERs include generation such as rooftop solar, energy storage, plug-in electric vehicles, and demand response
  • The tariff allows a new market participant, called the DER provider (DERP), to aggregate individual DERs in order to meet CAISO minimum size requirement
  • DERP aggregations within a single pricing node may be heterogeneous (e.g., mixture of sub-resources) and are not restricted in maximum capacity
  • DERP aggregations spanning multiple pricing nodes must be homogenous (e.g., same sub-resources) and are restricted to 20 MW in capacity in order to allow CAISO to gain operational experience and assess the impact of DERP aggregations on congestion
  • To avoid double counting, individual resources involved with a DERP are not permitted to engage in alternative wholesale market frameworks (e.g., independent generation or demand response)
  • FERC’s approval is conditional on CAISO reporting implementation efforts in six months and conducting annual market performance reviews for the next three years


California continues to expand wholesale market opportunities for DERs. While several markets—including CAISO—allow the aggregation of DERs, CAISO goes a step further by allowing aggregated DERs to participate in energy and ancillary markets.

More Information

Power Markets Today: FERC Lets DER Aggregate into Cal-ISO Markets

Utility Dive: FERC Greenlights CAISO’s Push to Integrate DERs into Markets

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Contributing Authors

Paul Quinlan Clean Tech Manager

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