When DERs participate in wholesale electricity markets state and local authority is not trampled

Earlier this month a group of 22 US Senators co-authored a Letter saying the Federal Energy Regulatory Commission should preserve the ability of local electricity providers to maintain control over the electricity grid. At issue is whether Distributed Energy Resources, a.k.a. DER’s, can sell electricity to the wholesale electricity market. FERC is considering a proposal which the Senators describe as allowing “third-parties to aggregate distributed energy resources (DER), such as solar and battery panels, and sell electricity on the wholesale market.”

Sen. John Hoeven (R-ND) said: “While allowing DERs into the wholesale market can encourage innovation, the aggregation of these resources should be determined at the local and state level to ensure that there is no adverse impact on reliability, or higher costs for consumers. The Federal Power Act established important precedent in ensuring that local distribution utilities, like rural electric cooperatives, have jurisdiction of the wholesale market. This local control helps to better ensure that consumers have access to safe, reliable and affordable energy.”

While it sounds like these Senators are in favor of clean renewable energy, on a close read their statement clearly supports the local utility companies continuing to sell dirty fossil-fuel derived electricity.

The statement issued by the Senators (John Barrasso, Roy Blunt, John Boozman, Shelley Moore Capito, Bill Cassidy, Kevin Cramer, Mike Crapo, Steve Daines, Mike Enzi, Joni Ernst, Deb Fischer, Chuck Grassley, Cindy Hyde-Smith, James Inhofe, James Lankford, Lisa Murkowski, Jim Risch, Mike Rounds, John Thune, Thom Tillis, and Roger Wicker) repeatedly discuss local rural energy cooperatives. The point made is that supposedly DER’s interfere with the ability of a rural electric cooperative to provide safe reliable electricity service.

Open the door to the Tesla Destination Charger network using these Tesla-J1772 adapters

Sponsored

I urge these people to watch a movie, From Paris to Pittsburgh, that includes a strong testimony from a rural electricity cooperative in Iowa that is eagerly installing as much solar electricity systems as it can. The movie shows many projects from around the USA, including Puerto Rico, to use large scale solar and wind energy systems. In Iowa, there is a Rural Electricity Cooperative that is eagerly installing solar, and the movie interviews many Iowans who are eagerly seeking jobs installing and maintaining Wind Turbines.

Utility Dive posted a response co-written by Ted Thomas, Chairman of the Arkansas Public Service Commission, and Jeff Dennis, Managing Director and General Counsel at national business group Advanced Energy Economy.

Among the citations of various FERC rulings, and ongoing FERC proceedings, the two make a good case for why DER’s must be integrated properly into the wholesale electricity grid. Among the reasons is that DER’s will act to stabilize the grid, not destabilize it.

Why do I say this? A grid scale electricity storage system can come online within seconds to provide energy required to stabilize the grid in case of a momentary power spike. No other kind of energy source can come online that quickly. Therefore renewable energy (solar or wind) plus grid scale energy storage systems can make the grid even more reliable than it already is.

Electricity utility companies should be embracing this combination. Their primary charter is ensuring the grid is absolutely reliable. DER’s can do this far better than any fossil fuel driven power plant. And the cost for DER systems is falling rapidly. Oh, and there’s this other benefit, that DER systems are excellent for the environment.

The response letter says:

Integrating DERs in wholesale markets doesn’t just provide the customer a potential revenue stream, it provides wholesale grid operators a new set of distributed assets to ensure reliability and resilience against natural and man-made threats to the existing grid. It also improves competition in wholesale markets, ensuring just and reasonable rates for all customers.

Ted Thomas and Jeff Dennis

They go on to note that the letter from the 22 Senators echo concerns raised by the National Rural Electric Cooperative Association (NRECA). Those concerns are described as “misplaced and, in the case of NRECA, self-serving”.

They do not explain why it is self-serving but we get a little clue by looking at who those Senators are. Sen. Hoeven represents a fossil fuel producing state (North Dakota) and the list includes other Senators from other fossil fuel producing states. The most recognizable is Sen. Inhofe, the infamous climate change denier and protector of fossil fuel companies.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

About David Herron

David Herron is a writer and software engineer living in Silicon Valley. He primarily writes about electric vehicles, clean energy systems, climate change, peak oil and related issues. When not writing he indulges in software projects and is sometimes employed as a software engineer. David has written for sites like PlugInCars and TorqueNews, and worked for companies like Sun Microsystems and Yahoo.

Leave a Reply