PUC Invites Comments On Proposed Regulation On Use Of Distributed Energy Resources And Virtual Power Plants

The Public Utility Commission published notice in the March 30 PA Bulletin inviting comments on an Advanced Notice of Proposed Rulemaking (ANOPR) about the use of Distributed Energy Resources (DERs) as a mechanism to help increase energy efficiency, enhance service, and potentially lower costs. (formal notice)

The Commission voted 5-0 to publish the ANOPR in the Pennsylvania Bulletin, which will begin a 60-day period for comments on topics detailed in the rulemaking proposal. 

“Today marks an important step in the process of allowing flexible, distributed resources to participate in the reliability of the electric system through markets at PJM,” noted PUC Vice Chair Kimberly Barrow in a joint statement with PUC Chairman Stephen M. DeFrank. “Distributed resources provide the possibility for those who were traditionally consumers to play an active role in ensuring electric reliability and resiliency for themselves and their neighbors, and often in a less expensive way than traditional large generation that requires delivery infrastructure.”

The action to seek comments is the next step in a process that began in November 2023 with a joint motion by Chairman Stephen M. DeFrank and Vice Chair Kimberly Barrow to examine PUC regulations and potential regulatory changes related to DERs and examine the upcoming impact of federal rules allowing DER participation in the wholesale energy market, to ensure that Pennsylvania is not left behind.

Distributed Energy Resource Aggregations (DERAs) – also known as “Virtual Power Plants (VPPs)” – can deploy many different types of technologies to boost energy efficiency; using available energy when it is the cheapest, cleanest, and most plentiful.

For example, small rooftop solar systems could inject energy into the power grid, while managed charging by electric vehicles could absorb that electricity when it is plentiful – and at the same time smart thermostats or smart water heaters could shift customer demand to a different time of day, depending on the needs of the grid.

VPPs could also save money for customers in the long-term, helping to maintain an adequate supply of power without requiring the construction and maintenance of new and expensive power transmission and distribution infrastructure.

Following a series of stakeholder meetings held by the PUC’s Law Bureau and Bureau of Technical Utility Services in December 2023 and February 2024, a list of potential topics for comment were developed, including-- 

-- Changes to DER interconnection rules.

-- Changes to metering requirements.

-- Cost allocations for facilities allowing the interconnection of DERs.

-- Adjudication of disputes regarding the registration of DERs.

-- Management of distribution utility overrides of DERs to maintain reliability, and related disputes.

-- Protection of DER owners from unfair trade practices or excessive risk in the wholesale markets.

-- Prevention of double compensation or double counting between retail and wholesale market participation.

-- Any necessary electronic data exchange revisions.

-- Small utility opt-in procedures.

-- Potential PUC oversight of DERAs

-- Cybersecurity considerations.

-- Distribution level benefits.

-- Electric distribution companies acting as DERAs.

-- Billing Issues.

-- Equity Concerns.

Additionally, interested parties submitting comments are being asked to include information about how any similar changes may be implemented in other states.

Documents related to this rulemaking can be found at PUC Docket No.: L-2023-3044115.

[Posted: March 29, 2024]  PA Environment Digest