Special MIC reviews DER interconnection questions

Stakeholders covered a myriad of related topics at the Nov. 17 special Market Implementation Committee meeting on Distributed Energy Resources, covering both interconnection and markets.

In the first half of the meeting, stakeholders dissected the particulars of today’s interconnection process as it relates to distributed energy resources, Wholesale Market Participation Agreements, and when jurisdiction of the Federal Energy Regulatory Commission applies.

In the second half of the meeting, participants built on that discussion, looking at a preliminary PJM proposal on DER participation in the energy and ancillary services markets, which set forth ideas of new DER rules and how DER resources might participate in these markets.

In the first half, Dave Egan, manager – Interconnection Projects, led stakeholders through terms defined in PJM’s tariff regarding DER interconnection rules and procedures and reviewed their questions about interconnection.

In an extended discussion, stakeholders engaged Egan on the parameters for various agreements – whether PJM’s Interconnection Service Agreement or Wholesale Market Participant Agreement combined with state-level interconnection agreements applied under different scenarios.

PJM Tariff processes and timelines (including Attachment Y) only apply when an interconnection is within the jurisdiction of the FERC or the PJM Tariff. Otherwise, a state-level process must govern the interconnection process.

If the interconnection customer seeks to make wholesale sales, PJM would separately issue a Wholesale Market Participation Agreement, effective upon the first wholesale energy sale.

A distributed energy resource is a generation or electric energy storage resource connected at distribution voltages and/or connected behind a load meter. Currently, about 95 percent of DERs seeking to participate in wholesale markets are under a non-FERC jurisdictional interconnection process with post-interconnection sales governed by a Wholesale Market Participation Agreement.

Stakeholders discussed the extent to which state agreements should coexist with FERC/PJM Tariff agreements.

One idea posed for the group’s further consideration is to have the Wholesale Market Participation Agreement supersede state interconnection agreements upon commercial operation (wholesale energy sales). This updated agreement would then become both a sales and operations agreement, replacing the state interconnection agreement going forward, on the basis that the interconnected distribution line is FERC jurisdictional once wholesale sales begin to flow over the line.

This would require including the same operational requirements in Appendix 2 of the Interconnection Service Agreement in the Wholesale Market Participation Agreement.

Both Egan and Andrew Levitt, senior market strategist – Emerging Markets, made the point that, as the group moves down the road of WMPA reform, making sure the grid remains reliable and safe is paramount.

Egan also reviewed particulars of the point of interconnection and Tariff-defined terms. This included the status quo for connecting to FERC and non-FERC entities, how state versus federal jurisdiction is determined on a distribution circuit and the jurisdictional test for behind-the-meter projects.

If the DER group decides to modify the Wholesale Market Participation Agreement, it will review the proposals with the Planning and Operating committees for consideration.

In the second half of the meeting, Levitt presented the preliminary PJM proposal, which is designed to kindle discussion. He also took stakeholders through the options matrix.

Among the basics of the proposal’s general overview is that there will be a third “framework” of rules for DER. While individual and aggregated DER can participate under the new rules, all DER sites must have interconnection approval from the electric distribution company and come through the PJM queue.

Facilitator Scott Baker also provided a short update on the vote at the Nov. 6 Market Implementation Committee meeting on the group’s charter to become a subcommittee.

Stakeholders overwhelmingly approved the new subcommittee charter, which includes new stakeholder language on new market rules respecting state/local jurisdictional agency standards and protocols and the safety and reliability of the distribution system. This charter will go to the Dec. 7 Markets & Reliability Committee for endorsement.