Commissioner Christie’s Dissent to Order on ISO-NE’s Order No. 2222 Compliance Filing in ER22-983

Docket Nos.  ER22-983-000, ER22-983-001

I dissent because, among other reasons, the order does not accept as filed ISO- NE’s entirely reasonable and commendable efforts to ensure that measurement and verification (“M & V”) procedures are as accurate as possible so as to prevent foreseeable errors such as double counting.  This issue is further discussed in much more detail in this statement.[1]  It is frankly mystifying why the order would suggest that we might reject ISO-NE’s efforts to be accurate in trying to prevent overpayments to resources, overpayments that will come right out of consumers’ pockets.  We should be encouraging RTOs to adopt rigorous M & V measures, not undercutting them when they try to do so.  

In a more general sense, I just note what I have said before:  Had I been on the Commission when Order No. 2222 was issued, I would have voted against it.[2] 

The problems and complexities of complying with Order No. 2222 are extreme.  This is no surprise to anyone who has studied Order Nos. 2222 and its progeny.  But if the Commission were ever in doubt, the extreme difficulty of putting the world created by Order No. 2222 into practice was proven when four of the nation’s six RTOs — including ISO-NE — requested extensions to make their compliance filings.[3]  As I noted in my concurrence to the letter order in which the Commission granted ISO-NE’s extension request:

[T]he motion filed by ISO-NE illustrates the daunting complexities and certain increased costs to consumers, which I referenced in my dissent to Order No. 2222-A and which apply equally to its forebear, Order No. 2222.  The problems and complexities of compliance described in ISO-NE’s Motion are further evidence that implementing Order Nos. 2222 and 2222- A will be far more complicated, far more costly to consumers and far more burdensome to states, public and municipal power authorities, and electric co-operatives, than these orders and many of their supporters acknowledge.[4]

That the costs associated with Order No. 2222 compliance will be enormous and paid by the consumer is something that cannot be denied.  Equally obvious to me, is that these costs will be driven by the very complexities of the resulting grid upgrades required by this Commission in that order:

[T]he majority also sides against the consumers who for years to come will almost surely pay billions of dollars for grid expenditures likely to be rate-based in the name of “Order 2222 compliance.” . . . A rapid concentration of behind-the-meter aggregated DERs at various locations on the local grid will inevitably require costly upgrades to a distribution grid that has largely been engineered to deliver power from the substation to end-user retail customers.  Meeting the technological challenges of this re-engineering of the local grid are not insuperable but there are substantial costs and we all know these costs will ultimately be imposed on retail consumers.[5]

ISO-NE itself raised a red flag to such daunting complexities in its Extension Motion to submit the very compliance filing before the Commission today.  And it is exactly one of the complexities it flagged that is now being summarily returned to the ISO for more information by the majority.

Specifically, one of the reasons ISO-NE offered for needing more time to make its compliance filing was that “[i]n stakeholder discussions to date, a number of specific metering-related challenges have arisen, particularly associated with metering and reporting for DER aggregations that include behind-the-meter components.”[6]  Among these issues was the potential for double counting and related metering and measurement issues.  To its credit, the NEPOOL Markets Committee referred those issues to its Meter Reader Working Group.[7] 

Today’s order declines to accept ISO-NE’s proposal as it relates to the measurement at the retail delivery point (RDP) of behind-the-meter injection/withdrawal services on the grounds that “ISO-NE has failed to demonstrate that its proposed metering and telemetry requirements for DERAs comprised of behind-the-meter DERs are just and reasonable and do not pose an unnecessary and undue barrier to individual DERs joining a DERA.”[8] 

The majority reaches its conclusion despite the fact ISO-NE stated that, with regard to DERs providing injection/withdrawal services, its metering proposal is based on numerous considerations,[9] including: 

1. Order No. 2222 provides RTOs/ISOs flexibility concerning metering and telemetry requirements.[10]
2. The Demand Response Resources (DRR) model is an existing Commission-approved model related to Order No. 745[11] and the Demand Response Distributed Energy Resource Aggregation (DRDERA) model “leverages the existing DRR model platform to ensure that demand response DERs are treated in accordance with Order Nos. 719 and 745.”[12]
3. DRDERA metering for energy injection and/or withdrawal service will be provided to the ISO for the aggregation while a DRDERA’s metering for demand reduction service will be at the individual DER, consistent with current metering requirements for DRRs.  This DER-specific method is consistent with the ISO’s treatment of individual Demand Response Assets (DRA) that make up a DRR, and “is necessary as demand reduction and energy injection produced when a DRDERA is dispatched are measured for each DER.”[13]
4. The Commission stated a “clear preference” that RTO/ISO compliance proposals should rely on retail metering currently in place for DERs to the extent possible to avoid or reduce unnecessary costs, and that metering requirements should address double compensation concerns.[14]
5. The responsibility for metering resources and loads that settle through the Energy Market in New England rests with the PTOs.[15]  The Host Utility or its Assigned Meter Reader have various responsibilities related to the reporting of revenue quality metering data which is required accurately to settle the wholesale market.[16]
6. At present, the majority of retail metering in New England is located at the RDP, not at a sub-meter location.  In fact, “[m]any states prohibit sub-metering . . . unless explicitly authorized by the retail regulator.  Mandating sub-metering would be at odds with state regulatory constructs and could potentially lead to increased costs for retail customers.”[17]
7. Nevertheless, ISO-NE incorporated flexibility into its Order No. 2222 compliance proposal by permitting “sub-metering of individual DERs where the Assigned Meter Reader is capable of reconstituting the load at the RDP, or parallel metering, so that the metered DER does not impact the reported load at the RDP.”[18]  In that case, ISO-NE made clear that the DER’s meter data must be reported such that its output or load does not impact the reported load for the RDP to be sure retail metering is relied on to the extent possible and that the energy metered is being received by the wholesale markets.[19]
8. The ISO made clear that “[t]his approach narrowly addresses double-counting concerns and ensures the integrity of wholesale markets.”[20]  ISO-NE adds detail:  “if the production of a behind-the-meter generator were directly sub-metered, the same production would also reduce the load as measured at the RDP meter.  Paying the behind-the-meter generator based on its directly sub-metered production while also billing the customer based on its lower RDP meter reading would result in the double counting of services, a result that the Commission ordered RTOs/ISOs to prevent.”[21]
9. ISO-NE’s proposal considered the Commission’s preference for the use of current retail metering constructs and its recognition that there will be variance in Order No. 2222 compliance proposals among the RTOs.  ISO-NE’s proposal specifically considered (a) sub-metering, (b) reconstitution, (c) parallel metering, (d) that the majority of metering in its footprint does not use sub-metering, and (e) that advanced metering infrastructure has not been widely deployed in New England, although various efforts are underway in the states that may permit more extensive metering in the future.[22]

With the backdrop of this high-level summary, how is it that ISO-NE need demonstrate further that its compliance proposal is just and reasonable when, for example, the ISO based its proposal on:  the current structure of ISO-NE’s own Commission-approved rules and rules of the various member-states; retail metering currently in place in order to avoid or reduce unnecessary costs (ultimately to consumers); avoiding double counting (which again avoids costs to consumers); and ensuring the integrity of the wholesale market?  And, it is worth noting that all of these bases were approved considerations by Order No. 2222.  Under any analysis, these factors demonstrate that the ISO’s proposal in this regard is just and reasonable. 

I also disagree with the order’s directive that requires ISO-NE to provide additional detail on whether the ISO’s proposal poses “an unnecessary and undue barrier to individual DERs joining an aggregation.”[23]  ISO-NE already has adequately addressed this issue.  First, “unnecessary and undue” in my view involves a balancing of any potential barrier against any costs or benefits to consumers and the grid.  Examples of the costs and benefits include the bases set forth above which, in my view, set a pretty substantial bar.  Moreover, the proposal summary demonstrates that ISO-NE considered and offered alternatives — many of which may happen to be currently unavailable in much of New England.  As today’s order itself also points out, another alternative offered by the ISO — parallel metering — was rejected by protestors as cost prohibitive.[24]

While the majority’s request for additional information appears odd against this backdrop, the remainder of the order may make the reasoning clearer:  rather than an explanation from ISO-NE, it appears that the majority hopes the ISO will return with a completely different proposal on metering.

Specifically, after setting forth the majority’s view that ISO’s proposal requires an explanatory filing, today’s order twice makes reference to what other RTOs have proposed[25] and then ultimately suggests to ISO-NE: 

Notwithstanding these findings, we note that, in ISO-NE’s discussion of the steps contemplated to avoid imposing unnecessarily burdensome costs on DER Aggregators and individual resources in DERAs that may create an undue barrier to their participation in the ISO-NE markets, ISO-NE may consider alternatives to solely relying on meter data obtained through compliance with distribution utility or local regulatory authority metering system requirements and/or existing telemetry infrastructure.[26]

After all of the effort and expense invested by ISO-NE and all of the various state entities and market participants, to require even more detail on the compliance proposal when the record makes clear to me that the proposal has met the requirements imposed by Order No. 2222 is not something I can support.

For these reasons, I respectfully dissent.