Commissioner James Danly Statement
October 21, 2022
ER21-2460-002
I concur in today’s latest order[1] on the New York Independent System Operator, Inc.’s (NYISO) attempts to clarify and comply with Order No. 2222.[2] I concur because the Commission does not require NYISO to make fundamental changes to its existing market design or software to “allow [Distributed Energy Resources] in heterogeneous Aggregations to provide all of the ancillary services that they are technically capable of providing through aggregation.”[3] I agree that broad market design revisions—such as changing how all operating reserve products are offered and selected—are unnecessary and inappropriate as an Order No. 2222 compliance exercise.
Today’s order unfortunately is not so unambiguous, but it does confirm that the Commission is not “requir[ing] NYISO to allow a heterogeneous Aggregation to simultaneously make available multiple operating reserve products.”[4] To so require in NYISO apparently would impose the sort of extensive market design and software changes that Order No. 2222 does not mandate or even contemplate.
NYISO still has a compliance filing to make, however.[5] My hope is that the Commission does not change course and force NYISO to rework its markets in the name of allowing a “heterogeneous Aggregation” of Distributed Energy Resources to participate, or to grant “heterogeneous Aggregations” special treatment that is unavailable to all other providers of operating reserves.
This is exactly why I dissented from Order No. 2222 in the first place.[6] The Commission should not be in the business of imposing unnecessary, micro-managing mandates to any utility, including the Regional Transmission Organizations (RTOs), ever. We should be particularly reluctant to do so when the mandate’s effects will be concentrated on the distribution system, since the distribution system is primarily under state jurisdiction. Today’s order is also an example of why I concurred with the order on NYISO’s first attempted compliance to highlight the difficulty RTOs face when attempting to comply with Order No. 2222.[7] A majority of the Commission is so anxious to facilitate the participation of Distributed Energy Resources that it throws to the wind old, out-of-fashion considerations like jurisdiction,[8] low cost,[9] and reliability.[10] But the result still must be just and reasonable rates that ensure reliability, and I strongly doubt any Order No. 2222 “compliance” that requires NYISO or any RTO to revamp fundamental market design elements to accommodate “heterogeneous Aggregations” would be able to pass muster under the FPA.
For these reasons, I respectfully concur.
[1] N.Y. Indep. Sys. Operator, Inc., 181 FERC ¶ 61,054 (2022).
[2] Participation of Distributed Energy Res. Aggregations in Mkts. Operated by Reg’l Transmission Orgs.& Indep. Sys. Operators, Order No. 2222, 172 FERC ¶ 61,247 (2020) (Order No. 2222), order on reh’g, Order No. 2222-A, 174 FERC ¶ 61,197, order on reh’g, Order No. 2222-B, 175 FERC ¶ 61,227 (2021) (Order No. 2222-A).
[3] N.Y. Indep. Sys. Operator, Inc., 179 FERC ¶ 61,198, at P 93 (2022).
[4] N.Y. Indep. Sys. Operator, Inc., 181 FERC ¶ 61,054 at P 14.
[5] See id. P 15.
[6] Order No. 2222, 172 FERC ¶ 61,247 (Danly, Comm’r, dissenting); see also Order No. 2222-A, 174 FERC ¶ 61,197 (Danly, Comm’r, dissenting).
[7] June 2022 Order, 179 FERC ¶ 61,198 (Danly, Comm’r, concurring).
[8] See, e.g., Order No. 2222, 172 FERC ¶ 61,247 (Danly, Comm’r, dissenting at P 3) (“Respect for the States’ role in our federal system and under the [Federal Power Act (FPA)] would counsel against even modest, non-essential declarations of our authority, if done at the States’ expense.”).
[9] See, e.g., NYISO July 18, 2022 Request for Clarification Or, in the Alternative, Rehearing, at 2-3 (“Making the additional software and process improvements necessary to implement an expansive reading of the [Commission’s] requirements . . . would require the NYISO to dedicate significant additional resources and time to develop and implement new functionality” and cautioning that “it is not clear if the investment in this added functionality would provide equivalent benefits to reliability or market efficiency.”).
[10] See, e.g., id. at 2 (“Making the additional software and process improvements necessary to implement an expansive reading of the [Commission’s] requirements” “could compromise reliability by requiring the NYISO’s Real-Time Commitment . . . and Real-Time Dispatch . . . which develop Real-Time Market solutions and issue commitment and dispatch instructions, to solve a host of new constraints in order to incorporate the operation of individual [Distributed Energy Resources] that participate in its markets as components of a larger Aggregation.”) (emphasis added).