November 25, 2020

FERC’s Order 2222 and Planning For Its Impact On Utilities

FERC’s order 2222 mandates Regional Transmission Organizations and Independent System Operators (RTO/ISO) to remove barriers to the participation of distributed energy resource (DER) aggregations in wholesale energy markets in the US. The order also represents another signal reinforcing the potential of DER to serve grid-scale needs. In the New York ISO territory, for example, DER and efficiency measures are expected to increase from a ~4% share in total End-Use demand in 2020 to ~23% by 2040 (an increase of over 33,000 GWh). Similar trends are expected throughout the country.

Projection, Components of End-Use demand. 2020 Load & Capacity Data. New York Independent System Operator, 2020.

FERC states that the new rules will promote innovation in the energy industry to help meet growing demand and evolving needs. The value of added flexibility, diversity, and resiliency that DER’s stand to bring to the market requires utilities to quickly and effectively pivot appropriate regulation, programs and frameworks; and coordinate across stakeholders and operations.

Changes championed at the federal level such as the new FERC order, amid major shifts in American politics, could be the first of many regulatory changes that utilities throughout the country will be facing over the next decade. Staying competitive and ahead of market shifts in the power landscape will have positive impacts on a utility’s customer base and revenue. Key factors will include staying in tune with ratepayers, market conditions, energy demands, and the new technologies and market participants.

Image of GridMarket platform in the San Francisco, CA Area, assessing DER projects with a total generation capacity in excess of 1.4 GW, resulting from a machine-learning-assisted assessment of over 150,000+ properties.

With utilities able to manage and oversee interconnection of distributed assets brought online to serve grid-scale needs, we anticipate that there will be an influx of interconnection applications as distributed assets are developed and aggregators look to capitalize on effectively more cost-effective project alternatives. Increased DER generation can be very valuable, but grid operators will need to be prepared to respond accordingly as interconnection queues expand and demand profiles shift across targeted regions of service territories. Utilities are ideally positioned to set themselves up for success through informed preparation, by anticipating and embracing DER adoption; proactively managing DER integration into their networks.

In 2012, GridMarket was part of New York’s response to Superstorm Sandy. We led a task force that helped Con Edison manage increased interest in distributed energy solutions from energy consumers throughout the Greater New York City region. Our experience coordinating resources and working closely with the local utility provided us invaluable experience that we used to create our current data-driven DER project platform.

GridMarket is eager to offer support and a solution for utilities that are struggling to plan for the impending market shifts. Our platform’s capabilities include a number of dynamic planning and forecasting capabilities to help utilities better understand the landscape for behind-the-meter DER penetration across a territory.

To learn more about the GridMarket Platform and how it can help you prepare for Order 2222, other regulatory changes, and your unique grid needs, please reach out to Peter Schneider at or visit GridMarket’s Utility Resource Page.

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FERC’s Order 2222 and Planning For Its Impact On Utilities

FERC’s Order 2222 and Planning For Its Impact On Utilities

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