Iowa Should Emphasize Flexibility in Regulating Aggregated Distributed Energy Resources to Safeguard Innovation and Market Integrity
Iowa's regulatory framework for aggregated distributed energy resources (DERs) should prioritize flexibility and avoid overly restrictive rules, according to a recent submission by the R Street Institute. The document, directed to Iowa's regulatory body, addresses the implications of FERC Order 2222, which aims to integrate DERs like rooftop solar, battery storage, and demand response into wholesale electricity markets. The core message emphasizes that Iowa's approach should not stifle innovation or create barriers to entry for DER aggregators, while still safeguarding consumer protections and market integrity.
A key argument is that Iowa should avoid a rigid, one-size-fits-all approach to DER aggregation. While registration of aggregators is advisable, requirements should be carefully considered to prevent undue burdens. Transparency with consumers and robust data reporting are also paramount, with California’s PG&E Electric Rule No. 24 cited as a potential model, though adaptation to Iowa’s unique context is crucial. Encouraging diverse business models, rather than favoring specific ones, is also deemed vital.
FERC Order 2222’s goal was to open wholesale markets to DERs, enabling participation in services like frequency regulation and capacity provision. Iowa, connected to a regional transmission organization, must now establish regulations governing these aggregators. The document acknowledges potential limitations of Order 2222 and warns that overly strict state rules could have unintended consequences. Clear data reporting standards are needed to accurately assess load impact and cost-effectiveness.
Specific recommendations include simplifying registration processes, establishing transparent data reporting standards, prioritizing outcome-focused rules, and avoiding prescriptive business model restrictions. The document cautions against replicating existing models like California’s PG&E Electric Rule No. 24 without careful consideration. It also notes the complexity of the subject matter and the importance of understanding technical jargon and nuances within the arguments.
