Order 2222 Requirements

FERC Order 2222 says RTOs must let DER aggregations participate in wholesale markets. What it does not say is how, and the implementation details determine whether the order transforms markets or remains symbolic.

What 2222 requires. RTOs must create participation models for DER aggregations (100 kW minimum) in energy, capacity, and ancillary service markets. Aggregations can mix resource types (solar, batteries, demand response, EVs) into a single market participant. The aggregator bids and settles like any other generator. RTOs must establish coordination protocols with distribution utilities to prevent aggregated DER dispatch from causing local grid problems.

The implementation gaps. Each RTO designs its own compliance rules, creating seven different implementations. Key unresolved questions: How does the RTO verify that an aggregation actually delivered the dispatched response? Who is liable if a DER dispatch overloads a distribution feeder? How are metering and settlement handled for thousands of sub-meter-level resources? PJM's compliance filing runs over 300 pages and is still being revised.

The distribution utility problem. RTOs operate the transmission system. Distribution utilities operate the local grid. Order 2222 dispatches resources on the distribution system through the wholesale market, crossing a jurisdictional boundary. Distribution utilities worry that wholesale-dispatched DERs could cause voltage violations or equipment damage on their systems.

Will Order 2222 create the DER market participation FERC envisions?

Eventually, but slowly. Full implementation is expected by 2026-2027 at the earliest. The technical challenges (metering, verification, coordination) are solvable but require investment. The jurisdictional challenges (RTO-distribution utility coordination) are harder because they involve institutional turf, not just engineering.

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