Google Cites Requirement For Aggregated Load To Participate In ERCOT Market Through Same QSE (REP) As "Biggest" Limitation Facing DERs -- EnergyChoiceMatters.com

Google Cites Requirement For Aggregated Load To Participate In ERCOT Market Through Same QSE (REP) As "Biggest" Limitation Facing DERs

Third-Party DR Aggregators Press For Elimination Of REP Requirement

June 15, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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In comments on a Texas PUC project addressing distributed energy resources, Google LLC called the requirement for load's participation in the ERCOT market to be conducted under the same QSE as the load's LSE (essentially requiring aggregation of load to occur through a REP), "[t]he biggest limitation to widespread participation of DERs in the ERCOT wholesale market."

Google cited as a barrier to DERs the fact that, "Customers with DERs are only eligible to participate as an ERCOT resource through their REP."

"The biggest limitation to widespread participation of DERs in the ERCOT wholesale market is that direct participation by third-party DR Qualified Scheduling Entities (QSEs), and therefore third-party demand response providers, is prohibited," Google said

"Instead, the Load Resources (LRs) consisting of participating customers and their DERs are only allowed to participate through the QSE representing that customer's LSE. This positions LSEs as the gatekeepers to customer participation in non-Emergency Response Service (ERS) demand response. In addition, this reduces customer choice and competition, and, as parties have noted in other comments, the incentives for REPs to stand up their own DR programs has not yielded full participation by every customer with a DER," Google said

"Given that ... existing [DR} programs are estimated to have only enrolled 10% of eligible customers, we believe it is prudent to examine changes to the market rules that will make these market-integrated products more accessible to customers. This examination should include whether resources composed of customers with DERs should continue to be treated as load resources that must bid to buy energy, which has necessitated the relationship between the Load Resource and the LSE," Google said

Google further said that, "Aggregators of DERs and their customers should be compensated at levels reflecting the actual value of the grid services," with Google citing the, "staggering economic cost associated with grid failures."

In separate comments, the ERCOT Innovation Caucus likewise said, "The Commission should explicitly allow third parties to create and operate aggregations of customers in the wholesale market."

The ERCOT Innovation Caucus said that the PUC should, "direct ERCOT to remove the requirement that aggregations be of customers with the same retail electric provider."

"If the Commission desires to maintain the LMP-G policies that have been previously determined (but never implemented), the Customer could provide the retail cost during the registration process," the ERCOT Innovation Caucus said

The ERCOT Innovation Caucus includes David Energy, Lancium, Leapfrog Power, Inc., OhmConnect Texas, and Tesla

In its own separate comments, Leapfrog Power, Inc. said, "The commission should direct ERCOT to remove the requirement for aggregated Load Resources to be aggregated and managed by the same QSE that schedules the customers' load and expressly allow for third parties to aggregate load and participate within ERCOT's wholesale market."

In separate comments, the Texas Advanced Energy Business Alliance said that the PUC should, "Expand the participation of third-party aggregators - not just REPs -- in the ERCOT market."

"[U]nregistered distributed generation (mostly rooftop solar smaller than 1 MW) do not currently receive compensation in ERCOT. ERCOT needs to focus payments on smaller DERs with resilience capabilities such as rooftop solar PV combined with energy storage (either stationary or mobile). Retail electricity providers as well as third party providers should be able to bid to participate and receive these payments on behalf of their customers," the Texas Advanced Energy Business Alliance said

Project 51603

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