Late last week, the Federal Energy Regulatory Commission granted the NYISO’s mid-November extension request to move the implementation date of certain tariff revisions that will allow distributed energy resources (“DERs”) and DER Aggregations to fully participate in the NYISO’s markets from Q4 2022 to December 31, 2026. The NYISO’s Order 2222 compliance saga has been an ongoing series of NYISO filings and corresponding FERC orders, resulting in the bifurcation and staggered implementation of the NYISO’s proposed market design.
The NYISO’s initial market design changes, which will facilitate the participation of DERs and DER aggregations in the NYISO’s wholesale markets, will be implemented in 2023. These tariff changes include: (i) establishment of eligibility criteria for DERs and DER Aggregations to participate in the wholesale market;s (ii) rules for participation in the installed capacity market; (iii) interconnection requirements; and (iv) rules for dual participation in the wholesale and retail markets.
The NYISO’s second set of market changes, which will involve granular and complex changes to the NYISO’s software to better automate, track, and audit DERs and DER Aggregation participation, will be implemented no later than December 31, 2026. According to the NYISO, it now estimates that these software changes will take several years to complete, but it does not want to delay the ability of DERs and DER Aggregations to participate in the markets while these issues are being resolved.
In practice, this staggered approach is anticipated to play out as follows:
- 2023: DERs and DER Aggregations will be able to begin participating in the NYISO’s Energy, Ancillary Services, and Capacity markets
- 2024: The NYISO will implement several software features that will help automate DERs and DER Aggregation participation
- 2026: The balance of the software updates will be implemented and the NYISO will be in full compliance with Order 2222
Though this is a significant delay from what the NYISO originally intended, other RTOs and ISOs are on similar Order 2222 implementation timelines. For example, PJM has proposed a February 2026 implementation date, and ISO-NE a November 1, 2026 implementation date. Further, the clarification that DERs and DER Aggregations will be able to begin participating in the NYISO’s markets by 2023 will help guide business decisions for developers and will (hopefully) incent DER development by removing some market uncertainty.