Many local governments have set ambitious clean energy and climate goals. Distributed energy resources (DERs) – small-scale resources typically located on the distribution system, such as electric vehicles, energy storage, demand response, generators and more – will be a crucial part of meeting these goals. In 2020, the Federal Energy Regulatory Commission (FERC) issued Order No. 2222, which requires regional transmission organizations (RTOs) and independent system operators (ISOs) to open their markets to DER aggregations.

While FERC and regional grid operators are currently in the process of finalizing region-specific market rules to comply with the order (which will determine the extent of the market opportunities for DERs), this development can remove barriers to DER participation in wholesale electricity markets and accentuate the benefits of DERs for local governments – ultimately allowing them to increase revenue and bring more clean power to their residents.