NAESB rolls out draft standardized distribution services contract | Utility Dive

Nov 05, 2024

The contract will allow for “seamless participation” of distributed energy resource aggregators in wholesale markets, consistent with FERC Order 2222, the energy standards board said.

The North American Energy Standards Board will take comment until Oct. 7 on a draft standard contract covering transactions between utilities and distributed energy resource aggregators.

The contract, developed at the request of the U.S. Department of Energy, “will increase efficiency and consistency in transactions between utilities and [DER] aggregators in the procurement of distribution services,” the group said in a statement. The contract “establishes boilerplate terms and conditions that will minimize uncertainties in contracting terms and help reduce costs associated with counterparty negotiations.”

The lack of a standard contract specifying services and performance expectations “has been a significant market barrier inhibiting the acquisition of distribution services from DER aggregations,” NAESB said. The new contract aims to “encourage greater operational and market coordination across distribution and wholesale interactions.”

NAESB is an industry forum that has previously developed model contracts for both the gas and the electric sectors. The draft distribution services contract was developed with input from DER aggregators, electric utilities and grid operators, the group said.

The Federal Energy Regulatory Commission issued Order 2222 in 2020, directing grid operators to enable DER aggregations to participate in wholesale markets. A Guidehouse Insights analysis, however, concluded implementation of the order has so-far been “mixed.”

Terms of the draft contract include provisions to support information sharing between contracting parties “that could enable more seamless participation for DER aggregators seeking to participate in wholesale markets consistent with FERC Order No. 2222 requirements,” NAESB said.