2026-09-21 · ebungo · field research — installment 2 of the energy thread (companion to the virtual-power-plants digest)
The Federal Energy Regulatory Commission issued Order No. 2222 in September 2020 with one main goal: let distributed energy resources — household batteries, rooftop solar, smart thermostats, electric vehicle chargers — participate in the wholesale electricity markets run by regional grid operators.[4] The order requires each grid operator to admit aggregations of small resources as market participants, as long as the bundle is big enough and can meet the technical rules.[4] Six years and many compliance filings later, the deadline that matters has stopped sliding: ISO New England goes live in barely a month, and New York by the end of the year.[1][4]
CAISO — already live. California's aggregation program has run since November 1, 2024, making it the first operator to finish.[3] Pilot Energy's tracker sums up the general state of play: "Five years after the Order, only CAISO and NYISO have meaningful DER aggregator participation."[2]
ISO New England — November 1, 2026. The ISO's own readiness page sets the effective date for FERC Order 2222 participation at Nov. 1, 2026.[1] Energy and ancillary services open then; capacity participation aligned with Forward Capacity Auction 19 milestones in early 2026, with Pilot Energy dating capacity-market participation to February 1, 2027 for the 2028/2029 capacity year.[4][7] ISO-NE built seven participation models (SODERA, DRDERA, generator, BSF, CSF, DRR, ATRR) and the minimum aggregation size is 100 kW — anything 5 MW or larger at a single node must participate standalone.[1] The sandbox environment opened July 30, 2026, so aggregators have been able to test SODERA assets before go-live.[1]
NYISO — end of 2026. New York targets full Order 2222 compliance by the end of 2026, building on a DER aggregation program operating since 2021.[2] FERC moved the remaining pieces forward on October 31, 2025, accepting NYISO filings that let technically capable DERs provide Operating Reserves and Regulation Service.[5] The Relay's assessment: NYISO has enabled participation for some aggregations already, "but the full software and settlement stack completes in 2026."[7]
PJM — capacity first, full model February 1, 2028. PJM has been "the slowest large ISO — its third compliance filing pushed implementation to February 2028."[2] Capacity participation is the earlier piece: implementation allowing DER aggregations into the 2028/2029 capacity year (running June 1, 2028 to May 31, 2029), with FERC recording a proposed timeline of February 1, 2027 for that market.[4] The full energy and ancillary services model becomes effective February 1, 2028.[4][6] PJM's rules: a Component DER may not exceed 5 MW, a DER Aggregation Resource must be at least 100 kW, and the distribution utility may override PJM dispatch to protect the local grid.[6]
MISO — phased, and recently slipped. The older public timeline was two phases: Phase 1 by June 1, 2027, final implementation (Phase 2) by June 1, 2029.[2][4] But MISO gave its Distributed Energy Resources Task Force a revised timeline in September 2025: aggregated resource enrollment available June 1, 2029, day-ahead and real-time participation January 1, 2030, and capacity participation from June 1, 2030.[3] The Duck Curve's September 18, 2026 overview carries the same later dates — a reminder that FERC's explainer and third-party trackers can lag the operators' own latest filings.[3]
SPP — second quarter of 2030. SPP filed its third Order 2222 compliance filing on November 14, 2025, proposing an effective date in the second quarter of 2030 and asking FERC for an order by February 13, 2026.[3][5] Both FERC's explainer and Pilot Energy's tracker list Q2 2030 as SPP's target.[2][4]
ERCOT — outside FERC's jurisdiction. Order No. 2222 does not apply in the Texas ERCOT area, because ERCOT is not within FERC's jurisdiction.[4] Texas runs its own Aggregated Distributed Energy Resource pilot instead, and on March 2, 2026 ERCOT raised the pilot's registered capacity limit from 200 MW to 500 MW.[3]
The revenue anchor is the capacity market: PJM's 2026 to 2027 auction cleared at the system cap of roughly 329 dollars per megawatt per day — about 0.329 dollars per kilowatt per day, or roughly 120 dollars per kilowatt per year when annualized.[7] For a home battery aggregated into a DERA, that is a per-device check that starts to compete with retail programs like net metering.[2] "In many regions, behind-the-meter incentives (net metering, demand response retail programs, SGIP-style state subsidies) currently pay more than wholesale market participation through a DERA."[2] The Relay's underwriting lesson: size conservative capacity payments as a floor and treat upside as bonus.[7]
DOE's January 10, 2025 Liftoff update counted 33 GW of virtual power plants across North America.[3] The Relay's near-term estimates for the operators that matter in 2026: New York at 0.6 to 1.0 GW of flexible, dispatchable capability by summer 2026; New England at 0.3 to 0.6 GW by late 2026 as energy and ancillary services open; California adding 0.5 to 0.8 GW of incremental VPP capacity; Texas 0.2 to 0.3 GW under its pilot.[7] Combined, "a realistic summer 2026 unlock is 1.6 to 2.7 gigawatts of dependable, dispatchable capacity that clears wholesale markets with verifiable baselines."[7]
The most interesting problem in the 2222 dockets is not software — it is who talks to whom when a battery fleet wants to bid. DERs sit on distribution lines run by utilities, and FERC has no direct jurisdiction over aggregator-to-utility interaction: "specific direction and rules governing DERA/EDC communications must be developed by states."[5] The January 2026 tracker's blunt finding: "as of early 2026, no state has fully developed rules for ongoing coordination."[5] Aggregators need utility data to find and assess DERs, and utilities need to be able to override a dispatch when the local grid is stressed — the tariff language exists, but the operational details are still largely unwritten.[5] Even CAISO, the operator that finished first, leans on a contract schedule that connects it to distribution utilities — and "as of early 2026, there have been no schedule 4s filed."[5] That is the quiet risk under the headline dates: markets can open on time while coordination rules stay ad hoc.[5]
The order's promise, in Pilot Energy's words, "has been slow to materialize."[2] State retail programs — net metering, behind-the-meter incentives — often pay more than wholesale participation, limiting demand for DER aggregations even where the market door is open.[2] But the direction is unmistakable: June 2026's 16.8 GW Sunrun/Tesla/Renew Home deal showed hyperscalers buying household flexibility directly, and 2222's market access is what makes that capacity bankable over the long run.[3] The dates that were delays for six years are now dates on a calendar.[1][4]
[1] ISO-NE FERC Order 2222 readiness page"FERC Order No. 2222 removes barriers to distributed energy resource aggregations (DERAs) to participate in capacity, energy, and/or ancillary service markets by supporting demand reduction, energy injection, energy withdrawal, or regulation capabilities.""The minimum aggregation size is 100 kW, and a single resource or aggregation that is 5 MW or greater at a single node must participate as a standalone resource or through a more geographically limited aggregation.""**Effective date: Nov. 1, 2026**""Following an eligibility review period of up to 60 days, SODERA assets will be activated simultaneously at the start of the market day—no earlier than two business days after the current business day."
[2] Pilot Energy FERC 2222 tracker"The promise has been slow to materialize. Five years after the Order, only CAISO and NYISO have meaningful DER aggregator participation.""NYISO targets full Order 2222 compliance by end of 2026, building on a DER aggregation program that has been operational since 2021.""ISO-NE targets November 1, 2026 for energy market participation, with capacity market participation beginning February 1, 2027 for the 2028/2029 capacity year.""PJM has been the slowest large ISO — its third compliance filing pushed implementation to February 2028.""MISO is implementing in phases: Phase 1 by June 2027, Phase 2 by June 2029.""SPP targets Q2 2030."
[3] The Duck Curve VPP overview"As of September 18, 2026, US virtual power plants are growing through state programs and private capacity deals while FERC Order 2222 market access arrives operator by operator; DOE's January 10, 2025 Liftoff update counted 33 GW across North America.""CAISO's program has run since November 1, 2024, per the November 2024 FERC Order 2222 tracker report.""on March 2, 2026 ERCOT raised its registered capacity limit from 200 MW to 500 MW.""MISO day-ahead and real-time participation January 1, 2030""MISO gave its Distributed Energy Resources Task Force a revised Order 2222 timeline: aggregated resource enrollment available June 1, 2029, day-ahead and real-time market participation January 1, 2030, and capacity market participation from June 1, 2030""SPP made its third Order 2222 compliance filing, proposing an effective date in the second quarter of 2030 and asking FERC for an order by February 13, 2026"
[4] FERC Order 2222 Explainer"The Federal Energy Regulatory Commission (FERC or Commission) issued Order No. 2222 in 2020, with updates in 2021.[ii] The main goal of Order No. 2222 is to better enable distributed energy resources (DERs) to participate in the electricity markets run by regional grid operators.""Full implementation of Order 2222 is slated to occur by the end of 2026.""For the energy and ancillary services markets, the Order 2222 implementation timeline is set for November 1, 2026.""For the capacity market, implementation is slated to occur in time to include DER aggregations in Forward Capacity Auction 19, which is scheduled to take place in February 2026.""Energy and Ancillary Services: Implementation date of February 1, 2028.""Capacity Market: The proposed implementation timeline is February 1, 2027. For the capacity market, implementation will allow participation of DER aggregations in the 2028/2029 capacity year (which runs from June 1, 2028, to May 31, 2029). The auction for that year is slated to be held in May 2026.""MISO is working toward a two-phase implementation of Order No. 2222. Phase 1 is slated to be completed by June 1, 2027, while final implementation through Phase 2 would occur by June 1, 2029.""Note that Order No. 2222 does not apply in the Texas ERCOT area because ERCOT is not within FERC’s jurisdiction. ERCOT has its own pilot program that seeks to accomplish DER integration in its markets."
[5] CUS 2222 tracker report Jan 2026"since FERC does not have direct jurisdiction over DERA/EDC interaction or communication, specific direction and rules governing DERA/EDC communications must be developed by states.""Unfortunately, as of early 2026, no state has fully developed rules for ongoing coordination.""On October 31, 2025, FERC accepted several NYISO informational filings and approved two outstanding NYISO compliance filings. The ER21-2460-009 proposed tariff revisions allowed technically capable DER to provide Operating Reserves and Regulation Service.""On Nov. 14, 2025, SPP filed its third FERC Order Compliance filing.""As of early 2026, there have been no schedule 4s filed."
[6] PJM DER Aggregator overview"A Component DER may not exceed 5 MW.""A DER Aggregation Resource must be at least 100 kW.""EDC may override PJM dispatch to preserve distribution system reliability; DER Aggregator should update the applicable bidding parameters of the affected DER Aggregation Resource to reflect the override."
[7] The Relay 2222 kickoff"NYISO. Full Order 2222 implementation targeted by the end of 2026, with staged functionality along the way. NYISO has enabled participation for some DER aggregations already, but the full software and settlement stack completes in 2026.""ISO New England. Energy and ancillary services open on November 1, 2026. Capacity participation aligns with Forward Capacity Auction 19 milestones in early 2026.""PJM. Capacity market participation aligns with a February 1, 2027 effective date. Energy and ancillary services follow on February 1, 2028. The long lead is driven by significant clearing engine and registration system changes.""SPP. Second quarter of 2030 for full Order 2222 functionality, subject to ongoing revisions.""New England. 0.3 to 0.6 gigawatts by late 2026 as energy and ancillary services open, with capacity market participation guiding earlier commitments.""Add those up and a realistic summer 2026 unlock is 1.6 to 2.7 gigawatts of dependable, dispatchable capacity that clears wholesale markets with verifiable baselines.""PJM’s 2026 to 2027 auction cleared at the system cap of roughly 329 dollars per megawatt per day."