Dispatchable energy systems market access

(a) Definitions Section 3 of the Federal Power Act (16 U.S.C. 796) is amended by adding at the end the following: (30) Qualifying behind-the-meter distributed energy system facility; qualifying BTM DES facility The term qualifying behind-the-meter distributed energy system facility or qualifying BTM DES facility means a facility that— (A) is an energy storage system (including a battery energy storage system), a fuel cell system, a generator, or other resource— (i) that can be brought online within 15 minutes of being called on for deployment; and (ii) the output of which can be dispatched and adjusted at the signal of the system operator; (B) is located behind the meter of a retail customer of a distribution utility (as defined in section 217(a)); (C) has a rated capacity of not less than 5 kilowatts; and (D) maintains metering and telemetry capabilities that— (i) are sufficient to dispatch the facility, account for withdrawals from and injections to the grid, and communicate all relevant operational data from the facility; and (ii) are not required to include equipment owned or installed by the distribution utility (as so defined), and may include the use of device-level equipment, including inverters. (31) Qualifying behind-the-meter distributed energy system aggregation; qualifying BTM DES aggregation The term qualifying behind-the-meter distributed energy system aggregation or qualifying BTM DES aggregation means an aggregation of 2 or more qualifying BTM DES facilities— (A) with a combined capacity of not less than 100 kilowatts; and (B) that maintains aggregation-level metering and telemetry capabilities sufficient to facilitate the dispatch and market settlement of the aggregation.. (b) Rule of construction Section 201 of the Federal Power Act (16 U.S.C. 824) is amended by adding at the end the following: (h) Qualifying BTM DES facilities and aggregations The designation of a facility as a qualifying BTM DES facility or an aggregation of 2 or more facilities as a qualifying BTM DES aggregation does not, of itself, subject any of the following to the jurisdiction of the Commission: (1) The facility or aggregation. (2) The retail electric service provided to or for the facility or aggregation. (3) The distribution service on which the facility or aggregation relies.. (c) Wholesale market access for qualifying BTM DES aggregations Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as amended by section 2107(b)) is amended by adding at the end the following: 229. Wholesale market access for qualifying BTM DES aggregations (a) Definitions In this section: (1) Commission The term Commission means the Federal Energy Regulatory Commission. (2) Double compensation The term double compensation means payment through or by both a wholesale market and a State-jurisdictional retail market or program for providing the same service during the same time interval. (b) Just and reasonable practices Effective on the date that is 18 months after the date of enactment of this section, it shall not be just and reasonable within the meaning of sections 205 and 206 for any Transmission Organization to maintain rates, terms, or conditions of service that, by their terms and to the extent that such rates, terms, and conditions directly affect wholesale rates, prevent the participation of any qualifying BTM DES aggregation in wholesale energy, capacity, or ancillary services markets administered by the Transmission Organization. (c) Prohibited practices The following practices shall not be considered to be just and reasonable within the meaning of sections 205 and 206: (1) Imposing metering, telemetry, or equipment requirements that are inconsistent with the definitions of the terms qualifying BTM DES facility and qualifying BTM DES aggregation in section 3. (2) Requiring a qualifying BTM DES facility or qualifying BTM DES aggregation to participate in the energy market as a precondition to participating in the capacity market. (3) Requiring the joint participation with any resource co-located with a Qualifying BTM DES facility as a condition for inclusion in a qualifying BTM DES aggregation. (4) Any other practice otherwise described in subsection (b). (d) Compliance filings (1) Transmission Organization filings Not later than 180 days after the date of enactment of this section, each Transmission Organization that administers a wholesale market subject to the jurisdiction of the Commission shall file with the Commission proposed rates, terms, and conditions of service that comply with the requirements of this section. (2) Commission action Not later than 180 days after the filing of a proposal under paragraph (1), the Commission shall— (A) approve the proposal if the Commission determines that the proposal complies with this section; or (B) require or impose such changes as the Commission determines to be just, reasonable, and in compliance with this section. (e) Complaints (1) In general The Commission shall act on the merits of any complaint alleging noncompliance with this section not later than 180 days after the date on which the complaint is filed. (2) Consolidation To maximize administrative efficiency, the Commission may consolidate and act upon related complaints with respect to a given Transmission Organization. (f) Dual participation; prohibition on double compensation (1) Preservation of State program eligibility Participation by a qualifying BTM DES facility in a State-jurisdictional retail market or program shall not disqualify the qualifying BTM DES facility from participating in a wholesale market administered by a Transmission Organization, and nothing in this section requires a qualifying BTM DES facility to participate in any wholesale market. (2) Prohibition on double compensation No qualifying BTM DES facility or qualifying BTM DES aggregation shall receive double compensation. (3) Qualifying BTM DES rate filing (A) In general Not later than 180 days after the date of enactment of this section, each Transmission Organization shall file with the Commission under section 205 revisions to its tariff establishing settlement, metering, and telemetry protocols that exclude from wholesale market settlement the quantity of energy, ancillary service, or capacity, evaluated on a service-by-service basis, for which a qualifying BTM DES facility has received or will receive compensation under a State-jurisdictional retail market or program, such that, for example, a BTM DES facility that has earned retail energy credit but not ancillary services or capacity credit may receive wholesale compensation for capacity and ancillary services without receiving any wholesale energy compensation. (B) Electric utilities Each public utility that provides distribution service to a qualifying BTM DES facility shall provide to the applicable Transmission Organization and aggregator, in a form and on a schedule established by the Transmission Organization, the interval metering data and program-participation information necessary to implement subparagraph (A), subject to such protections for customer-specific information as the applicable State commission may require. (C) Certification (i) In general Each aggregator shall certify to the applicable Transmission Organization, on a schedule established by the Commission— (I) each State-jurisdictional retail market or program from which each qualifying BTM DES facility has received compensation; and (II) on the basis of final determinations made by the Commission arising from the proceedings initiated under subparagraph (A), that no qualifying BTM DES facility in its aggregation has retained double compensation during the certification period. (ii) Treatment A certification under this subparagraph shall constitute a statement made to the Commission for purposes of sections 316 and 316A. (4) Complaint with respect to double compensation (A) In general Any person, electric utility, State, municipality, or State commission aggrieved by alleged double compensation may file a complaint pursuant to section 206. (B) Procedure In a proceeding initiated pursuant to a complaint under subparagraph (A), if a qualifying BTM DES facility or qualifying BTM DES aggregation that is the subject of the complaint meets the eligibility requirements of both a wholesale market and a State-jurisdictional program, the complainant in that proceeding shall— (i) bear the burden of proof before the Commission; and (ii) demonstrate that— (I) double compensation has in fact occurred or is imminent; and (II) such double compensation could not be avoided through reasonable adjustments to— (aa) wholesale market compensation received by the applicable qualifying BTM DES facility or qualifying BTM DES aggregation; or (bb) the retail bill associated with the qualifying BTM DES facility or qualifying BTM DES aggregation, using metering and telemetry data that meets the requirements of the wholesale market. (C) Limitation A complaint under subparagraph (A) shall be filed not later than 5 years after the date on which the alleged double compensation was received. (5) Wholesale market compensation adjustment If the Commission determines that double compensation could be avoided through an adjustment to a rate, term, or condition of service under the jurisdiction of the Commission pursuant to section 205, the Commission may initiate a proceeding consistent with section 206 to eliminate double compensation. (6) Disgorgement; penalties (A) Disgorgement If the Commission finds that double compensation has occurred, the Commission shall order disgorgement of the full amount of the double compensation received. (B) Penalties If the Commission determines that double compensation has been knowingly retained, the Commission may order penalties, which may include— (i) monetary penalties of up to 3 times the amount of the double compensation received for each day that the double compensation was knowingly retained after the date of receipt, without regard to the limitations described in section 206(b); and (ii) suspension or termination of the participation of a qualifying BTM DES facility, qualifying BTM DES aggregation, or aggregator in a wholesale market administered by a Transmission Organization. (g) Annual reporting Each qualifying BTM DES facility and qualifying BTM DES aggregation participating in a wholesale market under this section shall submit to the Commission, not later than March 30 of each year, a public report that summarizes and quantifies all services provided by the qualifying BTM DES facility or qualifying BTM DES aggregation during the preceding calendar year to— (1) wholesale markets subject to the jurisdiction of the Commission; and (2) State-jurisdictional retail markets and programs within regions subject to the jurisdiction of the Commission.. (d) Distribution utility interconnection and non-Interference Part II of the Federal Power Act (16 U.S.C. 824 et seq.) (as amended by subsection (c)) is amended by adding at the end the following: 230. Distribution utility obligations with respect to qualifying BTM DES facilities and qualifying BTM DES aggregations (a) Definitions In this section: (1) Commission The term Commission means the Federal Energy Regulatory Commission. (2) Distribution utility; load-serving entity The terms distribution utility and load-serving entity have the meanings given those terms in section 217(a). (b) Interconnection obligation (1) In general Except as otherwise provided by State law or by the State regulatory authority with jurisdiction over the distribution utility, any distribution utility located within the geographic footprint of an organized wholesale market administered by a Transmission Organization shall interconnect any behind-the-meter resource that is eligible to participate in that wholesale market, including any qualifying BTM DES facility or qualifying BTM DES aggregation, in a timely fashion and with rates, terms, and conditions of service that— (A) allow the behind-the-meter resource to export energy to the grid, if applicable; and (B) do not prevent, impede, or unreasonably condition the participation of the behind-the-meter resource in the wholesale market. (2) Savings provision Nothing in this subsection authorizes the Commission to prescribe the rates, terms, or conditions of distribution-level interconnection service. (c) Acceptance of wholesale market metering data (1) In general Any distribution utility or load-serving entity providing retail electric service to a customer at whose premises a qualifying BTM DES facility or qualifying BTM DES aggregation is located shall accept the same metering and telemetry data used by the wholesale market for purposes of market participation by that qualifying BTM DES facility or qualifying BTM DES aggregation. (2) Requirement The manner in which the data described in paragraph (1) is used to adjust the retail bill of a customer, including any adjustment to account for energy exported or withdrawn, shall be determined by the State regulatory authority having jurisdiction over retail rates. (d) Prohibition on interference (1) In general No distribution utility shall purposefully use its control over the distribution system or retail sales to prevent any behind-the-meter resource eligible to participate in a wholesale market subject to the jurisdiction of the Commission from participating in such wholesale market. (2) Certain actions Nothing in this subsection limits a distribution utility from taking actions reasonably necessary to maintain the safety, reliability, or operations of the distribution system. (e) Commission enforcement (1) In general The Commission shall have authority to enforce the provisions of this section, and any person may file with the Commission a complaint alleging a violation of this section. (2) Requirement The Commission shall act on the merits of any complaint filed under paragraph (1) not later than 180 days after the date on which the complaint is filed. (f) Applicability to public power and certain cooperatives Except to the extent that compliance is required under State law, the requirements of subsections (b), (c), and (d) shall be voluntary with respect to distribution utilities that are entities described in section 201(f).. (e) Establishment of program To facilitate voluntary streamlined process for local permitting of qualifying distributed energy systems (1) Definitions In this subsection: (A) Authority having jurisdiction The term authority having jurisdiction means any State, county, local, or Tribal office or official with jurisdiction— (i) to issue permits relating to qualifying distributed energy systems; (ii) to conduct inspections to enforce the requirements of a relevant code or standard relating to qualifying distributed energy systems; or (iii) to approve the installation of, or the equipment and materials used in the installation of, qualifying distributed energy systems. (B) Qualifying distributed energy system The term qualifying distributed energy system means any equipment or materials installed in, on, or near a building or premises to support onsite or local energy use, including equipment or materials, the primary function of which is— (i) to generate electricity from distributed renewable energy sources, including solar photovoltaic systems or similar solar energy technologies; (ii) to store and discharge electricity from batteries with a capacity of at least 2 kilowatt hours; (iii) to charge a plug-in electric drive vehicle at a power rate of at least 2 kilowatts; or (iv) to refuel a hydrogen fuel cell electric vehicle. (C) Secretary The term Secretary means the Secretary of Energy. (2) Program Not later than 180 days after the date of enactment of this Act, the Secretary, in consultation with trade associations and other entities representing distributed energy system installers, organizations representing State, local, and Tribal governments engaged in permitting, and other interested stakeholders, shall carry out a program to further develop, expand, and support the adoption of a voluntary streamlined permitting and inspection process for authorities having jurisdiction to use for the permitting of qualifying distributed energy systems. (3) Activities of the program In carrying out the program established under paragraph (2), the Secretary shall— (A) further develop and expand an exemplary streamlined permitting process that includes an online permitting platform— (i) for expediting, standardizing, and streamlining permitting; and (ii) that authorities having jurisdiction may voluntarily use to receive, review, and approve permit applications relating to qualifying distributed energy systems; (B) establish targets for the adoption of a streamlined, expedited permitting process by authorities having jurisdiction; (C) provide technical assistance and training directly or indirectly to authorities having jurisdiction on using and adopting the exemplary streamlined permitting process described in subparagraph (A), including the adoption of any necessary building codes; (D) develop a voluntary inspection protocol and related tools to expedite, standardize, and streamline the inspection of qualifying distributed energy systems, including— (i) by investigating the potential for using remote inspections; (ii) by investigating the potential for sample-based inspection for distributed energy system installers with a demonstrated track record of high-quality work; and (iii) by investigating opportunities to integrate the voluntary inspection protocol into the online permitting platform described in subparagraph (A) and the platforms of government software providers; and (E) take any other action to expedite, standardize, streamline, or improve the process for permitting, inspecting, or interconnecting qualifying distributed energy systems. (4) Support services The Secretary shall— (A) support the provision of technical assistance to authorities having jurisdiction, any administrator of the online permitting platform described in paragraph (3)(A), government software providers, and any other entity determined appropriate by the Secretary in carrying out the activities described in paragraph (3); and (B) provide such financial assistance as the Secretary determines appropriate from any funds appropriated to carry out this subsection. (5) Authority having jurisdiction certification program (A) In general The Secretary may certify authorities having jurisdiction that implement the exemplary streamlined permitting process described in paragraph (3)(A). (B) Process The Secretary may confer a certification under subparagraph (A) through existing programs within the Department of Energy. (C) Prizes The Secretary may award prizes to authorities having jurisdiction, using funds appropriated to the Secretary to carry out this subsection, to encourage authorities having jurisdiction to adopt the exemplary streamlined permitting process or the voluntary inspection protocol established under subparagraphs (A) and (D) of paragraph (3), respectively. (6) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this subsection $20,000,000 for each of fiscal years 2026 through 2031.