Coordinating Conflict: An Analysis of DER Aggregation in U.S. Electricity Regulation

• In Event: Electricity Markets, Pricing, and Utility Structure

Abstract

The integration of distributed energy resources (DERs) into wholesale electricity markets has emerged as a central challenge in U.S. energy governance. Technologies such as rooftop solar, battery storage, electric vehicles, and demand response are widely recognized as essential to decarbonization, affordability, and grid resilience, yet their incorporation into existing market structures has proven politically and administratively difficult. This paper examines how the Federal Energy Regulatory Commission (FERC) structured interaction among competing stakeholders across multiple policy arenas, and how those interactions shaped the institutional design of DER aggregation policy. The study analyzes three major FERC rulemaking proceedings related to distributed and demand-side resource participation in wholesale markets. Rather than treating these proceedings as a unitary policymaking process, the paper applies the Ecology of Games Framework (EGF) to examine the rulemaking as a system of interdependent arenas in which regional transmission organizations, utilities, market operators, DER aggregators, state regulators, consumer advocates, and clean energy organizations engaged in repeated, overlapping, and strategically interdependent interaction. Within this framework, the paper uses Ostrom's ADICO institutional grammar to code the institutional statements embedded in orders, stakeholder comments, and related regulatory texts, distinguishing how actors advanced particular rule types to defend or resist expanded DER participation. The core dataset consists of proposed rules, final orders, rehearing orders, technical conference records, and stakeholder comments submitted to FERC, supplemented by documents from regional transmission organizations and relevant industry and advocacy groups. Methodologically, the paper combines qualitative institutional coding with comparative process tracing across the three orders. Preliminary analysis suggests that FERC's rulemaking process functioned as a high-visibility coordinating arena that both widened participation and constrained the terms of conflict. Rather than producing consensus through shared preferences, the process enabled agreement by narrowing disputes into administratively tractable categories: market compatibility, operational feasibility, and jurisdictional boundary-setting. Pro-DER actors succeeded not simply by advocating inclusion, but by reframing aggregation as compatible with reliability and market order, while incumbent utilities and system operators embedded procedural and technical constraints into the final rules. The pattern across the three orders is one of incremental institutionalization: expanding access for distributed resources while preserving significant gatekeeping authority for existing market structures. This study contributes to public policy scholarship by demonstrating how contested clean energy reforms become governable through strategic interaction in fragmented institutional environments. It offers an approach to analyzing regulatory change that focuses not only on policy outcomes but on the evolving rule systems and arena interactions through which those outcomes are produced.

Author

• Rohan Khanvilkar, Portland State University
  Presenting Author