News Stories

In comments in a New Jersey BPU proceeding concerning virtual power plants, extensive comments were filed by parties on a wide range of topics including whether the electric distribution companies (EDCs) should be allowed to participate as virtual power plant (VPP) aggregators as well as own and operate energy storage.

Not surprisingly EDCs believe they already play the role of aggregators over a number of technologies to that can easily directly interfacing with customers and believe they should be allowed to provide large scale reductions in peak load and added benefits to the distribution system by owning and operating energy storage.

Below is a brief summary of some of the parties filed comments.

ENGIE – Examining compensation mechanisms for an effective DER aggregation market – “ENGIE recommends a program that compensates participating DERs via a value stack comprising a fixed upfront incentive and ongoing performance incentives. The value stack should compensate the DER for different grid services that it provides, including:

• Energy value (avoided energy cost or LMP)
• Capacity values (resource adequacy / peak reduction)
• Ancillary services (regulation, reserves)
• Distribution values (avoided upgrades, congestion relief), and
• Transmission values (avoided upgrades, congestion relief).”

Defining the roles of utilities, third-party aggregators, and the system operator for the VPP Program – Illinois – The Board should consider elements of Illinois’ omnibus storage law, CRGA, as it develops New Jersey’s VPP and GSESP programs. CRGA is the third major state-level clean energy omnibus 3 legislation passed in Illinois over the past decade. CRGA introduces a clear value stack for distributed storage to address energy affordability and reliability concerns for residential and commercial customer supply rate spikes caused by MISO and PJM capacity prices. New Jersey ratepayers are similarly exposed to PJM capacity price fluctuation on their electricity bills. CRGA enables three mechanisms in which DERs can participate to earn value, providing flexibility for various asset types, both BTM and FOM, as well as standalone BESS and paired with solar. Standout provisions in CRGA include flexibility for different asset types, a comprehensive value stack, and forward-looking statutory certainty.

“New York –  has developed one of the most advanced models for coordinating retail DER programs with wholesale market participation through NYISO’s Distributed Energy Resource (DER) Aggregation Participation Model, launched in April 2024. This framework allows aggregators to bundle DERs into VPPs and bid them directly into wholesale energy, capacity, and ancillary service markets, effectively letting small resources act like traditional generators. The model is explicitly aligned with FERC Order 2222 and is evolving toward full compliance by the end of 2026, with early participation from aggregators already demonstrating real-world implementation. While coordination between utilities and the wholesale market (e.g., dispatch control, data sharing, and avoiding double compensation) is still being refined, New York represents the closest existing example of a fully integrated retail wholesale VPP framework.

“Massachusetts – has successfully scaled VPPs through programs like ConnectedSolutions, which aggregate customer-sited batteries, thermostats, and flexible load into utility-dispatched resources that reduce peak demand and earn pay-for-performance incentives. However, coordination with wholesale markets in ISO New England is more limited and indirect: while DER aggregations can participate in wholesale markets (e.g., capacity or energy) under ISO-NE rules, retail programs and wholesale participation are typically managed in parallel rather than co-optimized in real time. To prevent double payment, utilities adjust incentives administratively rather than through integrated market dispatch, meaning Massachusetts exemplifies a strong “retail-first” VPP model with partial—but not fully integrated—wholesale value stacking.”

RESA – “RESA strongly urges the Board to accelerate its adoption of a final AMI Data Access rulemaking and to initiate an accelerated proceeding regarding the AMI meters installed by PSE&G, JCP&L, and ACE that cannot provide interval usage data at a sufficiently granular level. Access to customers’ AMI data will enable TPSs to offer their customers innovative and cost-saving programs, including VPPs, demand response, TOU rates, and energy usage alerts.”

ACE – “ACE approaches this Request for Information (“RFI”) with the perspective that DERs will play an increasingly central role in meeting New Jersey’s reliability and affordability needs — but only if they are integrated into the distribution system through a coherent, interoperable, and technically sound architecture. The Company’s experience across multiple jurisdictions demonstrates that fragmented program design, inconsistent metering requirements, and uncoordinated dispatch signals can undermine customer trust, increase program costs, and reduce the reliability value DERs are capable of providing.”

“DERs cannot deliver their full reliability and affordability value without utility‑owned and utility‑operated infrastructure, including AMI systems, distribution‑level Grid DERMS, and the underlying grid assets that support hosting capacity and dispatchability. ACE’s role is therefore foundational: the Company not only provides the physical and operational infrastructure upon which VPPs, aggregators, and customer‑sited technologies depend, but also serves as the system operator and system integrator responsible for deploying and coordinating non‑wires alternatives, flexible interconnection solutions, advanced forecasting tools, microgrid integration, and managed charging and V2G operations. These operator and integrator functions ensure that DERs are planned, interconnected, and dispatched in ways that enhance system reliability, reduce costs, and support New Jersey’s long‑term affordability and decarbonization goals.”

“As the owner and operator of the distribution system, ACE has a statutory and operational responsibility to ensure the safe, reliable, and efficient delivery of electricity to all customers. This responsibility includes maintaining the integrity of metering and billing systems, coordinating DER operations to protect distribution system reliability, and ensuring that customer‑sited resources are integrated in a manner consistent with engineering standards, cybersecurity requirements, and cost‑causation principles.”

“ACE’s recommendations throughout this filing reflect this responsibility. They are designed to ensure that DER growth enhances, rather than compromises, distribution system reliability; that customer compensation is grounded in accurate, auditable metering; and that program design remains aligned with the operational realities of owning and operating the distribution grid.”

“For these reasons, ACE’s comments emphasize the importance of a unified, statewide DER architecture that aligns GSESP Phase 2, the VPP Program, Proactive System Upgrade Plan (“PSUP”) capabilities, GridFlex tariffs, and AMI data access standards. This architecture is not a theoretical construct; it is a practical necessity to ensure that DERs can be measured accurately, dispatched predictably, compensated fairly, and integrated safely into the distribution system. It is also essential to developing a New Jersey DER framework that is compatible with PJM’s evolving Order 2222 participation model and the broader regional reliability landscape.”

“The recommendations that follow reflect ACE’s commitment to supporting the State’s clean energy and reliability goals while ensuring that program design remains technically feasible, customer-centric, and aligned with cost-causation principles. ACE looks forward to continued collaboration with the Board and stakeholders as New Jersey advances this next phase of DER integration.”

JCPL – “JCP&L recognizes and supports the State’s timely efforts to explore demand‑side and distributed solutions to address largely wholesale‑driven generation price pressures. At the same time, potential VPP frameworks should not be considered in isolation, but rather as part of a broader portfolio of State initiatives that collectively influence customer‑sited technology adoption and grid outcomes.

“As detailed throughout the Company’s responses, VPP implementation will necessarily rely on enabling technologies, such as battery storage, EV charging infrastructure, smart thermostats, and other demand‑modulating devices. These technologies and supporting infrastructure are already being advanced through multiple State programs and policy initiatives, including the PSUP Straw Proposal, AMI rule proceedings, energy efficiency through the Clean Energy Act framework, EV initiatives, and the GSESP.”

“Absent early coordination, there is a meaningful risk that VPP‑relevant technologies, controls, and customer incentives could be developed in a fragmented or duplicative manner across multiple programs with differing objectives, eligibility criteria, and operational requirements. JCP&L encourages the Board to consider whether VPP‑enabling technologies would be more effectively supported under a coordinated or consolidated framework that explicitly recognizes their cross‑program value, rather than implemented piecemeal through multiple and potentially competing initiatives. Such coordination would better ensure that customer investments, utility systems, and third‑party platforms evolve in a complementary manner aligned with State objectives.”

NJNG – “In the case of VPP and Distributed Storage, natural gas and electric infrastructure are intrinsically tied together and can be leveraged to provide energy in a cost-effective and environmentally sound manner. The RFI sets the goal of reducing load to and dependency on PJM and suggests utilizing VPP and Distributed Storage as programs to reach these goals.”

“NJNG believes the most cost-effective way to achieve this goal is to provide a multitude of pathways, including ones that leverage natural gas infrastructure, to incentivize more distributed generation within the State. All types of distributed generation need to be considered, including VPP, microgrids, demand response and all other examples of behind-the-meter generation that can be leveraged to provide firm, dispatchable power supply or reduce power demand on the stressed PJM grid. Additionally, all types of distributed generation technologies need to be considered, including but not limited to fuel cells, linear generators, microturbines, combined heat and power reciprocating engines, backup generation, hybrid heat, and waste heat to power. In all these applications, the natural gas distribution infrastructure provides built-in energy storage that is capable of being dispatched for extended periods of time.”

“The RFI’s background ties New Jersey’s VPP and distributed storage work directly to grid reliability, resiliency and affordability concerns driven by a supply-demand gap in the PJM footprint and the need to “cost-effectively manage load growth.” Aligning program design with multiple energy solutions to reduce peak demand, beyond any single technology or types of pathways, supports the Board’s objective to increase market competition, improve reliability and ensure affordability for ratepayers. A technology-inclusive framework also better positions New Jersey to meet the accelerated timelines referenced in the RFI (near-term program launch and readiness for FERC Order 2222 participation milestones) by leveraging existing assets and proven program structures while longer-lead grid modernization capabilities mature.”

PSE&G – “New Jersey is facing a resource adequacy challenge that requires a modernized, comprehensive approach to planning its energy future. As is acknowledged in the Governor’s Executive Order No. 2, DERs—including VPPs—can be key components of a reliable, affordable grid. When appropriately designed, VPPs can help address both regional energy supply needs and localized constraints, especially as commercial and industrial demand grows.”

“PSE&G is currently implementing a small-scale, voluntary Demand Response (“DR”) program, and this summer is launching a VPP component of this program based on existing battery energy storage systems. 1 Through these first efforts, the Company is just beginning to learn customer behaviors, operational impacts, and potential benefits. We are also learning that VPP deployment is complex, and larger-scale deployment may take time. The good news is that PSE&G’s customers have responded enthusiastically to the DR program, and there are near term steps that the State can take to derive benefits from DERs, energy storage, and VPPs while working on a broader policy for VPPs on a larger scale.”

“As the State continues to navigate the current resource adequacy crisis, PSE&G encourages the Board to consider the following:

1) Policy for DERs, VPPs, and energy storage should be part of a broader resource adequacy strategy including planning for “all-of-the-above” generation.

2) Deployment of DERs, VPPs and energy storage requires modernized system planning and cost recovery frameworks for distribution system upgrades.

3) VPP and energy storage policy can include short-term actions including scaling up currently approved DER and VPP programs, utility investment in storage, and consolidating storage and electric vehicle incentive programs into VPP policy.

4) Longer term, larger scale VPP policy requires expanded investment in DERMs systems and ensuring alignment with FERC Order 2222 requirements to cost-effectively maximize the potential benefits of VPP and energy storage.”

Read all comments at docket link here.