Capacity market participation (FERC Order 2222)
Financial and capital markets firms with distributed energy resource portfolios or grid-edge asset exposure are navigating a direct compliance question raised by Federal Energy Regulatory Commission Order 2222: whether DER aggregators operating in FERC-jurisdictional capacity markets create new disclosure, risk-weighting, or counterparty obligations at the firm level. The Federal Energy Regulatory Commission finalized Order 2222 in 2020, but implementation has been uneven across regional transmission organizations, and the U.S. Securities and Exchange Commission has begun scrutinizing how registered entities characterize capacity market revenue streams in financial statements. Compliance teams are currently mapping which RTO tariff filings trigger material disclosure thresholds before those filings clear state-level review.
Watch
- FERC Order 2222 RTO compliance deadlines vary by region; PJM and CAISO timelines diverge materially
- SEC Staff Bulletin on climate-adjacent revenue disclosures applies to capacity contract income
- State utility commission tariff rejections can unwind federal capacity market participation rights
- Counterparty credit exposure to DER aggregators under new FERC participation models
- CFTC jurisdiction questions on financially-settled capacity contracts remain unresolved
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