The REDUCE Act would require federal transmission organizations (RTOs/ISOs) to allow aggregators of retail customers to bid into organized wholesale electric markets. Specifically, aggregators would be permitted to submit bids that reflect the aggregated demand flexibility of customers served by utilities that distributed more than 4 million megawatt-hours (MWh) in the previous fiscal year. The bill preempts conflicting state prohibitions to the extent they do not conflict with market rules, and it directs the Federal Energy Regulatory Commission (FERC) to issue a final rule within 12 months of enactment. The main goal is to unlock demand-side resources (demand response) to improve market efficiency, reliability, and potential cost and emissions benefits.
Key Points
- 1Allows aggregators of retail customers to bid into organized wholesale electric markets via Transmission Organizations, focusing on large utilities (>4 million MWh distributed in the prior year).
- 2Overrides state prohibitions to participate in wholesale markets, so long as market rules permit such participation (state-level barriers could be overridden if not aligned with market rules).
- 3Bids would represent aggregated demand flexibility from utility customers, effectively enabling demand response as a competitive resource in wholesale markets.
- 4Requires the Federal Energy Regulatory Commission (FERC) to issue a final rule within 12 months of enactment (rulemaking timeline).
- 5The bill is titled the Responsive Energy Demand Unlocks Clean Energy Act (REDUCE Act) and emphasizes unlocking flexible demand as a pathway to cleaner energy and improved grid operation.