Third-Party Provision of Ancillary Services

Order 784 required transmission providers to allow third parties — not just the incumbent transmission owner — to provide certain ancillary services to transmission customers. Previously, vertically integrated utilities could effectively monopolize the provision of ancillary services in their service territories, foreclosing competition. The order established requirements for transmission providers to use competitive processes to acquire ancillary services where viable markets exist, promoting efficiency and lower costs. This opened important revenue streams for independent generators, demand response providers, and energy storage resources.