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Utility Dive: FERC Should Expand Organized Markets Across the US, Former Chairs and Commissioners Say

Posted by Catherine Morehouse on Jun 3, 2021

Utility Dive summarized support and criticism for a letter encouraging FERC to expand use of RTOs nationwide, citing a critical tweet by AEE’s Jeff Dennis. Read snippets below and the full article here.

A bipartisan group of former federal regulators are calling on the Federal Energy Regulatory Commission to expand organized wholesale power markets across the U.S., urging the commission to flex their full authority under the Federal Power Act.

Although discussions around RTO expansion are ongoing resistance to the shift is strong in markets, particularly the Southeast, where efforts to study potential benefits of moving the market toward a more organized structure in North Carolina are experiencing significant hurdles from the state's dominant utility. Questions remain on whether such an application of FERC's authority is politically feasible — or whether FERC has the bandwidth as it digs into potential capacity market reform, and is in the midst of implementing several major orders, among other things.

RTOs came into conflict with some of their states in the Northeast and Mid-Atlantic during the Trump administration. Grid operators and merchant generators raised concerns that state subsidies were nudging out newer power plants, and resulting rule changes left states with strong decarbonization mandates worried that their grid operators wouldn't enable those policies… 

All that has left FERC scrambling to revisit the rules set under the Trump administration, alongside implementing its storage and distributed energy resources orders, and embarking on a number of technical conferences. Taking on the restructuring of the rest of the country would no doubt be a heavy lift, stakeholders said.

Momentum has stalled at the federal level, Jeff Dennis, general counsel and managing director at Advanced Energy Economy, said in a tweet, and state efforts are met with strong resistance from utilities and their consultants.

"Unfortunately, we've spent so much time beating up the Northeastern RTOs over capacity markets and MOPR, we've shrouded the transparency, reliability, and cost (yes cost) benefits of RTOs and given these front groups an opening," he added. "RTOs aren't perfect. As Churchill might say, they are the worst form of grid governance, except for all of the others we've tried. We should not lose sight of the transparency and grid access benefits they provide when compared to traditionally vertically-integrated utilities."

Read the full article here.

Topics: AEE In The News