Advanced Energy Perspectives

Last month, AEE filed a petition for declaratory order with the Federal Energy Regulatory Commission (FERC) raising alarm over suggestions that ISO New England (ISO-NE) might implement significant changes to the measurement and verification of energy efficiency resources in the region’s Forward Capacity Market (FCM) without following appropriate procedures. The petition, filed jointly with Sustainable FERC Project, seeks an order from FERC that would protect market participant investments in existing energy efficiency resources from retroactive changes made solely at ISO-NE’s discretion, and ensure that any future changes would occur only through established procedures, including review and approval by stakeholders and ultimate FERC approval.

In 2018, wholesale electricity markets were a bumpy ride for the advanced energy industry. The year began with major victories for the sector, including the Federal Energy Regulatory Commission’s (FERC) unanimous rejection of the Trump Administration’s proposal to bail out uneconomic coal and nuclear power plants, and FERC’s adoption of a final rule (Order 841) opening wholesale electricity markets to energy storage resources.  But headwinds developed as the year went on, including FERC’s June order requiring PJM to make major changes to its capacity market that could result in new barriers to participation for advanced energy resources, and moves in PJM and ISO New England to favor so-called “fuel secure” resources. After a turbulent 2018, what will 2019 bring? Here are some of the key areas where AEE will be engaged to ensure that advanced energy resources can continue to achieve growth in wholesale electricity markets.   

Image courtesy of Chrishna and used under a Creative Commons license.

Severe weather events – whether hurricanes, wildfires, cold snaps, or heat waves – increasingly play a role in the lives of Americans. While extreme weather creates all sorts of problems, high on the list is the stress they put on the electric grid. Prior to this year, the 2014 Polar Vortex has been pointed to by those concerned about the ability of the electric grid to withstand severe weather events, and we’ve noted how wind and demand response helped keep the lights on during that cold snap. But in 2018, it was an expected heat wave in Texas that loomed as a potential threat to the grid. Would the Electric Reliability Council of Texas (ERCOT), the grid operator that relies more on market principles than any other in the country, be able to keep on the lights? The answer turned out to be yes – with lessons that could prove instructive to the 116th Congress when it convenes in January.  

PJM, the nation’s largest regional grid operator and the largest wholesale electricity market in the world, is at a crossroads: Can it run its markets while accommodating the ability of states to enact clean energy policies, or will it adopt new market rules that put the continuation of those policies at risk? With zero-emission credits (ZECs) supporting existing nuclear power plants in states like Illinois and New Jersey adding to the 29 states across the country already having renewable portfolio standards (RPS) that provide support in the form of renewable energy certificates (RECs) – and many of those states continuing to ratchet up RPS requirements – certain power plant operators have voiced concerns about what they see as “distortions” of the wholesale market. FERC is listening and making big moves. AEE is fully engaged in FERC’s proceedings, working to make sure that advanced energy resources are not disadvantaged in response.

What is the price of political cronyism? High, when it comes to paying power plants that are not needed to keep the lights on, just to exist. But that is what the Trump Administration is apparently getting ready to do. Or at least trying to do – an earlier attempt to do so was rejected by regulators, most of them appointees of President Trump. Not taking no for an answer, the Administration has decided to go bigger, with a bigger price tag. How much bigger? That’s what we wanted to find out.