Leaving Markets is No Easy Answer to FERC Orders that Undercut State Clean Energy Commitments

Posted by Jeff Dennis, Prusha Hasan, and Caitlin Marquis on Sep 9, 2020 2:00:00 PM

FRR Question-745

Frustrated by recent decisions from the Federal Energy Regulatory Commission (FERC) and dismayed to see their policy objectives undermined by wholesale market rules, a growing number of states are considering taking matters into their own hands. Specifically, in response to FERC’s rulings disadvantaging resources that benefit from state clean energy policies, some states in PJM Interconnection and ISO New England, along with New York, are considering alternatives to centralized capacity markets – including leaving these markets altogether. An AEE background paper released last week cautions that leaving an independently operated capacity market is no quick fix for the curve balls FERC has thrown at states. Rather, leaving centralized capacity markets is a fraught choice that should be pursued only if all other potential pathways have been thoroughly exhausted. Make no mistake – the current FERC majority is attempting to undermine clean energy and state choices. Even in the face of that threat, though, states would be better off working with RTOs/ISOs and other stakeholders to identify reforms to energy, ancillary services, and capacity markets to align them with state clean energy policies, rather than undermine them.

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Topics: Wholesale Markets

Why Wholesale Markets are Important to an Advanced Energy Future

Posted by Jeff Dennis on Sep 2, 2020 11:00:00 AM

Wholesale Market RTO-745

Friction between organized wholesale electricity markets operated by Regional Transmission Organizations and Independent System Operators (RTOs/ISOs) and the trend – driven by policy, technology, and market forces – toward cleaner energy options have generated plenty of headlines in recent years. The barriers to entry that advanced energy technologies sometimes face in wholesale markets have come into stark relief, as federal policies like the Federal Energy Regulatory Commission’s (FERC) Minimum Offer Price Rule (MOPR), legacy market rules and market designs, and efforts to use the levers of federal power to prop up aging uneconomic power plants and put new regulatory barriers in front of clean energy resources collide with rapidly increasing state and customer ambitions to switch to clean energy.    

Despite these conflicts, competitive wholesale markets have still shown themselves to be a platform to integrate new technologies, increase transparency, and harness competitive forces over broad geographic regions to scale development of low-cost advanced energy technologies, improve customer access to those technologies, and replace uneconomic existing fossil fuel plants. FERC opened these markets to full participation by energy storage resources with its Order No. 841, creating a 40 GW opportunity to scale up development of technology that will be instrumental in the 100% clean energy grid of the future. And outside of FERC, RTO/ISO stakeholder processes are moving ahead on their own to reform market rules and operating practices to integrate transformative hybrid solar/wind-plus-storage power plants and consider a role for carbon pricing in the markets, providing a forum for discussions and market design progress not available in other regions.   

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Topics: Wholesale Markets

Top 10 Utility Regulation Trends of 2020 – So Far

Posted by Hannah Polikov and AEE Regulatory Team on Aug 26, 2020 9:30:56 AM

top-10-utility-reg-2020-so-far-745

In December, we published a list of the top 10 utility regulation trends of 2019. With 2020 now past the halfway point, we check in on the top public utility commission (PUC) actions and trends so far this year. Ten trends stand above the rest, from the impact of COVID on everything, to a growing trend in electric vehicle make-ready investments, to an increasing number of states implementing 100% clean energy targets. And, for the first time, we are including in our curation a key trend in federal regulation of wholesale electricity markets, as it goes directly to the question of who is in charge of energy policy in a changing electricity landscape. Prepare to settle in, as here is the full round-up of the top 10 utility regulation trends so far in 2020.

Note: some links in this post reference PUC filings and other documents in AEE's software platform, PowerSuite. Click here to sign up for a free trial.

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Topics: PUCs, 21st Century Electricity System, Regulatory, Wholesale Markets

How Wholesale Electricity Markets Can Get Us to a 100% Clean Energy Future

Posted by Prusha Hasan and Dylan Reed on Jul 21, 2020 9:38:39 AM

CLEAN Future Act blog post Final-730

Over the past two years, climate change has resurfaced as a top policy priority in Congress with policymakers from both parties offering ways to reduce carbon emissions. AEE has actively engaged in this conversation, testifying to Congress on how the country can achieve a 100% clean energy future in the power sector cost effectively. While many, including AEE, have focused on the need to establish a strong and enforceable target for meeting a 100% clean future, less attention has been paid to the ways wholesale electricity markets could drive toward this target, lowering consumers costs, expanding consumer access to clean energy, and reducing carbon emissions. That is, until now, as federal lawmakers are turning to expansion and improvement of wholesale markets as well as reducing barriers for advanced energy to access these markets as part of their plans.

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Topics: Federal Policy Update, Wholesale Markets

How Energy Efficiency and Demand Response are Turning Electricity Supply and Demand Upside Down – and Saving Money

Posted by Prusha Hasan on Jun 29, 2020 12:30:00 PM

IssueBrief EE & DR-1

In the last decade, technology has changed nearly every facet of our lives. We’ve traded in touch-tone phones for smartphones, replaced cabs with ride sharing apps, and upgraded bulky desktops for sleek laptops. While technology has changed life in so many dramatic ways, less obvious, but no less dramatic is the way technological advancements have changed the way we use electricity. Most notable is the way technology has allowed us to gain control over electricity demand, through energy efficiency and demand response. The challenge now is to make sure that newfound power to reduce and manage demand gets fully utilized in wholesale electricity markets.

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Topics: Wholesale Markets, Energy Efficiency