Advanced Energy Perspectives

How Wholesale Electricity Markets Work – and Don’t

Posted by Prusha Hasan and Dylan Reed

Oct 16, 2019 2:58:08 PM

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Two-thirds of the nation’s wholesale electricity sales occur in a competitive market managed by a Regional Transmission Organization (RTO) or Independent System Operator (ISO), with over 200 million customers in these areas and over $120 billion in annual energy transactions taking place. Under the Federal Power Act, these markets are overseen by the Federal Energy Regulatory Commission (FERC), which ultimately determines the rules for how wholesale electricity is bought and sold in the marketplace. RTOs/ISOs develop the market rules that dictate whether and how energy resources can participate and compete. Wholesale electricity markets should allow all resources to compete on price and performance, as the Federal Power Act requires that the rates, terms, and conditions of service governing wholesale competitive markets be “just and reasonable” and not grant any “undue preference or advantage.” Many market rules, however, are outdated, having been designed with older technologies in mind. Those rules can favor incumbent technologies and disadvantage newer and more innovative energy options – that is, advanced energy.

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Topics: Federal Policy Update, Wholesale Markets

Challenge to FERC and the Senate: Opening Wholesale Markets to Competition from All Advanced Energy Technologies

Posted by Dylan Reed and Prusha Hasan

Sep 26, 2019 12:02:56 PM

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In the advanced energy industry, all eyes are on the incredible shrinking FERC. With now two open seats, the Commission can barely muster a quorum – and not always, as a Trump Administration ethics pledge is keeping Commissioner Richard Glick from participating in important cases. Media outlets have reported that the White House plans to offer a single nomination to fill McIntyre’s seat, a potentially troubling departure from the tradition of pairing Republican and Democratic nominees. In flux as it is, FERC faces a range of pending decisions that could have huge impacts on the nation’s electricity market – and on advanced energy growth. Ultimately, what the advanced energy industry is looking for from FERC Commissioners – those now seated, and new ones to come – is for barriers to competition in wholesale markets to come down.

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Topics: Federal Policy Update, Wholesale Markets

Here’s a Glimpse of What Distributed Energy Resources Could Bring to Wholesale Markets – If They Are Given A Chance

Posted by Caitlin Marquis

Sep 17, 2019 11:30:00 AM

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Given how long we’ve been waiting – nearly three years now – for FERC to issue a final order directing RTOs/ISOs to develop rules for aggregated distributed energy resources (DERs) to take part in wholesale markets, it may seem that actual DER participation is still years away. In reality, several types of DER – from energy storage to distributed solar to electric vehicles and more – are slowly breaking through barriers to participate in wholesale markets, providing value to their owners and the electric power system as a whole. Read on for five real-world examples of DER participation in wholesale markets across the country. These examples provide just a glimpse of the value DERs could bring to wholesale markets, if they were given more of a chance. A final rule from FERC requiring systematic removal of barriers to DER participation in wholesale markets would unlock more of this value for wholesale markets and for consumers.

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Topics: Wholesale Markets

AEE Goes to Court to Stop Utilities and States From ‘Opting Out’ of FERC Energy Storage Rules

Posted by Jeff Dennis

Aug 21, 2019 4:14:28 PM

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In July, associations representing utilities and state regulatory agencies asked the United States Court of Appeals for the District of Columbia Circuit to overturn portions of the Federal Energy Regulatory Commission’s landmark Order No. 841. In that order, FERC adopted critical regulatory reforms that require regional wholesale electricity market operators to remove barriers to the participation of energy storage technologies in their markets. Last week, AEE led a broad coalition of clean energy associations and public interest advocates in formally intervening in the case to urge the court to uphold FERC’s bipartisan effort to remove regulatory barriers to the growth of electric storage. The entire advanced energy industry has much at stake.

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Topics: Wholesale Markets, Highlights

AEE to FERC: Confirm that ISO New England Can’t Change Rules for Energy Efficiency Resources without Following Established Processes

Posted by Jeff Dennis and Sierra Salser

Mar 20, 2019 4:41:11 PM

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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.

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Topics: Wholesale Markets

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Advanced Energy Perspectives is AEE's blog presenting news, analysis, and commentary on creating an advanced energy economy. Join the conversation!

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