UPDATED: Aug. 9, 2021: The Federal Energy Regulatory Commission issued a second deficiency letter on Friday following the Southeast Energy Exchange Market (SEEM) utilities' response to its initial, comprehensive request for more information. FERC, in its latest request, asked the utilities three questions on market power and independent oversight.

According to a SEEM spokesperson, the questions "are readily answerable" and the utilities will respond "thoroughly, efficiently, and promptly" in the 10 days provided by the commission.

Dive Brief:

• Utilities pursuing a centralized energy exchange market in the Southeast on Monday night filed an updated proposal with federal regulators, in an effort to provide more transparency on how the plan would work.

• Duke Energy, Southern Company, the Tennessee Valley Authority and others are attempting to create a Southeast Energy Exchange Market (SEEM) that would extend the Southeast's current bilateral market, creating a 15-minute energy exchange intended to more efficiently use existing transmission. But the Federal Energy Regulatory Commission raised a number of questions over the proposal last month, and asked the utilities to come back with more details on how the market would improve existing energy transactions in the region, and to provide more transparent details on the proposal.

• SEEM utilities responded to FERC by committing to provide confidential market data to the commission once the proposal is enacted, as well as clarifying and increasing oversight roles, among other actions.

Dive Insight:

The renewables industry and other stakeholders looking for broader market reforms in the Southeast view SEEM skeptically, but the utilities behind the proposal say the plan is a modest yet important step to using resources in the region more efficiently.

"SEEM is a simple but powerful structure that follows all FERC-approved rules and requirements for existing bilateral markets today, but with additional data transparency and reporting to FERC to prevent market power concerns," said Noel Black, vice president of governmental affairs for Southern Company, in a statement. "Based on careful design, analysis and learnings from other market structures, SEEM members are motivated to deliver cost-savings to customers in a new, different and highly efficient market structure."

FERC asked utilities in May to detail how the proposal would save customers money, how exactly market pricing will be determined, how it might impact utilities' existing market power in the Southeast and for more details on the governance structure. SEEM utilities in response said they would increase transparency around the inner-workings of the market structure by providing "substantial" confidential data to FERC on a weekly basis, post public market auditor reports, and responses to other regulatory inquiries, among other things.

The utilities said they did not believe these changes were necessary in order to comply with federal regulations, but that the changes are intended to "respect and heed the message suggested by the [FERC] Staff questions," as well as intervenor concerns which raised similar issues.

Intervenors in FERC's proceeding on the SEEM proposal, including the Solar Energy Industries Association, Advanced Energy Economy, the Renewable Energy Buyers Alliance (REBA) and the Advanced Energy Buyers Group argued in comments filed in March that the proposal was actually a "loose power pool," and should therefore be subject to FERC regulation. Further, they and other groups echoed FERC's comments that the proposal was lacking in transparency and argued the proposal would likely only strengthen utilities' stronghold on the Southeast market.

REBA and R Street Institute were also in support of a broader push to get FERC to organize the remaining regions in the U.S. that are not currently under a regional transmission organization. REBA is still reviewing the filing, but echoed previous comments that FERC should convene a technical conference with Southeast stakeholders to explore the option of forming an organized market in the region.

"[W]e support a competitive wholesale market in the SE to meet the ever-increasing customer demand for clean energy in the Southeast and to capture the full potential customer savings that are possible with a broader regional market," said Bryn Baker, director of policy innovation at REBA, in an email.