Dive Brief:
- Federal Energy Regulatory Commission (FERC) Chair Cheryl LaFleur sees streamlining the wholesale electricity market operations of U.S. Regional Transmission Operators (RTOs) as the commission’s first priority after last winter’s demand-driven price spike revealed the market’s price signal misdirection and inability to provide adequate supply, according to an interview with EnergyWire.
- FERC is studying the RTOs’ energy, ancillary service and capacity markets, which are more complex after the recent expansion of renewables and have driven out base load generators, leaving commissioners looking for market reforms that will alleviate market failures.
Dive Insight:
Wind and solar were not viable generation options when RTOs like PJM Interconnection, Midwest Independent System Operator, and ISO New England emerged in the late 1990s to manage an excess of conventional generation. Wind has grown exponentially since then and, today, renewables and demand-side efficiency that have no fuel costs are being dispatched in market-price depressing volumes that are eliminating incentives for base load generators to build new capacity.
FERC’s role in the implementation of EPA’s emissions reduction regulations will be limited, LaFleur said, because its job is not to be an environmental regulator but to oversee electricity markets, the bulk transmission system, and pipelines.
If the new EPA regulations drive an increase of renewables that threatens the reliability of the transmission system, or if they create the need for new natural gas pipelines, FERC could become involved, LaFleur said. FERC will not take up the question of natural gas lifecycle emissions because that is an environmental and not an infrastructure issue, she added.
FERC is also pushing for improved grid and pipeline cyber-security measures.
