States to FERC: Promote Market Designs That Recognize State Priorities

States to FERC: Promote Market Designs That Recognize State Priorities
Attorneys general from 11 states ramped up pressure on the Federal Energy Regulatory Commission (FERC) to recognize state policy goals as it makes decisions related to market design, siting of new gas pipelines and storage facilities, and grid reliability. The measure is the latest in a string of recent pushes by states to ensure federally...

Attorneys general from 11 states ramped up pressure on the Federal Energy Regulatory Commission (FERC) to recognize state policy goals as it makes decisions related to market design, siting of new gas pipelines and storage facilities, and grid reliability.

The measure is the latest in a string of recent pushes by states to ensure federally regulated regional transmission organizations (RTOs) and the competitive electric markets they operate will accommodate subsidized resources like renewable and nuclear power.

But they further complicate decisions at FERC, which has made clear its interest in maintaining the integrity of markets it regulates, ensuring prices are competitive and sufficient for new entry, and protecting markets from adverse impacts of oversupply.

States: Seeking High Prices Not ‘Just and Reasonable’ as Public Priorities Evolve

The attorneys general for California, Connecticut, District of Columbia, Delaware, Maryland, Massachusetts, Michigan, North Carolina, Oregon, Pennsylvania, and Rhode Island—states that fall within wholesale markets operated by PJM Interconnection, ISO-NE, and CAISO—told FERC’s three commissioners in an Oct. 28 letter that the federal regulator’s actions significantly affect state abilities to achieve clean energy and climate goals.

The letter specifically asks FERC to consider promoting market design choices that “appropriately recognize the states under the Federal Power Act to shape their resource mixes,” stressing, it is “not just and reasonable” to seek high prices to maintain competitiveness of power plants that are aging, uneconomic, or emit higher pollutants “by discriminating against state-supported cleaner technologies.”

The attorneys general also urged the commission to “eliminate barriers to competition” for renewable generators, energy storage, energy efficiency, demand response, and other technologies. As it evaluates new pipeline infrastructure, FERC should also “comprehensively assess the associated climate impacts” and clean energy alternatives. Finally, FERC should exercise its oversight authority to ensure RTOs and other entities are “fostering participation, transparency, independence, and responsiveness to states, consumers, and other stakeholders,” they said.

“Decisions made today will shape the electricity system for decades to come,” the attorneys general wrote. “Now, more than ever, it is essential for the states and the Commission to work together to ensure that the Commission’s actions advance, not impede, state policies and prerogatives.”

FERC’s Biggest Challenge: A Fine Balance

The letter from the states’ top legal officers is noteworthy because it indicates states will defend their energy rights against the responsibility to regulate interstate transmission and wholesale sales of power granted to the federal agency by the Federal Power Act (FPA).

Source: eba.inloop.com