[USA] Federal appeals court strikes down FERC approval of SEEM market

On July 14, 2023, the U.S. Court of Appeals for the District of Columbia Circuit ruled that Federal Energy Regulatory Commission (FERC) had unlawfully approved the Southeast Energy Exchange Market (SEEM)[1].[2] SEEM is a proposed trading platform for utilities in the Southeast covering 12 states that allows utilities in the region to make automated bilateral trades every 15 minutes using available transmission capacity. The trades are enabled by non-firm energy exchange transmission service (NFEETS).

In a split decision, the court ruled that FERC’s November 2021 decision approving SEEM’s transmission rules went against its open access requirements in Order 888, which aim to ensure transmission owners offer non-discriminatory access to their networks. The appeals court said that FERC failed to explain why the market should be allowed to exclude participants outside the region. The court remanded FERC’s 2021 decision approving the SEEM market. The court also directed FERC to revisit its decision approving SEEM and told the commission to consider an earlier appeal from clean energy companies and environmental groups that it had previously dismissed as untimely.

[1] SEEM members include Associated Electric Cooperative, Dalton Utilities, Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Florida, Duke Energy Progress, Georgia System Operations Corporation, Georgia Transmission Corporation, JEA, LG&E and KU Energy, MEAG Power, N.C. Municipal Power Agency No. 1, NCEMC, Oglethorpe Power Corp., PowerSouth, Santee Cooper, Seminole Electric Corporation, Southern Company, Tampa Electric Company and TVA.

[2] https://www.cadc.uscourts.gov/internet/opinions.nsf/0D7A85E32E0291DF852589EC0050747A/$file/22-1018-2007875.pdf

[USA] SPP releases details of a proposed Western energy market

On November 30, 2022, Southwest Power Pool (SPP), which serves all or parts of 14 states in the central U.S., published details of its proposed Markets+ service.[1] SPP has been working with Western stakeholders since December 2021 to sketch out a day-ahead and real-time market. The proposed bundle of services would centralize day-ahead and real-time unit commitment and dispatch, utilize hurdle-free transmission service across its footprint, and allow for the reliable integration of renewable generation. This set of services would build on SPP’s Western Energy Imbalance Services market, which began operating in 2021. The market will provide a voluntary, incremental opportunity for utilities that see value in these services but are not ready to be a member in a regional transmission organization (RTO).

SPP’s plan includes a two-phase development process for the Western market. During phase one, potential participants and stakeholders will commit to the market. SPP plans to begin reaching out to interested parties in December 2022, and any parties interested in joining must sign up by April 2023. Upon approval from the Federal Energy Regulatory Commission (FERC), SPP will launch the second phase, during which SPP will acquire necessary software and hardware while participating entities fully commit to fund and are integrated into the system.

[1] https://www.spp.org/newsroom/press-releases/southwest-power-pool-releases-detailed-proposal-for-western-energy-market/

[USA] Texas governor declares billing errors an emergency matter

On March 9, 2021, Governor of Texas, Greg Abbott (R), announced that the correction of billing errors is an emergency matter to be considered immediately by the Texas legislature.[1] The announcement comes after regulators at the Texas Public Utility Commission (PUC) declined on March 8, 2021 to direct the Electricity Reliability Council of Texas (ERCOT) to retroactively reprice its artificially inflated prices during the February 2021 cold weather event.[2] The commissioners expressed concern that there was too much uncertainty in how customers might be impacted by directing ERCOT to reverse its pricing. The decision goes against the recommendation of Potomac Economics, the region’s independent market monitor (IMM). According to the IMM, ERCOT should have immediately lowered prices after load shed instructions ended on February 17, 2021, but prices remained high through February 19, 2021 which cost the market $16 billion over the course of 32 hours. On March 8, 2021, Texas Lt. Gov. Dan Patrick called on the PUC to retroactively change the prices from that time period. On the same day, Texas PUC Commissioner Shelly Botkin resigned effective immediately. Her departure comes just a week after the resignation of Chair DeAnn Walker and leaves the commission with just one member left, Chair Arthur D’Andrea.

[1] https://www.utilitydive.com/news/texas-puc-loses-2nd-commissioner-as-lt-gov-presses-ercot-to-correct-16b/596378/

[2] https://www.utilitydive.com/news/texas-regulators-decline-to-act-after-market-monitor-reports-16b-of-inapp/596252/

[USA] Report: Southeast RTO could generate $384 billion in savings by 2040

According to a new report released by Vibrant Clean Energy on behalf of Energy Innovation on August 25, 2020, establishing a regional transmission organization (RTO), an electric power transmission system operator (TSO) that coordinates, controls, and monitors a multi-state electric grid, in the Southeast would generate a cumulative $384 billion in savings by 2040 compared to a business-as-usual scenario.[1] [2] The analysis follows confirmation by utilities like Southern Company and Duke Energy that there are ongoing discussions about forming a Southeast Energy Exchange Market (SEEM). The report did not model a SEEM-based scenario due to a lack of details. Instead, the study presents a scenario where an RTO is established in 2025 to cover seven states that are currently not covered by an RTO or independent system operator (ISO): Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee. The report maps the effects of a Southeastern RTO from 2025 through 2040.

Under this scenario, an RTO would save customers $17.4 billion a year and lead to the retirement of most coal plants and gas peakers in the region by 2040. The report also found that competitive pricing through an RTO would lead to decarbonization without state policies like carbon pricing and renewable energy mandates. On its current course, the region will about 21 GW of new renewables and storage by 2040. However, competitive pricing from a wholesale market could add 131 GW of clean energy: 52 GW solar, 42 GW wind and 37 GW storage.

[1] https://energyinnovation.org/wp-content/uploads/2020/08/Economic-And-Clean-Energy-Benefits-Of-Establishing-A-Southeast-U.S.-Competitive-Wholesale-Electricity-Market_FINAL.pdf

[2] https://energyinnovation.org/publication/economic-and-clean-energy-benefits-of-establishing-a-southeast-u-s-competitive-wholesale-electricity-market/

[Japan] Keidanren Released a Policy Recommendation Report on Rebuilding Japan’s Power System

On April, 2019, the Japan Business Federation, called Keidanren, released a policy recommendation report titled “Rebuilding Japan’s Power System—Electric Power Policy to Support a Super-Smart Society, Society 5.0.” The economic organization is comprised of 1,376 Japanese representative companies, 109 industrial associations, and 47 regional economic organizations as of May 31, 2018, and plays a central role in assisting corporate activities by making policy proposals and taking actions to contribute to the self-sustaining development of the Japanese economy. The report highlights the future direction of Japan’s electric power policy in electric power generation, transmission, and distribution systems, and attempts to address current challenges.

Japan faces four main challenges in its electric power sector, including a high dependence (more than 80%) on fossil fuel power generation; the unexpectedly slower penetration of renewable energy, which is hindering Japan from decreasing its high dependence on fossil fuels; difficulties in restarting its nuclear power reactors that have received approval for their safety standards, due to a strong public antinuclear movement; and a failure to significantly reduce electricity pricing even after the recent deregulation of the retail electricity market. Additionally, the uncertainty of the current domestic business environment is discouraging power utilities from committing to major investments in power infrastructure.

In order to achieve “Society 5.0”, the main priority for Japan’s electric power policy should be securing a balance of ‘Safety + Energy Security, Economy, and Environment (S+3E),’ in line with the pursuit of Decarbonization, Decentralization, and Digitalization (3D). It is necessary to promote electric power investment, and to advance the development and implementation of new technologies. To encourage further investments, Keidanren recommends that the government should develop its next basic energy plan by considering the different potential scenarios for the future power system after 2030.

[USA] “PJM Files Capacity Market Proposals on Generator Subsidies- Seeks to Protect Benefits of Competition While Accommodating States’ Policies”

[PJM, 9 April2018]

PJM has requested FERC to identify how the wholesale electricity capacity market should respond to state subsidies of energy generators. In their filing, PJM has included two proposed solutions: 1) PJM’s recommended solution, Capacity Repricing, would “create a two-stage capacity auction process to accommodate state subsidies without distorting market prices;” and the other proposal 2) MOPR-Ex, which (as the name implies) extends the Minimum Offer Price Rule (MOPR) to “require a subsidize generation resource to remove the effect of the subsidy” from its capacity market bid. PJM has requested FERC make a decision on its subsidized proposals by June 29. A decision by this date would see tariff changes implemented by January 2019 and thereby allow the chosen proposal to take effect by the May 2019 annual capacity auction.