FERC to hold session on state policies, wholesale markets

U.S. energy regulators have scheduled a two-day technical conference to consider how state energy policies affect wholesale electricity markets.

In a March 3 notice of technical conference, the Federal Energy Regulatory Commission gave public notice that it will hold a technical conference on May 1 and 2, 2017.  The notice describes tensions between competitive wholesale energy and capacity markets and state policies.  On the one hand, the Commission noted, "Competitive wholesale energy and capacity markets bring value to customers by efficiently pricing energy and capacity , taking into account the operational needs and the dynamics of the transmission system , and providing transparent signals for investment and retirement of resources."  Generally speaking, these wholesale competitive markets currently select resources based on principles of operational and economic efficiency without specific regard to resource type

But on the other hand, the Commission notes recent increases in "interest by state policy makers to pursue policies that prioritize certain resources or resource attributes" (such as renewable resources, or in-state resources).  That has led to what the Commission calls an "open question": "how the competitive wholesale markets, particularly in states or regions that restructured their retail electricity service, can select resources of interest to state policy makers while preserving the benefits of regional markets and economic resource selection." These topics have come up in discussions relating to several eastern regional transmission organizations and independent system operators, such as the IMAPP process in New England, and similar efforts in PJM and NYISO to consider the integration of public policy into markets.

To foster further FERC-level discussion about the development of regional solutions that "reconcile the competitive market framework with the increasing interest by states to support particular resources or resource attributes," the Commission has scheduled the May 1-2 technical conference. The notice specifically references a range in potential long-term expectations regarding the relative roles of wholesale markets and state policies in shaping the resource mix -- ranging from no state role on the one end, to state authority over resource selection that must be accounted for in wholesale market design -- and a variety of potential solutions in between.

Anyone who wishes to participate in the conference may submit a nomination form to FERC online by 5:00 p.m. on March 17, 2017.