FERC sets carbon pricing and offshore wind tech conferences

U.S. federal electricity regulators have scheduled technical conferences for this autumn to discuss issues related to two major policy initiatives: carbon pricing in organized wholesale electricity markets, and offshore wind integration in regional transmission organizations and independent system operators (RTOs/ISOs). The Federal Energy Regulatory Commission's scheduling of two technical conferences on these topics signals its interest in exploring the interplay between state energy and environmental policies and federally jurisdictional markets.

One technical conference regarding Carbon Pricing in Organized Wholesale Electricity Markets (Docket No. AD20-14-000) will be held on September 30, 2020, "to discuss considerations related to state adoption of mechanisms to price carbon dioxide emissions, commonly referred to as carbon pricing, in regions with Commission-jurisdictional organized wholesale electricity markets." The case has its genesis in a request for such an event, filed on April 13, 2020, by a broad coalition including Advanced Energy Economy, the American Council on Renewable Energy, the American Wind Energy Association, Brookfield Renewable, Calpine Corporation, Competitive Power Ventures, Inc., the Electric Power Supply Association, the Independent Power Producers of New York, Inc., LS Power Associates, L.P., the Natural Gas Supply Association, NextEra Energy, Inc., PJM Power Providers Group, R Street Institute, and Vistra Energy Corp. A number of other utilities, RTOs, and state interests also expressed support, prior to the Commission's issuance of a public notice on June 17 scheduling the event.

Another technical conference regarding Offshore Wind Integration in RTOs/ISOs (Docket No. AD20-18-000), to be held October 27, 2020, will be convened "to discuss whether existing Commission transmission, interconnection, and merchant transmission facility frameworks in RTOs/ISOs can accommodate anticipated growth in offshore wind generation in an efficient and effective manner that safeguards open access transmission principles and to consider possible changes or improvements to the current framework should they be needed to accommodate such growth."

Beyond the fact that the Commission issued notices of both technical conferences on June 17, 2020, the proceedings also share a common focus on the effects of state energy and environmental policies on federally-jurisdictional activities. For now, the prevailing carbon pricing mechanisms -- such as the Regional Greenhouse Gas Initiative adopted by many northeastern states -- and the strongest policies favoring or requiring offshore wind development are arising as a matter of state law and policy, as opposed to federal law.

The boundaries between federal and state jurisdiction are viewed by many as long-settled, although a series of federal court and agency decisions have found specific state electricity procurement and subsidy laws to be preempted by federal regulation, and a case pending before the Commission asks it to find that most state net metering programs are preempted by federal law. Whether the Commission grants or denies the pending request, the June 17 notices of technical conferences on carbon pricing and offshore wind integration suggest continued federal interest in exploring the implications of state policies on FERC-jurisdictional markets.