Divided federal regulators allow new energy market to go into effect
WASHINGTON, D.C. — Today a divided Federal Energy Regulatory Commission (FERC) failed to reach a consensus on a proposal by Southern utilities to create a new energy trading platform, resulting in the proposal taking effect by default according to federal law.
Several utilities in the US Southeast filed a proposal in February with FERC to create the Southeast Energy Exchange Market (SEEM), a proposal that was challenged by SELC representing several public interest organizations throughout the region. In May and August, FERC found that it could not make a decision on the proposal and requested additional information from the utilities, citing questions on price impacts, market power, transparency, and independent oversight.
The Commission was required to issue an order approving or denying the proposal by October 12, 2021. This morning, a day after the deadline, FERC issued a notice stating that “the Commissioners are divided two against two as to the lawfulness of the change.” President Biden’s nominee to fill the fifth spot on the Commission has not yet been confirmed by Congress. In the absence of an order from FERC, the proposal automatically goes into effect.
In response to FERC’s notice, SELC Attorney Maia Hutt released the following statement:
“The failure of some of the largest monopoly utilities in the country to convince a majority of commissioners that SEEM is legal is yet another reason why it cannot be the last step towards wholesale market reform in the Southeast. The Commission must pave the way for meaningful reform that lowers customer bills, increases transparency, and helps our region transition away from dirty fossil fuels to cost-effective renewable generation. We look forward to conversations with stakeholders across the spectrum to ensure this happens.”
In the region the proposed energy market would cover, nearly five million households face a high or severe energy burden. As calls have increased for robust wholesale market and utility reform—and some states have initiated processes to do so—the utilities put forth their own, much more limited SEEM proposal. Over the last year, SELC and its partners have urged FERC to critically evaluate the proposal and ensure that the proposed market does not benefit monopoly utilities at the cost of communities and the environment in the Southeast.
SELC opposed the SEEM proposal on behalf of Energy Alabama, Sierra Club, South Carolina Coastal Conservation League, GASP, Southern Alliance for Clean Energy, Southface Energy Institute, Inc., Vote Solar, Georgia Interfaith Power and Light, Georgia Conservation Voters, and Partnership for Southern Equity.