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Posted at 4:46 p.m. on Sept. 4, 2014
The Federal Energy Regulatory Commission will evaluate making changes to competitive markets in cases over the next several months, Chairwoman Cheryl LaFleur said Thursday.
“I see that as one of the biggest priorities we have right now,” she said at an event hosted by the Center for Strategic and International Studies.
In the decades that competitive markets have been implemented after privatization, they have spread to serve almost two thirds of consumers.
“For the most part they have done those things they were designed to do superbly,” LaFleur said, but “now we’re in a different time.”
She sees FERC’s role as maintaining reliability as many power plants near retirement age, state and federal environmental regulations add constraints, and as renewables and distributed generation come into the power mix and providers face downward pressure on energy prices – no easy task given the complexity of different markets spanning various states with competing and diverse needs.
“We have a very messy ecosystem to work in,” LaFleur said. “These are not easy topics at all.”
She thinks it unlikely that Congress will wade into reshaping the markets, a move discouraged by one of her predecessors, Elizabeth Moler, who also spoke at the conference and said Congress did not have the faculties to handle the complexities of energy market overhaul.
“Their engagement would not be productive,” Moler said, and she doesn’t expect any sweeping energy market legislation in the next decades. “It ain’t going to happen,” she said. “Congress isn’t going to regulate productively anytime soon.” Moler formerly was a vice president and lobbyist for electric utility corporation Excelon.
Without Congress’s involvement, it will be up to FERC to figure out changes as best it can, LaFleur said.
Given the regional makeup of markets, the state-specific carbon dioxide emissions regulations that the EPA proposed in June could have “potentially considerable implications for the operation for the markets as the states make all their implementation decisions,” she said, adding that EPA’s acknowledgement of regional coordination may help resolve that issue.
“To the extent that states can do things regionally, that will help make this problem easier,” she said.