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Enviro Advocates Balk at Federal Law Allowing New Energy Market

Energy advocates have taken issue with a default ruling from a divided Federal Energy Regulatory Commission (FERC) that allows a new energy market to move forward without a clear consensus from the watchdog group.

arrow 306811 640 smallAs such, the Southern Environmental Law Center (SELC), on behalf of groups like the Sierra Club, Energy Alabama and the Southern Alliance for Clean Energy, took issue with the ruling, which was made possible partially due to fact that FERC’s fifth, tie-breaking commissioner is pending congressional approval. With a two-two tie, the proposal for the market moves forward automatically, per federal law.

SELC Attorney Maia Hutt enumerated the environmental group’s contempt for the lack of consensus from the remaining four commissioners to approve the proposed Southeast Energy Exchange Market (SEEM).

“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,” Hutt said in a statement. According to the SEEM coalition, the initiative was born from a group of energy companies planning an “integrated, automated intra-hour energy exchange with goals of lowering costs to customers, optimizing renewable energy resources.” In practice, the SEEM is supposed to create a 15-minute energy exchange rooted in technology to match participants with reliable, clean energy.

“Benefits include cost savings for customers and better integration of diverse generation resources, including rapidly growing renewables and fewer solar curtailments,” according to SEEM promotional material. “Importantly, SEEM members would maintain existing control of generation and transmission assets, and participation is voluntary.”

From Twitter

Advanced Energy Economy @AEEnet

"'@FERC missed an opportunity to ensure that SEEM is a stepping stone to a competitive wholesale electricity market that delivers substantial benefits to consumers,' @EnergyLawJeff. See what’s next for broader wholesale market reforms. #EnergyTwitter"

The SELC called into question how this market will work in practice, though, and as such has called on the commission to ensure customer interests are not sacrificed in lieu of the energy providers.

“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,” Hutt added.

The law center challenged the SEEM based on questions related to price, transparency, oversight and market power, which were investigated by the regulatory commission.

Recently, FERC Chairman Richard Glick spoke before the Senate Energy and Natural Resources Committee regarding the agency’s role in U.S. energy markets.

Glick outlined the commission’s five main areas of priority, which include “building the transmission grid of the future; modernizing electricity market design; updating FERC’s natural gas certificate Policy Statement; safeguarding the reliability of the electric grid; and facilitating a more inclusive decision-making process.”

“The Commission’s job is not to pick winners and losers,” Glick said. “But we do have a role in eliminating barriers to a technology’s participation in wholesale markets."

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