FERC will consider reconciling state policy goals with market designs for RTO energy and capacity markets, and scheduled an initial technical conference for May 1-2.

"Because the wholesale competitive markets, as currently designed, select resources based on principles of operational and economic efficiency without specific regard to resource type, there is an open question of 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," FERC said in a notice announcing the conference

FERC noted stakeholder discussions concerning the issues within various RTOs

"These discussions have generally recognized that alternative market designs could take the form of changes to either the capacity or energy markets. Proposals to change the wholesale energy market have generally focused on valuing various resource attributes, including the value of fuel security or certain environmental costs associated with the production of electric energy. By comparison, proposals to change the capacity market have generally focused on ways to preserve the integrity of the capacity market, while also allowing customers to receive resource adequacy benefits from state supported resources in the capacity market," FERC said in its notice

"Commission staff takes this opportunity to foster further discussion regarding the development of regional solutions in the Eastern RTOs/ISOs that reconcile the competitive market framework with the increasing interest by states to support particular resources or resource attributes. In particular, Commission staff seeks to discuss long-term expectations regarding the relative roles of wholesale markets and state policies in the Eastern RTOs/ISOs in shaping the quantity and composition of resources needed to cost-effectively meet future reliability and operational needs," FERC said in its notice

"At one end of the spectrum, state policies would be satisfied through the wholesale energy and capacity markets. At the other end of the spectrum, state policies would be achieved outside of the wholesale markets, and the wholesale markets would be designed to avoid conflict with those state policies. There are numerous alternatives between these two ends of the spectrum. As part of this discussion, Commission staff seeks to understand the pros and cons of the various alternatives in the Eastern RTOs/ISOs. In the end, Commission staff seeks to understand the potential for sustainable wholesale market designs that both preserve the benefits of regional markets and respect state policies," FERC said in its notice

Tags:
FERC   Wholesale   Capacity Market   RTOs  

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