FERC on Wednesday announced it will hold two technical conferences later this year: one to examine carbon pricing in the wholesale electricity markets and another to consider its transmission policies in relation to the growth of offshore wind.
The first conference, to be held Sept. 30 and led by the commissioners themselves, is in response to a petition and subsequent supportive comments earlier this year from a diverse array of stakeholders, including independent power producers, environmentalists and renewable energy trade associations. (See IPPs, Renewable Groups Seek FERC Carbon Pricing Conference.)
“When such a broad group of voices asks the commission to convene an exchange of ideas, I think it is important that we do so,” Chairman Neil Chatterjee said during the commission’s monthly open meeting Thursday.
The main topic will be whether FERC even has the legal authority to regulate prices on carbon in regions with commission-jurisdictional markets, Chatterjee told reporters during a teleconference after the meeting. He noted that the petitioners merely asked FERC to “start the conversation” and not for the commission to create a specific rule. “I’m not going to prejudge where the conversation will lead , but I do think it’s significant we’re having this conversation,” he said.
The announcement was celebrated by the groups that submitted the original petition, including the Electric Power Supply Association, American Council on Renewable Energy and R Street Institute.
“Very happy to see this and appreciate FERC’s leadership in convening this conversation,” tweeted Jeff Dennis, general counsel for Advanced Energy Economy and a former commission staffer. “I led the development of a few of these conferences in my time and recognize that they are not simple endeavors and require a great deal of staff and commissioner time.”
However, Justin Gundlach, a senior attorney for the New York University School of Law’s Institute for Policy Integrity, warned stakeholders not to “get too excited,” noting that the commission’s language in its announcement meant that the conference “is not going to be about RTOs or other federal entities adopting a carbon price.”
“The purpose of this conference is 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,” FERC said (AD20-14).
“I didn’t have a role in the drafting of the press release issued yesterday, but [Gundlach’s interpretation] wasn’t my understanding,” Commissioner Richard Glick told RTO Insider. A FERC spokesperson noted that the commission is still working on a detailed agenda for the conference.
The second conference announced Wednesday will be held Oct. 27 and will be led by staff. Participants will “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 “consider possible changes or improvements to the current framework should they be needed to accommodate such growth” (AD20-18).
Asked by reporters what prompted this conference, Chatterjee said that “the time is ripe to start a dialogue” given the expected growth of offshore wind resources. There are about 26 GW worth of projects going through the federal permitting process, and states have collectively established procurement targets of more than 28 GW, according to the American Wind Energy Association.
Chatterjee was also asked whether the conference will address concerns that offshore wind will be priced out of PJM’s capacity market because of the commission’s expansion of the RTO’s minimum offer price rule. He did not directly answer the question, noting that the commission was still working on an agenda but stressed, as he has “time and time again,” that the commission’s “efforts to protect markets are fuel-neutral.”
