By Mike Jacobs

Replacing the fossil-fueled energy supply with renewable energy requires unusual focus and substantial investment in the electricity sector. Our ability to meet these needs — elevated by climate change and the COVID-19 crisis — depends on the success of RTOs and ISOs. We at the Union of Concerned Scientists work to make these institutions more transparent, understood and responsive to science and democratically established laws.

The RTOs/ISOs evolved over decades and matured in the 1990s through a combination of electric utility industry and government regulatory desire for cooperation and efficiency. Coordination in the utility industry through competition and innovation becomes harder when the RTOs/ISOs ignore the public interest in further decarbonizing energy. The conflict between an energy market system that ignores external costs and a society and its policymakers that see the health and climate impacts of pollution from energy can’t be ignored.

These organizations have demonstrated they can deliver savings and integration of high levels of renewables.

Utilities are Different

The difference between RTOs/ISOs and better known trading platforms, such as Lyft, Uber, eBay and Amazon, is that the grid operators were established by existing monopolies. But those monopolies did not anticipate renewable energy growth driven by policy, economics or carbon limits. The influence of the incumbent players in making the rules is not found in the better known platforms. How much do the existing asset owners influence new energy technologies in the market? We can take a look at how open, transparent and interested in emissions these grid operators are.

We Have Work to Do

The RTOs/ISOs are at varied and different places on transparency and consideration of climate impacts. Broadly, the RTOs/ISOs provide regional coordination and sharing reserves through power pools that benefit consumers, allow competition and further cost savings and technology innovation. But how well does this structure, set up with advantages for the owners of existing power plants, serve to protect the climate and implement state carbon-reduction policies? When policymakers push the external costs of carbon and health into decisions that can lower carbon emissions, RTOs/ISOs should not counteract those policies and raise costs to consumers.

Transparent and Open?

Transparency builds trust. Stakeholders have to know how decisions are influenced. The public needs to know what decisions are being made.

How well members, stakeholders or even the public follow the decision-making depends in large part on the posting of meetings scheduled, agendas and the minutes of what was discussed. UCS was quick to support press access to NEPOOL when access was denied. But a wider look at the mere posting of meeting dates and agendas for the RTOs/ISOs’ governing boards differ sharply from one regional grid to the next.

In PJM, there is no schedule of board meetings available and no minutes, leaving stakeholders unsure of discussions or changes to items on which members had voted. The ISO-NE board’s meeting dates and bare agenda are available, but minutes are not. At NYISO, board meetings can be open to regulators upon request, and minutes and future dates are published. MISO mails out notices of board meetings, and even the committees of the board hold open meetings. SPP posts meeting notices and extensive minutes and materials. CAISO holds open meetings with video recordings posted on YouTube!

Carbon-aware?

The RTOs/ISOs operate in parallel (and lately in conflict) with state laws that regulate utilities and provide consumer protections, as well as with health and safety protections that address environmental externalities. The New England States Committee on Electricity’s recent vision for the grid connected the lack of transparency in stakeholder and ISO-NE board processes with the need for market reforms suited to “the New England states’ legal requirements, policy imperatives and associated consumer interests.”

There is a wide range in how the RTOs/ISOs keep informed and share data about emissions from power plants. Ten to 15 years ago, some ISOs developed a report of average marginal emissions for the evaluation of pollution savings from state energy-efficiency programs. Today, climate change driven by accumulated greenhouse gas is a bigger concern. Reporting totals of emissions over a year and by month or season will help decision-makers facing a wider variety of options to change fossil fuel use and cumulative emissions.

NYISO established an Environmental Advisory Council in 2004 that provides it with reports that include average marginal emission rates from its generation, as well as the cumulative CO2 emissions in New York from all sectors (drawing data from the U.S. Energy Information Administration). PJM reports only the average marginal rate of emissions, released each spring, and it is impossible to determine if this report is shared with the RTO’s board because there is no transparency. ISO-NE has, since 1993, made a similar annual report of marginal rates of emissions, though with an 18-month delay from the end of the year. CAISO makes monthly reports of emissions. SPP makes none.

Changed Energy Mix

Reporting on the energy mix is another measure of improvement on climate-harming emissions. SPP does post data showing enormous use of wind energy. In the spring and fall, SPP’s energy supply mix is routinely as high as 50% wind. All the other RTOs/ISOs also display their current energy mixes on their websites. These kind of data on the resources meeting electricity demand are fundamental to the RTO/ISO function. Such displaying and archiving of energy data is a minimal level of transparency not found from utilities outside the RTOs/ISOs.

The accumulation of CO2 in the atmosphere comes from the cumulative emissions from combustion (and other biological sources). A decent comparison and metric for RTO/ISO boards to monitor would show total greenhouse gas emissions from power plant operations, along with the sort of data EIA provides on fuel-burning emissions in other sectors of the economy in their regions. That reporting would allow RTO/ISO boards to monitor changes as members and utilities pursue electrification and electricity replaces fossil fuel in building and transportation. RTO/ISO boards should receive a report annually on how the grids they manage are affecting the climate.

What We Need from RTOs

Regional cooperation to meet energy demand requires transparency and openness now, as the public, leaders and utility industry members meet the challenge of climate change and decarbonize energy. Leaders of all these organizations need metrics reflecting their own operations and markets, both for daily business and for addressing climate-damaging emissions of carbon and methane.

People in government need the informed cooperation of citizens and corporations to implement policy on climate. With all the decision-making ahead, the RTOs/ISOs are going to be key for people, their polices and utilities to work together in new ways to move off climate-damaging fuels.

The New England states are asking for change from their RTO. The Mid-Atlantic states are in court over their RTO’s objection to renewable energy policy. We have to decide: Are these organizations up to the task?

Mike Jacobs is a senior energy analyst for the Union of Concerned Scientists with expertise in electricity markets, transmission and renewables integration work.