By Rich Heidorn Jr.
WASHINGTON — Acting FERC Chairman Cheryl LaFleur said Tuesday that the commission will schedule a staff-led technical conference on how wholesale power markets can accommodate state policymakers’ initiatives to support generation.
Speaking to the winter meeting of the National Association of Regulatory Utility Commissioners, LaFleur noted that the commission has pending complaints challenging the zero-emission credit programs created by Illinois and New York to prevent their nuclear plants from retiring. The cases cannot be resolved until the commission regains the quorum it lost with the Feb. 3 resignation of former Chairman Norman Bay.
“We have several cases pending that raise those issues. While we can’t issue orders in those cases, one thing that [Commissioner] Colette [Honorable] and I have talked about that we can do is to organize a staff-led technical conference to bring people in before us, build a record and hear from the states, from the environmental community, from others — from the generators and the ISOs — to try and discuss some of those issues. So that’s something we are going to do.”
LaFleur noted that ISO-NE and PJM made changes to their capacity markets “to try to make sure that they were properly rewarding the resources you could always count on to be there when most needed,” a reference to the Pay-for-Performance program in ISO-NE and Capacity Performance in PJM.
“What the markets do not currently do is compensate nuclear resources for their carbon-free attributes. The markets weren’t designed to do that and that’s something the state programs are seeking to do,” she said.
“I think we only have three choices here: One is for the stakeholders and the ISOs in part to somehow have a design solution that retains the benefits of the competitive markets for customers but in a way that adapts to some of these state issues. That’s door one.
“Door two is we can litigate it out. I loved winning the [Order 745] case in the Supreme Court, but litigation is never my first choice for how to resolve things.
“And door three is some kind of gradual reregulation. … If the states want to reregulate, that’s fine, but I’m concerned that we’ll have unplanned reregulation as the markets just get cannibalized and we lose some of the reliability benefits for customers.
“So door one — making a decision to work this out and adapt the markets — is by far the best solution, and we’ll need the help of all the smart people in this room to do that.”
NARUC President and Pennsylvania Public Utility Commissioner Robert Powelson said he welcomed the conference and also praised PJM CEO Andy Ott for “step[ping] up on this issue.”
PJM is expected to issue a white paper in March on the subject.
