By Michael Brooks

WASHINGTON — Several members of the House Energy and Commerce Committee’s Subcommittee on Energy on Wednesday urged FERC commissioners to holistically review RTO and ISO governance rules, while also pressing them on when to expect decisions on languishing dockets — including PJM’s capacity market proposal.

The commissioners did not tell the subcommittee anything they haven’t said before in open commission meetings or keynote industry speeches. And because the dockets are still pending before them, they could neither go into specifics nor estimate when any decisions would be forthcoming.

But House members gave RTO issues considerable airplay in an oversight hearing that ran the gamut: the commission’s role, if any, in mitigating climate change; landowner complaints over natural gas pipeline siting; and energy storage participation in wholesale electricity markets, to name a few.

Rep. Michael F. Doyle (D-Pa.) scolded FERC for creating uncertainty in PJM, where the Board of Managers decided to move ahead with the RTO’s annual Base Residual Auction this year (albeit in August, instead of May) despite the commission finding its capacity market rules unjust and unreasonable — running the risk that FERC could force it to rerun the entire thing later. (See PJM to Hold Capacity Auction in August.)

Doyle noted PJM filed its revised rules in October, “so either a rule is going to be published right before August, which won’t give participants enough time to adjust, or a decision will not be published, and participants will have to take part in an auction under rules that FERC has found to be unjust and unreasonable.”

Chairman Neil Chatterjee assured Doyle that “we’re working as diligently as we can.”

“This is a vexing challenge,” Chatterjee said, “because you have a situation where two things I think we all believe in — states’ rights and the markets — are colliding. … We’re coming to a point where actions that states are taking to make decisions about their local energy futures are impacting the markets and trying to figure out how to sort through that while ensuring just and reasonable rates has proven to be very, very challenging.”

“I am deeply, deeply troubled by the delay,” Commissioner Cheryl LaFleur said. “I had dissented in the initial order because I thought it would put PJM in an impossible situation, and I’m afraid that’s exactly what’s come to pass. I’ve been using my world-class powers of nagging to be a nag about it, but so far we have not gotten an order out.”

“I’m not sure how the auction can go forward without some clarity from FERC,” Commissioner Richard Glick said.

Speaking to reporters after the hearing, Glick said, “We should be working on this 24/7 because we owe it to [PJM] to provide some more certainty.”

Rep. Frank Pallone (D-N.J.), chair of the full committee, called for “greater scrutiny of wholesale capacity markets. Frankly, the current state of affairs is a mess, especially in the PJM market, where New Jersey participates. PJM participants are currently left in the lurch of both an old and new capacity market design. … It is vital that we figure this out immediately.”

Subcommittee Chair Bobby Rush (D-Ill.) expressed concern that “consumer voices are often overlooked, ignored or cut out of the RTO process entirely.” Pallone also noted “there has not been a comprehensive review by FERC of each RTO’s stakeholder process to ensure compliance with the requirements of Order 719,” issued in 2008.

“This is something we continually hear from people around the country,” Chatterjee replied. Reviewing Order 719 compliance “is one option, but looking with an eye towards ensuring consumers’ voices are heard as they come up through the process is another manner in which to do this. I think particularly as new technologies come into play and we look to break down barriers to entry, we need to ensure these new voices have an opportunity to be heard at the RTOs and ISOs.”

LaFleur agreed that “it’s probably a good time for a relook.”

Call for Transparency

Rep. Joe Kennedy III (D-Mass.) said he was “increasingly concerned about the [RTOs] and their governing structures.”

“My fellow citizens and I have no idea who makes decisions or how they are made at [the New England Power Pool] because unless you are a member, you can’t even observe any meetings or proceedings, let alone talk about it publicly. Other RTOs benefit from governance structures that enjoy slightly more transparency. Still, I believe more has to be done.” He asked LaFleur if the public should have more access, “even as a passive observer.”

LaFleur noted a pending request for rehearing on press access to RTO meetings before she began to point to consumer advocates’ participation in RTOs. Kennedy interrupted her, but LaFleur said she could not comment on the press issue.

FERC in April dismissed RTO Insider’s complaint seeking rejection of rules proposed by NEPOOL to keep reporters from publishing what is discussed at the group’s meetings. Consumer advocacy group Public Citizen filed a request for rehearing last month (EL18-196). FERC issued a tolling order June 7, giving itself more time to consider the request. (See FERC Rejects RTO Insider Bid to Open NEPOOL.)

Glick jumped in. He also said he could not comment specifically on the rehearing request, but he explained that FERC rejected the complaint because it lacked jurisdiction, as press access does not affect NEPOOL’s wholesale rates. But he said, “I agree with you, congressman, that transparency is a very important element of appropriate RTO functioning.”

Kennedy then asked Chatterjee if the commission has considered reforms to RTO governance to ensure the public is better represented.

The chairman replied, “I agree with the concerns that you’re raising,” but “I’m not sure a one-size-fits-all approach could work here.”