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S&P Global: Biden Order Could Prompt FERC to Act on Utility-Sector Competition, Experts Say

Posted by Zack Hale on Jul 12, 2021

S&P Global summarized the potential effects of Biden’s executive order making regulations from federal agencies like FERC more competitive, quoting AEE’s Jeff Dennis. Read snippets below and the full article here.

A new executive order issued by U.S. President Joe Biden could serve as an impetus for the Federal Energy Regulatory Commission to crack down on anti-competitive behavior while encouraging more wholesale power market expansion, according to industry experts.

The order, issued late July 9, aims to establish a "whole-of-government" approach to "address overconcentration, monopolization, and unfair competition in the American economy." It directs federal agencies, including FERC, to adopt pro-competitive regulations and rescind rules that "create unnecessary barriers to entry that stifle competition."

Approximately two-thirds of U.S. electricity consumers are now served by FERC-jurisdictional regional transmission organizations and independent system operators, which were formed in the late 1990s and early 2000s to coordinate least-cost generation dispatch and transmission planning.

"It has been many years since the commission examined competition in non-RTO regions to consider whether barriers to entry in those markets are similarly leading to potentially unjust and unreasonable rates or undue discrimination," Jeff Dennis, managing director and general counsel for the business group Advanced Energy Economy, said in an email. "With renewed interest from consumers and policymakers in using competitive markets to empower customers and enhance reliability while achieving clean energy objectives, FERC may want to use ... the executive order as an opportunity to look more closely at outcomes in non-RTO regions."

FERC is also set to release a long-awaited proposed rule this week on transmission planning and cost allocation where the agency will open a public docket and seek comments from industry stakeholders. Various studies have estimated the U.S. will need to double or even triple its electric transmission capacity to decarbonize its economy by midcentury, but transmission planning and cost allocation issues present major obstacles to doing so.

Read the full article here.

Topics: AEE In The News