Organized power market in West expected in coming years: FERC chairman

Progress has taken shape in recent years to create an organized market in the Western US, but many believe the process is moving too slowly, Federal Energy Regulatory Commission Chairman Richard Glick said May 17 at the American Clean Power Association's CLEANPOWER 2022 conference.

There are two US regions without organized markets -- the West outside of the California Independent System Operator and the Southeast. Organized markets benefit consumers as well as clean energy development, Glick said about broader markets being cost effective to integrate intermittent generation such as wind and solar.

"I strongly believe there will be some sort of organized market in the West in the coming years," Glick said.

Western markets

The CAISO Board of Governors and Western Energy Imbalance Market Governing Body approved measures Aug. 20 that broaden shared governance between the two entities, including joint authority, which many believe paves the way for a western regional transmission organization.

"Some of us are eager to get to the end phase of an RTO in the West," Rebecca Wagner, WEIM Governance Review Committee member and an independent consultant, said during an August meeting about how joint authority is the right track to achieve this. "I'm very pleased with this evolution."

CAISO and the Southwest Power Pool have been jockeying to offer energy imbalance services across the Western US. The WEIM launched in 2014 to find and deliver the lowest-cost energy to its members, while enhancing reliability and reducing emissions.

WEIM now has 19 participants serving 77% of the demand for electricity in the Western US after the Bonneville Power Administration and Tucson Electric Power became participants earlier in May.

Glick addressed several other topics during a sit-down session with ACP CEO Heather Zichal at the conference's opening session.

"This is a critical year," Zichal said. "This is the moment we need to get across the finish line. ... We don't have the time to waste to meet the challenges of climate change."

Transmission reform

The chairman acknowledged the need for the US to modernize its electric transmission system to better accommodate clean energy sources.

"We are blessed with the world's best renewables," Glick said, but he added that those resources are located remotely so there is a need to build out the transmission system, which means transmission planning needs to be more anticipatory.

FERC recently approved a draft proposed rule that aims to help with long-range electric transmission planning and cost allocation, two major impediments to grid buildout (RM21-17).

Notably, FERC's proposal did not include provisions to address to significant backlog of generator interconnection projects, largely renewable energy projects, in regional grid operators' queues across the nation. Members of a joint federal-state transmission taskforce recently said that addressing this backlog will require improved long-range planning. Glick has said the commission is working on potential solutions and may tackle the interconnection issue in future proposals.

Projects in generation interconnection queues need to be significantly expedited, Glick said May 17, adding that cost allocation is another major topic to address.

"We need a much better approach to address participant funding," Glick said.

States need a much larger role in transmission cost allocation and not to be brought in at the back end, Glick said about over 95% of transmission lines cited at the state level. There needs to be more work with the states to avoid delays.

Hydrogen development

There has been a lot of interest in hydrogen development, which is promising since hydrogen can help electrify the economy, Glick said.

"We're trying to figure out what this all means," Glick said about hydrogen development and FERC's jurisdiction over pipelines.

FERC is seeking guidance from Congress, Glick said.