Duke Energy Corp. and Southern Co. have confirmed the companies are in early discussions with other Southeast utilities on the creation of a regional energy market.
Charlotte, N.C.,-headquartered Duke Energy and Atlanta-headquartered Southern confirmed to Utility Dive that they were in talks with other electric utilities exploring a centralized, automated energy imbalance market known as the Southeast Energy Exchange Market, or SEEM. The details of the market were unveiled during a July 13 stakeholder meeting on the North Carolina Clean Energy Plan.
"While we're still early in the learning phase, we're eager to see the kind of benefits a regional energy market might have for our customers, particularly if it helps improve how we can jointly operate growing solar resources on our systems," Duke Energy spokesperson Erin Culbert told S&P Global Market Intelligence.
"Several stakeholders in the Carolinas have expressed interest in an energy market, so when we were approached with the concept, we thought it was a good opportunity to dig in and understand more so we could take it back to regulators and stakeholders for feedback," Culbert said in a July 14 email. "Said another way, we view this evaluation as a response to the stakeholder interest we've been hearing for a few years on a potential energy market so we can advance these concepts and see if they make sense."
The voluntary, 15-minute energy wholesale market "would use technology and advanced market systems to find low-cost, clean and safe energy to serve customers across a wide geographic area," Southern spokesman Schuyler Baehman told S&P Global Market Intelligence.
Baehman said the goals of the "intra-hour energy exchange" include "lowering costs to customers, optimizing new renewable energy resources, and improving reliability."
"It would allow participants to buy and sell power close to the time electricity is consumed and would give system operators real-time visibility across neighboring electric grids," Culbert said.
Culbert also noted that the potential regional energy market is not a regional transmission organization and does not prevent any of the participants from forming or joining an RTO.
"While the market would share the same principles as an [energy imbalance market, or EIM] ... it's not as granular or costly to set up as an EIM like the Western EIM," Culbert said.
The companies pointed out that "no decisions have been made yet" on the formation of the regional energy market, which would require the appropriate filings with the Federal Energy Regulatory Commission if plans proceed.
The Tennessee Valley Authority also confirmed that it has been involved in discussions about the market's creation.
"TVA is always working to drive more value for our customers. We continually evaluate ways to lower costs, enhance reliability and deliver cleaner energy," TVA spokesman Jim Hopson said. "If we determine that partnering with our neighbors makes sense, we'll certainly take the appropriate steps to describe that more fully for the 10 million people we serve."
Jennifer Chen, senior counsel, federal energy policy for Duke University's Nicholas Institute for Environmental Policy Solutions, said such a market has "the potential to better integrate renewables cost-efficiently."
"The importance for renewables and expanding the footprint over which you're balancing energy is the integration costs," Chen said in a July 14 phone interview. "So you're avoiding curtailments for renewables and you don't have to procure as much backup."
"The success of an energy imbalance market will really depend on how much the utilities contribute in terms of transmission capacity as well as what they're selling and buying on the energy imbalance market," Chen said.
She added that the two existing and historical energy imbalance markets "are run by entities that are independent of their utility members," the Southwest Power Pool and the California ISO.
"Having an independent entity run the platform helps to ensure fairness and transparency," she said.
The Southern Environmental Law Center, meanwhile, released a statement criticizing the "closed door negotiations" behind SEEM.
"The South's power sector — dominated by large monopolies with not enough accountability or competition — is in need of significant change," Law center senior attorney Frank Rambo said in a written statement. "A fully open wholesale electricity market could produce the efficiencies and competition that would result in cleaner energy and lower power bills, but a plan hatched in secret by the monopoly utilities that have most benefited from the status quo is not a promising vehicle to deliver that kind of change."
Dominion Energy Inc. subsidiary Dominion Energy South Carolina Inc.; Oglethorpe Power Corp.; PPL Corp. subsidiary LG&E and KU Energy LLC; and South Carolina government-owned utility Santee Cooper, known legally as South Carolina Public Service Authority, along with several electric cooperatives in the Southeast, are part of the group evaluating SEEM, according to Duke Energy.