A planned energy exchange market in the U.S. Southeast became effective by operation of law Oct. 12 after a deadlocked Federal Energy Regulatory Commission failed to act on the proposal.

The development marks a major win for a coalition of utilities led by Southern Co. and two Duke Energy Corp. subsidiaries as clean energy and environmental groups continue to call for a more expansive, fully organized wholesale market approach in the region.

Filed with FERC in February, the intra-hour, bilateral trading platform — dubbed the Southeast Energy Exchange Market, or SEEM — is projected to save consumers between $40 million and $50 million annually in the near term and up to $150 million annually in the long term.

The SEEM construct would build on an existing bilateral trading platform by enhancing utilities' ability to trade excess electricity carried by spare transmission capacity, boosting renewable generation that would otherwise be curtailed.

Other independent studies have estimated that consumers in the vertically integrated Southeast would slash emissions and save a cumulative $384 billion by 2040 by establishing a regional transmission organization charged with coordinating least-cost generation dispatch and operating and planning the transmission system.

Facing calls to convene a technical conference on the proposal, FERC teed up action on the SEEM proposal at its September open monthly meeting. But the action item was later struck from the agenda.

Under the Federal Power Act, tariff filings go into effect by operation of law if FERC allows 60 days to pass without taking action that prevents a result, such as by setting a rate for hearing or seeking more information using deficiency letters.

After issuing two deficiency letters to the SEEM participants, FERC was required to act in the proceeding on or before Oct. 11. In a notice, however, FERC said the proposal became automatically effective Oct. 12, with members of the commission split 2-2 "as to the lawfulness" of the proposal.

SEEM participants cheered the development in an Oct. 13 press release, arguing that the new market "will have little bureaucracy and related expenses."

"SEEM will allow resources to more easily access the electricity wholesale market and will enable and encourage new technologies and approaches necessary to deliver more economic and clean energy to our customers," Noel Black, Southern's vice president of governmental affairs, said in a statement. "We look forward to soon delivering those benefits to customers"

Advocates of wholesale power market expansion derided FERC's failure to act as a missed opportunity.

"The acceptance of SEEM without a FERC order allows the sponsoring utilities to move forward without any commission direction on how the new platform should be implemented and with no conditions that would improve transparency as to the benefits SEEM will actually deliver in practice," Jeff Dennis, managing director and general counsel of Advanced Energy Economy, said in a statement. "This result could allow utilities in the Southeast to lock in a subpar alternative that will not create meaningful savings for ratepayers and will do little to accelerate the adoption of advanced energy technologies, while allowing those utilities to cement their market dominance in the region."

Changes to the Federal Power Act made in 2018 require FERC commissioners to issue statements in proceedings where rate filings become effective by operation of law. Interested parties can also seek rehearing or clarification of that result and eventually challenge any final FERC determinations in federal appeals court.

The SEEM development comes after FERC, which is evenly divided along partisan lines, similarly failed to act in September on a contested PJM Interconnection proposal to roll back a contentious capacity market overhaul.

District of Columbia Public Service Commission Chairman Willie Phillips, a Democrat nominated by U.S. President Joe Biden to serve as FERC's fifth commissioner, is set to appear for a confirmation hearing before the U.S. Senate Committee on Energy and Natural Resources on Oct. 19.