Energy > AG Speaking Energy > Pacific Northwest Utilities Seek Key FERC Declarations Regarding New Regional Market
23 Sep '15

Two weeks ago, a diverse group of electric industry entities in the Pacific Northwest filed a Petition for a Declaratory Order asking the Federal Energy Regulatory Commission (FERC) to decide issues raised by establishing a Centrally Cleared Energy Dispatch Market (“CCED Market”) for the region.  This market would be a voluntary, centralized platform for buyers and sellers to trade energy on a 15-minute basis. 

The petition formally puts before FERC, for the first time, many of the key jurisdictional and policy issues that have overshadowed earlier efforts to develop centralized market structures in the West and Northwest. The petitioners ask FERC to declare that (1) a completely voluntary market–where each participant is free to join or withdraw from the market at its choosing, and offer to buy or sell power at any time and level– is consistent with law; (2) a decision by a generator not to offer to sell into the market will not, by itself, demonstrate intent to manipulate the market, and that when evaluating intent, FERC will take into account the unique factors affecting hydropower marketing and operations; (3) participation in the market by nonjurisdictional entities (e.g., Bonneville, Western Area Power Administration, City of Seattle) will not affect their statutory exemption from FERC jurisdiction; and (4) Mobile-Sierra protection can be applied to certain elements of the anticipated agreement among the CCED Market sponsors, which would require application of a high (public interest) standard of review to changes to, for example, the voluntariness of the market, or any expansion beyond the 15-minute energy market.

The petition represents a significant step toward the creation of a centralized energy market in the Pacific Northwest.  The willingness of the CCED Market sponsors to take the affirmative step of formally seeking FERC declarations needed to advance the market suggests that there is considerable momentum behind this.  It leaves for another day, however, many market design details that will be important to market participants across the West, including how the CCED Market would interact with other market structures in the region (e.g., the California Independent System Operator (“CAISO”) markets and the broader Energy Imbalance Market (EIM) operated by CAISO).

Reprinted with permission from the Friday Burrito, published by 2015 Foothill Services Nevada Inc.