Electric Reliability Under Congressional Scrutiny
Members of Congress are taking notice of electric reliability woes, especially in the nation’s RTOs. In a letter to FERC, leadership of the powerful U.S. House Energy and Commerce Committee asked several pointed questions of the agency related to reliability and the performance of RTOs. Specifically, Committee leadership asked:
In your view, are the current Regional Transmission Organizations (RTO) or Independent System Operators (ISO) the best mechanism to provide reliable electricity? Please explain.
Do current market rules allow dispatchable, on-demand generation resources the opportunity to recover sufficient revenues to continue to operate in the RTOs/ISOs? If so, which rules? If not, would you recommend FERC direct RTOs/ISOs to implement such rules?
How do RTOs/ISOs compare to traditionally regulated regions in terms of electric reliability? Please provide specific data.
What policies, whether federal, state, or market rules, prevent sufficient resource adequacy in RTOs/ISOs necessary to power the grid 24/7/365 regardless of the weather?
Gas power generators are not required to procure firm gas transportation in RTO/ISO markets. How will the Commission ensure that market design adequately compensates natural gas generators for the reliability benefits of firm natural gas transportation?
The questions are a good starting point for Congress to embark on a deep dive into what is ailing the grid. Blackouts in California and Texas, and near-misses in other RTO regions, should spur thoughtful inquiries into what is going wrong. This Congressional letter does just that, including specific references to challenges in CAISO, MISO, SPP and PJM.
The inquiry will also be a good datapoint for state policymakers that are endeavoring to learn more about how different market and regulatory structures best serve their constituents. Too often, debates about wholesale “markets” are driven by superficial discussions about competition being preferable to regulation. Of course, that is true, but how do we compare an increasingly dysfunctional “competition” construct to generally functioning and well-understood regulation of an essential public service? That’s a more appropriate discussion because it more closely mirrors what is happening in electricity policy today. It’s good to see Congressional leaders asking the right questions so an honest dialogue can be had.