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FERC Considers a Policy That Could Help or Hinder Load Management

Todd Carney's picture
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Todd Carney is a graduate of Harvard Law School. He holds a Bachelor’s degree in Political Science and Public Communications. He writes on many different aspects of energy, in particular how it...

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  • Dec 7, 2022
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Utility Dive had an interesting article that covered how many energy advocates are leaning on the Federal Energy Regulatory Commission (FERC) to establish a minimum threshold for the amount of energy allowed to go between regions. 

Advocates are pushing for this policy because they believe it would help prevent grid outages and also lead to cheaper energy prices. While there are many events that have spurred this movement, a key one is the power outages from the horrible winter storm that Texas faced in February 2021, which resulted in 250 deaths. There are a number of potential weather problems that could result in similar power outages.

Backers of this policy want FERC to hold that all regions must have the ability to transfer at least 15 percent of the energy in a peak load. For this to work, the US government would need to double the sharing capacity for all regions. 

In response, some have cautioned that having to increase the capacities by this much would come with a price tag of billions of dollars from the taxpayers. These skeptics argue that this rule might not even have the benefits that proponents promise. The detractors argue that a national requirement is too much of a one size fits all policy, so instead it would be best to improve the policies and infrastructure in each region. They also argued that with prices already increasing, this requirement could make things worse. Others have noted that several regions already have a strong sharing capacity, such as in Georgia.

A FERC task force recently had a discussion on this potential policy, and there was significant support for it. But many figures representing regional energy commissions have also opposed the policy. So it is likely FERC will face intense lobbying from both sides.

The policy sounds promising, but the other side raises some good points. While government money is not endless, it does seem the investment is worth it to prevent a situation like in Texas. But if this investment is not going to work, or even make things worse, then it is a mistake. For regions that already can share this amount, it does not seem like the new policy should impact them. As for the regions with lacking infrastructure, hopefully the requirement could make them get their infrastructure in line. Hopefully, the public comment period will help shed light on what is the best policy.

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Thank Todd for the Post!
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