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How does Southeastern power demand compare to the rest of the country?

John Wilson's picture
Research Director Resource Insight, Inc.

I have worked on utility regulation for the past 13 years. Areas of focus include:- Utility energy resource planning and procurement- Rate reform to address energy efficiency and distributed...

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  • Apr 22, 2020
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Many people in the power industry are very familiar with the independent system operators (ISOs) and regional transmission organizations (RTOs) in the US. But even those who are reasonably familiar with the Southeast forget just how large the region is - like my colleague Tyler Norris, who recently posted a tweet comparing the Carolinas to the California ISO.

One might ask these three questions:

  • If the Southeast utilities were reorganized into RTOs, what regions would form?
  • How would they compare to RTOs in the rest of the country?
  • Would the RTOs be viable, or would they be dominated by a single utility?

And just in case you are asking those questions, I've got the answers!

Once you screen out the utilities included in MISO and PJM, the remaining utilities cover all or part of eight Southeastern states. I think the four logical regions are the Tennessee Valley Authority (TVA), the Carolinas, the Southern Balancing Area (SBA), and the Florida Regional Coordinating Council region (FRCC, bascially peninsular Florida). The map above splits the Carolinas into two sub-regions, but I've merged them for purposes of this blog.

Coincident peak demand for four Southeastern regions compared to ISOs and RTOs.

Each of the four regions would be very substantial in terms of power demand. Only three of the country's current ISO/RTOs would be clearly larger than the four Southeastern regions.

In fact, if you add all four regions up, the coincident peak would be 164,000 MW - larger than any existing ISO/RTO in the country. To learn more about demand in the Southeast, check out my recent blog, How well do you understand peak demand in the Southeast USA?

So this leads to the final question, would these RTOs be viable as market regions? Well, I can't really answer that because it would depend on the legislation. But I can say that two of the regions would be heavily dominated by the single largest utility holding company.

  • Carolinas - Duke Energy accounts for about four-fifths of peak demand in the Carolinas (not counting the portions of the Carolinas that are in TVA and PJM).
  • SBA - Southern Company accounts for about two-thirds of peak demand in the SBA region, after accounting for the sale of Gulf Power.
  • Florida - FP&L would account for about half of peak demand in the FRCC region. However, NextEra now owns Gulf Power (which is in the SBA) and may build transmission to link Gulf Power into its system, which would significanly increase NextEra's market power in the FRCC region.
  • TVA - Well, TVA would be its own region. But it's members - municipal and cooperative utilities - each represent relatively small parts of the overall TVA system. For example, MLGW's annual peak would represent roughly a tenth of TVA's peak.

Some people are beginning to talk about creating some kind of regional market structure in the Southeast. As you can see, the number of states (think about state and federal legislation), the scale of power demand, and the dominance of Duke Energy, Southern Company, and NextEra make any kind of regional action a daunting task.

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Matt Chester's picture
Matt Chester on Apr 22, 2020

What was the difference between the Southeast's current situation of being dominated by a few utilities and other regions that ended up with regional markets? Were the players in the areas that are now PJM, CAISO, NYISO etc. all less substantial and that's what led to the creation of regional markets? 

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