States can’t bar efficiency technologies from wholesale electricity markets, FERC rules
The decision, responding to a petition from Advanced Energy Economy to clarify the commission’s authority, is seen as a win for advocates of demand management technologies.
he Federal Energy Regulatory Commission in a Dec. 1 order, barred states from blocking energy efficiency from competing in regional electricity markets, reaffirming its authority over wholesale power markets.
It’s a win for advocates of demand management technologies, particularly as electricity sales stagnate and utilities may consider spending less on managing or reducing those loads.
The commission’s decision did carve out an exemption for the case that launched the proceeding. East Kentucky Power Cooperative had asked the Kentucky Public Service Commission to restrict energy efficiency resources from the wholesale market, part of a bid by utilities to reduce spending on demand-side management, as electricity consumption declined. But FERC’s narrow exemption means it will apply only to the Kentucky situation.
In allowing Kentucky utilities to enter the PJM Interconnection, FERC approved a settlement with the state’s PSC stipulating that no PJM “demand-side response or load interruption programs” would be made available to Kentucky customers unless authorized by the Kentucky commission.
The agreement didn’t specifically mention efficiency measures, but the FERC order notes that under Kentucky law, demand-side management “is a broad enough term to include energy efficiency. … Moreover, energy efficiency measures would also generally qualify as demand-side management under the industry’s common understanding of the term.”