…FERC as Climate Enforcer…
The House has proposed a new Act:
One of its provisions requires that all utilities be part of a Regional Transmission Organization (RTO) or Independent System Operator (RTO/ISO).
Today, two-thirds of the country are covered by RTO/ISOs. The remaining utilities, primarily in the Southeastern and Western states, continue to be administered by state regulators, which, prior to the formation of RTO/ISOs in 2000, had been the traditional method for regulating electric utilities.
The Looming Energy Crisis, Are Blackouts Inevitable, describes how RTO/ISOs are rigging auctions to ensure wind and solar are added to the grid, and how, through their policies, the cost of electricity has increased.
The accompanying table shows that RTO/ISOs increased the cost of electricity substantially more than traditionally regulated utilities.
The Looming Energy Crisis explained that NYISO was able to minimize increases because a large part of its electricity came from low-cost hydropower. At the time the book was published, it wasn’t clear why Texas, i.e., ERCOT, had been able to keep costs low, but it’s now clear they did this by, among other things, not building the necessary baseload power which could have reduced the impact of freezing weather.
Traditionally regulated utilities supply the least costly electricity to their customers.
This will change if the proposed Act is passed, and consumers in every state will see their electric bills rise more rapidly.
The purpose of the Act is to force the adoption of policies to cut CO2 emissions.
The House wants to force these remaining utilities to become part of an RTO/ISO, governed by the same policies as the other RTO/ISOs.
Not only will FERC impose RTOs on the utilities not yet a part of an RTO/ISO, but FERC will be empowered to approve a carbon pricing regime, setting rates under sections 205 and 206 of the Federal Power Act.
This would allow a price to be set on carbon, something that the RTO/ISO, PJM has already discussed. FERC has recently indicated its receptiveness to hearing carbon pricing proposals.
Current RTO/ISO policies are undermining the reliability of the grid, virtually ensuring that Americans will suffer more blackouts, similar to those that have occurred in Texas and California.
Wind and solar, for example, are being used in reserve margins under various stratagems, as outlined in The Looming Energy Crisis, and as seen in this video, Wind and Solar Realities
With this proposed Act, everyone will see an increase in their monthly electric bills while being forced to endure an increased threat of blackouts.
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