Major decisions ahead for FERC: report

  • : Electricity, Emissions
  • 16/10/11

The next US president will help shape the future of distributed generation, market consolidation and state renewable portfolio standards through appointments to the Federal Energy Regulatory Commission (FERC), which has broad power to regulate electricity policy.

FERC's main task will be to decide how much federal policy should accommodate state policy, and how far states can regulate without overstepping into federal territory, according to a report by the University of North Carolina School of Law Center for Climate, Energy, Environment and Economics; the Harvard Environmental Policy Initiative; and Duke University's Nicholas Institute for Environmental Policy Solutions. While the jurisdictional line was once clearer, the growth of the multi-state electric grid and interstate markets for electricity has expanded FERC's responsibilities.

Pressing issues facing FERC under the new administration include how much to support the growth of state distributed energy sources, including rooftop solar, in the US. The body will also need to rule on utility mergers in an increasingly rapid consolidation process and to address the growing number of ambitious state renewable energy portfolios.

Only three of the five FERC seats are held, meaning that the next president will immediately be able to nominate two new commissioners to the regulatory body. FERC rules state that no more than three commissioners may come from the same political party. No matter who takes the White House the new appointees will not be Democrats, because all three current commissioners belong to that political group.

The report listed electricity market regulation, under the purview of FERC, first out of six key areas of federal energy policy to be decided by the next administration. The other areas include climate policy, nuclear energy, shale gas oversight, economic development in communities affected by coal's decline, and government procurement.

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