From Scott Carlberg

The Federal Energy Regulatory Commission (FERC) recently gave tacit approval for a regional wholesale electricity market to facilitate the selling and buying of power. The Southeast Energy Exchange Market (SEEM) is its name. This is for organizations that make power or get it to customers, not for the average consumer.

Some people aren’t happy the organization got started. They want more structure, regulation, and rules.

Here’s how SEEM describes its function: “The new SEEM platform will facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission.”

SEEM is a place to contract for buying and selling power.

SEEM members are electricity producers and transmitters: Associated Electric Cooperative, Dalton Utilities, Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Progress, ElectriCities of North Carolina, Georgia System Operations Corporation, Georgia Transmission Corporation, LG&E and KU Energy, MEAG Power, NCEMC, Oglethorpe Power Corp., PowerSouth, Santee Cooper, Southern Company, and the Tennessee Valley Authority.

“Tacit approval” means that FERC did not approve it as much as not stop it. Regulations say that if FERC neither approved or disapproved SEEM, it would take effect.

In the past utilities have worked together to coordinate power on the grid for the Southeast. That has worked well.

Now several organizations that do not make or transmit electricity asked FERC to reconsider SEEM. They are reported as a Clean Energy Coalition of several renewable energy trade and buyer groups, and “an ad hoc group of environmental and clean energy organizations calling themselves the Public Interest Organizations.”

“Unjust, unreasonable and unduly discriminatory,” say opponents of the SEEM model. They request to study a different wholesale business model that adds more rules and bureaucracy to the market. It’s an RTO – regional transmission organization. Texas has an RTO, for instance, to assure that its power is reliable and adequate. California has something close to its own RTO. The Mid-Atlantic has an RTO that was accused of spending too much for extra power and used too much coal.

Here’s how I see it. An RTO-like organization ideally is put in place to make sure there is enough electricity for the public, and at a reasonable price. (I call SEEM “diet-RTO,” and barely that) Its purpose is proscribed. It is not a cure-all for every energy issue, though some sell RTOs that way.

The graphic below shows prices in the SEEM territory in 2019. There was no SEEM then. SEEM is the green bar. Prices look okay, even compared to places with an RTO. Same kind of details are true when it comes to power reliability.

The Carolinas appeared hellbent on creating an RTO until recently. The new North Carolina energy bill seems to set aside an RTO. South Carolina still has some legislators who want an RTO study, but to me it seems their minds are made up and need cover to get to an RTO. (As I have said in these pages before, it’s odd that South Carolina, which values state ownership and independence, wants to give away its influence and freedom by creating an RTO.)

This may all be a respite, especially in South Carolina. Lots of political capital has been placed on an RTO and there are races to run in 2022. The bottom line is that those with narrow energy interests, and policymakers looking at 2022, will keep selling an answer in search of a problem.