From Scott Carlberg

A possible new power organization, a Carolina RTO – Regional Transmission Organization – was one topic at the South Carolina Clean Energy Conference. Some people feel that an RTO is the answer for various energy issues, largely keyed to lower prices for electric customers.

An RTO is a wholesale power mechanism. It is not a retail customer mechanism. Logic says that if wholesale costs are more transparent – requests for power clearly matched to bids submitted for power will drive prices down. Looking at power costs in the Southeast, where there is no RTO, and the Mid-Atlantic, where there is an RTO, does not necessarily show a price advantage for RTO utilities. For instance, Pennsylvania, the home base for the PJM RTO shows a power cost for August of 13.86-cents per kWh. South Carolina was 12.56 cents. North Carolina was 11.71-cents.

North American RTOs. Many places do not use one. (FERC)

An RTO is not a simple, one-size-fits-all remedy for electric power needs. Electric prices vary with an array of factors – State and federal rules, business models, weather, usage, demand for new energy capital investment …

RTOs do not drive renewable energy growth, for instance, in case that is a goal for some to look at an RTO. The RTO PJM, noted above, has a significant portion of its supply from coal generation.

ECC is not saying that there should or should not be an RTO. We are saying to understand what an RTO really does and does not do.

An RTO can be an important pricing and coordination mechanism in some energy circumstances. An RTO is not a Robin Hood concept for customers.

Some of the RTO conversation appears to be a buzz-word solution in search of a problem. Careful thought and analysis are needed to determine customer wants and match them with the right market steps forward. A discussion about an RTO in the Southeast must be thorough and devoid of politics to be best for customers.