Ferc's New Regulatory Agenda

Abstract

During the past year and a half, the Federal Energy Regulatory Commission (FERC) has embarked on a significantly more regulatory course than it was on before. The new approach is most evident with respect to transmission, where FERC's leadership is moving aggressively to divide the nation's grid into a small number of quasi-governmental entities called Regional Transmission Organizations (RTOs) and to prescribe in detail how those RTOs should operate. FERC is also engaging in more aggressive "market-monitoring" that will place generators under the continuing threat of price caps, mandated refunds, and loss of market-based rate authority. This new regulatory activism is occurring without sufficient analysis of whether the approach will improve the functioning of markets or be beneficial for consumers.

Keywords: FERC, electricity deregulation