Energy Market Complexities and the Need for Certainty

Abstract

As many of this Journal's readers are aware, the Federal Energy Regulatory Commission (FERC) is an independent agency organized within the US Department of Energy (DOE). Simply stated, FERC is responsible for regulating the interstate transmission of natural gas, petroleum, and electricity and for overseeing the establishment of just and reasonable rates for wholesale electricity sales of Independent System Operators (ISOs) and Regional Transmission Organizations (RTOs). Sounds straight forward at first blush, but there is nothing simple about FERC's role. And, FERC's importance in energy infrastructure development and market operations cannot be overstated. As the nation and many states pursue aggressive decarbonization and clean energy goals, FERC's role in energy project permitting and compliance, and wholesale market operations is critically important. FERC can provide the leadership necessary to support private sector investment in infrastructure development and in fair market valuation and pricing of assets in energy markets. Coupled with federal and state funding and policy support, a clear and decisive role by FERC could provide the certainty investors need for committing capital to clean energy and decarbonization investments.