(November 2009)Regulators are in the unenviable position of determining an allowance for ROE that’s fair to consumers and investors in a volatile economy. The cases that stand out this year...
Regulators Forum: Taming the Utility Frontier
Policymakers are setting sights on new challenges facing utilities.
to the states. Arizona had a unique opportunity with solar energy, but New Hampshire might come up with a different standard. I don’t personally support a federal renewable mandate, because the states are doing a good job with their specific programs. But at the same time we need open access to the interstate grid that doesn’t discriminate against renewables.
Fortnightly: What about green-energy trading programs, which need a uniform interstate structure to function?
Spitzer: I am a big believer in talking and listening. FERC can collaborate with the states. There is a program in the West, WREGIS, to implement a green-trading program. I didn’t want Arizona to surrender its sovereign authority to make decisions, but I liked the idea of green trading to create a renewable market. There is potential value to these programs as long as the states don’t lose control over their retail structure.
I’m not sure FERC is the best agency to develop those programs. You have too many control areas. FERC needs to make sure the transmission grid is sufficiently robust to get energy from point A to point B.
Signals of Certainty
Philip D. Moeller, FERC Commissioner
Fortnightly: What career experiences have been most important in preparing you for your job as FERC commissioner?
Moeller: Everything related to energy and utilities that I’ve done in my career has helped shape my views and what I bring to this job. As a state legislative staffer, I saw the implications of the thrust toward natural-gas and electric competition. Then, in Congress, I worked on active legislation on energy issues. I saw frustration to get reliability legislation. And in the private sector, working for energy companies shaped my views in different ways. I saw the politics of energy, and what works in different regions.
Fortnightly: What do you see as the most important priorities for FERC in wholesale electric markets? What principles should drive FERC’s policies?
Moeller: The main principle for FERC should be helping consumers benefit from a more competitive environment. To do that, we need to continue progress toward opening up markets and ensuring nondiscriminatory policies apply, particularly in areas where we need new infrastructure to be built. We need to send signals of certainty to get investors into the market.
It’s a multifaceted approach, with differences in different regions. We have to stay on top of it to make sure it is working as best it can, and not slowing down in regions where we could have an impact. Competition is too important, and this time is too critical, with demand still rising and infrastructure construction taking so long. It will be a constant effort.
Fortnightly: Some states are considering rolling back utility restructuring. What does this mean for competition in the electric utility industry, and how should it affect FERC’s policies?
Moeller: FERC doesn’t have jurisdiction over retail rates. That is the job of the states. But we should make sure at the federal level that we set policies that continue promoting wholesale competition, and at least the states can benefit from that aspect of our