Competitive markets needed to make Western energy industry more efficient – FERC Commissioner Norris

The West needs robust, competitive markets to efficiently balance a changing resource mix and more predictability from Washington, D.C., to increase the efficiency of the western electric industry.

That was the message FERC Commissioner John Norris delivered at the annual meeting of the Northwest & Intermountain Power Producers Coalition (NIPPC) in Union, Wash., Sept. 10. NIPCC lists its members as 12 power producers and marketers, and its associate members as five law firms with active energy practices.

“These are independent power producers; they live and die by the success and the availability of markets, both transmission for access and the ability to compete in a transparent, open-access environment where they want to produce electrons, but also power that consumers need and want,” Norris told TransmissionHub following his presentation.

In 2010, shortly after his appointment to FERC, Norris attended an industry meeting in Seattle, Wash., and walked away from his first visit to the area thinking, “A competitive market in the Northwest is probably not going to happen in my lifetime,” he said.

Three years later, the opportunity for a competitive market there has changed dramatically.

“I think the change in resource mix, the expectation in meeting … public policy goals for renewables, and the technology advancements in this space have enabled us to bring [online] a lot of different variable resources,” Norris said. “However, with that is the necessity for a market … that can help balance that variable generation.”

Norris cited the memorandum of understanding (MOU) PacifiCorp and the California ISO (Cal-ISO) entered into in February to work toward incorporating PacifiCorp into an expanded real-time energy imbalance market (EIM).

“They recognize that the resource mix is changing, the need for generation resources and the flexible resources that are necessary for balancing, and the costs if you don’t do this efficiently are going to become exorbitant,” he said.

Other changes will also contribute to a more open, transparent, and efficient environment, including the bifurcation of the Western Electricity Coordinating Council (WECC). Under a resolution approved by the WECC board of directors on June 27, WECC will split its NERC-delegated governance functions from its functions on behalf of member entities, such as reliability coordination efforts and system planning.

The WECC bifurcation, Norris said, will enable WECC to more efficiently evaluate how the West most efficiently meet its needs in the future, Norris said.

Other changes could include consolidating some of the balancing authorities in the West for greater efficiencies, Norris said.

Click here to read Norris’ comments on FERC’s role in establishing a stable ROE policy.