FTC Staff Submits Comments to FERC on More Efficient Ways To Integrate Alternative Energy Sources Into the Nations Power Generation System

The Federal Trade Commission’s staff submitted a comment as part of a Federal Energy Regulatory Commission (FERC) rulemaking on the integration of alternative sources of energy – such as wind farms, solar cells, and solar thermal installations – into the nation’s electric power grid. The staff comment suggested ways to integrate such alternative sources into the grid more efficiently, to improve the reliability of electric service, and to foster innovation that can lower the costs of meeting environmental policy goals.

According to the comment by the Office of the General Counsel and the Bureau of Economics, certain alternative energy sources differ from traditional sources such as fossil fuels and nuclear power because they are not consistently available. This variable availability adds to the uncertainty of balancing the supply and demand for electricity provided by alternate energy sources. FERC seeks to improve the integration of these energy sources into the power system, while maintaining competition and protecting consumers from higher prices.

The FTC staff’s comment responds to current FERC proposals in three areas:

• The use of shorter time increments to predict energy demand and schedule supply in the power system;
• Improved accuracy in using weather forecasting to estimate real-time power generation by alternative energy sources; and
• Ways for alternative energy sources to supply their own regulation service (a form of transmission service) instead of having to obtain that service from public utility transmission providers.

The comment urges FERC to explain more thoroughly how alternative energy sources can supply generation reserves on their own. According to the comment, such a discussion will support competition in the supply of those reserves. The comment concludes by urging FERC to protect against proposals that would discriminate against alternative energy providers when allocating regulation service costs. Such discriminatory allocations, the staff states, could raise rivals’ costs and lessen competition in the industry.

The Commission vote approving the comment was 5-0. It can be found on the FTC’s website and as a link to this press release. (FTC File No. V100009; the staff contact is John H. Seesel, Associate General Counsel for Energy, Office of the General Counsel, 202-326-2702; see related press release dated April 16, 2010.)

Copies of the document mentioned in this release are available from the FTC’s website at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 10.2011.wpd)