Wholesale electricity markets in the United States are overseen and governed by nonprofit entities—known as independent system operators (ISOs) or regional transmission organizations (RTOs)—that exert a great deal of control over how the markets operate. Most of these markets, other than ERCOT in Texas, are regulated at the federal level by the Federal Energy Regulatory Commission (FERC). Local governments can support renewable energy and clean technologies by working with their local ISO/RTO or FERC to develop market rules and operating procedures that support renewable energy and remove existing barriers to clean technologies.
Engaging in Wholesale Energy Markets
Only applies to local governments located within one of the country’s seven ISO or RTO regions.
For local governments situated within the seven regions of the country where organized wholesale energy markets exist, market rules, operating procedures, and planning processes can impact their ability to procure renewable energy and the rate of regional decarbonization. For example, ISOs/RTOs oversee how electric transmission is built, which may be needed to transport electricity from windy or sunny rural areas to urban areas. They also oversee if and how much clean technologies are compensated for the various services they provide to maintain grid stability.
In some cases, decisions on these types of issues are brought before FERC, which can order most ISO/RTOs (except ERCOT) to implement changes or revisit an issue. By joining these discussions, local governments can ensure that the ISO/RTO is aware of their communities’ needs and advocate for pilot programs, policies, and reforms that support their objectives.
ISOs and RTOs are membership organizations, and local governments can become involved in their stakeholder processes as either voting or non-voting members. Local governments may also engage in FERC proceedings in which changes to rules or procedures are ultimately reviewed. There are also informal pathways for engagement, such as attending public meetings hosted by ISOs, RTOs, or FERC; having direct conversations with RTO leadership or staff; and publicly commenting on relevant issues. Local governments can choose to engage individually, as a coalition, or in collaboration with others.
The Federal Energy Regulatory Commission (FERC) provides an overview of US electric power markets, including ISOs and RTOs. (Note that the northwest, southeast, and southwest in this overview do not represent integrated wholesale energy markets.)
This World Resources Institute paper presents three main avenues for local governments to get involved in wholesale market issues concerning renewable energy: through public statements, at the FERC level, and at the RTO/ISO level. It also details how working collaboratively can help local governments overcome barriers like limited capacity, expertise, or funding.
The PJM Cities and Communities Coalition (PJMCCC) is the first city coalition organized specifically to address wholesale market level issues. In 2019, the coalition sent a public letter to the PJM Board of Managers, urging the search committee to hire a CEO candidate who could move the PJM market toward a clean energy future.
PJM Cities and Communities Coalition Policy Statement on the Benefits of Reducing Barriers to Energy Storage in the PJM Region
In 2020, PJMCCC released a statement on the importance of storage deployment in the PJM territory and its role in supporting renewable energy integration, resilience, equity, and clean energy job creation.
This World Resources Institute blog provides a more detailed discussion of how PJMCCC was formed and its efforts to reform the PJM market.
To review examples of local governments that have utilized one or more engagement pathways to advance their renewable energy goals, visit the Engagement Tracker in the Local Government Renewables Action Tracker.