Engaging in Wholesale Energy Markets - American Cities Climate Challenge
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Engagement Guidance

Engaging in Wholesale Energy Markets

Applicability:

Only applies to local governments located within one of the country’s seven ISO or RTO regions.

What?

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.

Why?

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.

How?

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.

Resources

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.

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