FERC in the 21st Century
1. Complete market standardization. There is currently a hodgepodge of rules across US electricity markets stemming from the incomplete FERC standardization process that stagnated in the mid 2000's. At that point FERC took a hands off approach, apparently with the logic that every RTO loved standards. Yes, everyone loves standards....their own.
Since the stagnation of the mid 2000's each RTO has turned into its own fiefdom, and the US grid currently looks akin to medieval Spain with idiosyncratic rules and products in each RTO. The software and computing power issues present a decade ago are no longer a constraint. FERC has to decide on best practices and work towards standardization.
2. The stakeholder process is broken. Rather than being meritocratic institutions for the governance of each market they have been twisted into royal courts where the entrenched nobility play games of intrigue while attempting to craft ever more restrictive and constraining taxation on markets in attempt to return to the old ways. FERC should have a representative at stakeholder meetings in order to be fully aware of the issues in the pipeline and the court intrigue in the process by which the filing ended up in front of them.
3. Independent Market Monitoring reform: Currently, certain RTOs provide no-bid multi-million dollar fixed-fee market monitoring contracts for their Independent Market Monitor role to small consulting companies, and select a single market monitoring company. This goes against the basic tenets of good governance. We believe that, like the FERC, IMM duties should not be vested in a single monitor. There should be two IMM's per market, with the FERC casting the tie-breaker vote in the event of a disagreement. Furthermore the fee arrangement should not be fixed-fee, this creates an incentive to support rules that reduce market transactions and workload, given that the compensation remains constant.
4. Cost causation should be the basis for any deviation uplift charges in RTO markets. Complexity can no longer be an excuse for not employing cost causation, as forward-thinking markets such as MISO have shown that cost-causation for deviation uplift is more than feasible.