Coalition urges FERC to organise carbon pricing policy discussion

A diverse coalition of power sector players and organisations is urging US policy makers to look into the possibility of introducing carbon pricing policies to cut emissions in certain regions.

The group of power producers, trade associations and think tank experts submitted a request for the Federal Energy Regulatory Commission (FERC) to gather stakeholders to examine various mechanisms and discuss the implications of adopting carbon pricing policies in regions with organised wholesale electric energy markets.

In addition to trade associations such as the American Wind Energy Association (AWEA), the coalition also includes sector majors such as Brookfield Renewable Partners LP (TSE:BEP.UN) and NextEra Energy Inc (NYSE:NEE).

Amy Farrell, senior vice president of AWEA, pointed out that several competitive wholesale electricity markets are already exploring or developing proposals to price carbon emissions directly in energy market operations. “These proposals have the potential to reduce carbon emissions in a way that complements the competitive structure of electricity markets—improving market efficiency, lowering costs to consumers, and ensuring reliability—making this approach an important opportunity for wholesale market stakeholders to consider,” she stated.

According to Glen Thomas, the president of PJM Power Providers Group, the currently emerging “piecemeal” carbon policies result in less efficient markets for consumers and it should be considered whether a better regional option could be created.

In turn, Thad Hill, president and CEO of Calpine Corporation, said: “We believe that placing an economy-wide price on carbon will spur competitive markets to produce the most cost effective and environmentally responsible solutions.”

“While Vistra strongly believes that a nationwide carbon-pricing policy, like the CLC’s Bipartisan Climate Roadmap sets forth, is the most effective, achievable, and fair solution, our company also holds that regional carbon pricing is a worthy intermediate step [...],” commented Curt Morgan, president and CEO of Vistra Energy.

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