FERC approves SEEM revisions seeking to improve transparency, create safeguards

The US Federal Energy Regulatory Commission approved proposed revisions to the Southeast Energy Exchange Market agreement that aim to improve public transparency and create safeguards for the marketplace to protect against manipulation.

The commission determined that the proposal adequately balanced transparency and the need to protect sensitive information, according to a Jan. 21 order (ER22-476).

"The additional data to be made available under the proposed revisions will give the commission greater visibility into market behavior in SEEM than that afforded by the original proposal," FERC said.

In October 2021, the SEEM agreement -- which creates a framework for a voluntary electronic trading platform for bilateral trading in the Southeast -- went to effect by operation of law after an evenly divided commission failed to act on the proceeding.

On Nov. 24, SEEM members issued revisions to the agreement under section 205 of the Federal Power Act. Among those revisions, the members proposed to submit confidential market data to FERC on a weekly basis in a manner similar to grid operators.

They also clarified the market auditor's role, requiring that auditor to respond to information requests from FERC, members, state commissions and the North American Electric Reliability Corp., among other regulators, within 30 days. The members explained the authority of the SEEM administrator, who they noted maintains configuration parameters but is not allowed to change such parameters.

The members wanted to modify the agreement as well to "address any remaining concerns over unauthorized use of neighboring transmission systems."

FERC confirmed that it will review and assess the provided data as it monitors market transactions and activity. Additionally, FERC deemed proposals pertaining to the SEEM administrator and market auditor, aiming to protect neighboring systems, and restricting market-based rate holders to be just and reasonable.

"We find the remaining ministerial revisions appropriate," FERC said.

FERC accepted those revisions effective Nov. 25, 2021.

Democrats' concurrences

Chairman Richard Glick praised the market participants' "commitments on transparency." In a concurrence, the chairman said the revisions will help "ensure that the commission can fulfill its responsibility to protect customers and market participants in the Southeast by allowing the commission to remedy any unjust and unreasonable or unduly preferential or discriminatory conditions, should they arise in the [SEEM]."

Fellow Democratic Commissioner Allison Clements added that the proposed amendments are just and reasonable, though she reiterated her opposition to the SEEM construct, which she said was unjust and unduly discriminatory.

"I concur, however, to clarify that the proposed amendments do not cure the underlying fundamental flaws with the Southeast Energy Exchange Market (SEEM) agreement, as incorporated into the relevant SEEM members' Open Access Transmission Tariffs," Clements said.

SEIA, AEE opposition

FERC cast aside arguments against the revisions, noting that the groups "raise concerns that pertain almost entirely to the filed rate and not to the proposed revisions before us in this proceeding," according to the order.

"The justness and reasonableness of the existing provisions of the SEEM agreement to which the members do not propose revisions in this proceeding is not pending before us," FERC said. "Thus, arguments that alleged deficiencies in the SEEM agreement are not remedied by the proposed revisions are beyond the scope of this proceeding."

A coalition of clean energy groups had argued that the proposed revisions "can only rehabilitate the SEEM agreement if the revisions include a pool-wide Open Access Transmission Tariff, demonstrate a lack of market power, or propose measures sufficient to mitigate the market power of the members."

The market needs a tariff to prevent discrimination, and the revisions "neither demonstrate a lack of market power nor provide any measures to mitigate the members' market power and discipline their ability to set the prevailing price," according to the order. That coalition included the Solar Energy Industries Association, Advanced Energy Economy, Advanced Energy Buyers Group and Clean Energy Buyers Association.