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On September 30, the Federal Energy Regulatory Commission hosted a technical conference that examined the relationship between state and regional carbon-pricing programs and regulated wholesale power markets. Jenner & Block Partner Matthew E. Price spoke on a panel concerning whether the commission has the legal authority, based on the Federal Power Act, to approve a carbon price submitted by a Regional Transmission Organization (RTO) or Independent System Operator (ISO).
According to Mr. Price, “The commission can accept a filing incorporating a state-determined carbon price into an RTO dispatch mechanism because it is a wholesale market rule aimed at promoting wholesale market efficiency.” He added, “the Commission’s task is simply to review … the proposed tariff … and decide whether it is reasonable,” and he outlined reasons why the Commission could find such a rule to be just and reasonable. An overview of the conference was published by Law360, and RTO Insider. Mr. Price’s comments during the conference can be found here.