UPDATE: Feb. 9, 2022: A coalition that includes the Natural Resources Defense Council, the Sierra Club and the Southern Alliance for Clean Energy on Tuesday asked the U.S. Court of Appeals for the District of Columbia Circuit to overturn the Federal Energy Regulatory Commission’s effective approval of the Southeast Energy Exchange Market (SEEM).

“We're concerned that the SEEM arrangements as approved erode foundational principles of open access to the transmission system,” Jeff Dennis, Advanced Energy Economy managing director and general counsel, said Tuesday on Twitter. “There is a risk that incumbent market power could expand and rates to consumers could increase.”

UPDATE: Jan. 7, 2022: Santee Cooper, with about 5,800 MW in power supplies, has joined the Southeast Energy Exchange Market (SEEM), a pending platform for utilities in 11 Southeastern states to buy and sell power to each other in 15-minute increments, the South Carolina-owned utility said Thursday.

"We are excited by the opportunities SEEM will offer our customers, including better capability for integrating renewables and savings from lower fuel costs and improved efficiencies," Charlie Duckworth, Santee Cooper deputy CEO and chief innovation and planning officer, said in a statement. Utilities behind SEEM, such as Southern Co. and Duke Energy Carolinas, intend to launch the trading platform in mid-2022.

Last month, the Federal Energy Regulatory Commission rejected requests to reconsider its tacit approval of the SEEM proposal, saying the requests were submitted after a 30-day deadline had passed.

However, groups such as the Southern Alliance for Clean Energy, the North Carolina Sustainable Energy Association and the Sustainable FERC Project in December jointly asked FERC to reconsider its 3-1 approval of transmission-related rules needed to implement SEEM.

UPDATE: Nov. 15, 2021: Two sets of advocacy groups that include the Southern Alliance for Clean Energy (SACE), the Sierra Club and Advanced Energy Economy (AEE) on Friday asked the Federal Energy Regulatory Commission to rethink its failure to reach a decision on the proposed Southeast Energy Exchange Market, which let the plan take effect last month.

In part, the coalition that included SACE argued the non-decision was flawed because it creates opportunities for Southern Co. and the other utilities in the planned market to use market power to affect electricity prices. The group that included AEE said it was "arbitrary and capricious" to let the SEEM proposal take effect without FERC responding to arguments raised by parties in the docket.

The coalition with SACE said it plans to ask FERC to reconsider its decision earlier this month approving new transmission rules needed to implement the SEEM plan.

FERC has 30 days to respond to the rehearing requests before parties can sue the commission over the SEEM proposal in an appeals court.

Dive Brief:

• A proposed trading platform for 15 utilities across the Southeast — the Southeast Energy Exchange Market (SEEM) — took effect after the Federal Energy Regulatory Commission again deadlocked on a major policy issue.

• SEEM, set to be operating in a dozen states by mid-2022, is expected to produce up to $50 million in annual savings in the near-term by allowing market participants to more efficiently buy electricity, according to the utilities behind the plan.

• SEEM opponents on Wednesday urged FERC to make sure the market evolves beyond the proposal. "The failure of some of the largest monopoly utilities in the country to convince a majority of commissioners that SEEM is legal is yet another reason why it cannot be the last step towards wholesale market reform in the Southeast," Maia Hutt, a Southern Environmental Law Center attorney, said in a statement.

Dive Insight:

Two weeks after deadlocking on the PJM Interconnection’s revised minimum offer price rule, FERC, which has four sitting commissioners, was unable to get a majority to agree on another major policy issue.

"Commissioners are divided two against two as to the lawfulness of the change," FERC said in a notice released Wednesday. As a result, SEEM took effect on Oct. 12. 

SEEM will make the existing bilateral wholesale electricity market in the Southeast more efficient, eventually producing up to $150 million in annual savings as renewable energy levels in its footprint rise, Southern Co. said when it proposed the market in February on behalf of utilities in the region (ER21-1111).

The Southeast lacks an organized wholesale power market and utilities sell electricity to each other in bilateral deals, often by phone and with the shortest transactions being an hour long.

The planned SEEM is a 15-minute energy market that will match utility participants with low-cost energy to serve their customers across parts of 12 states, according to its proponents.

"Southeastern electricity customers will see cost, reliability and environmental benefits," Southern said in a statement Wednesday. 

Environmental groups, renewable energy advocates and others wanted FERC to reject the proposal, arguing it lacks adequate market oversight and fails to give non-utility generators an opening in the region. They had urged FERC to hold a technical conference to explore "true market reform" in the Southeast.

"The SEEM proposal is not a real market, and it will only serve the interests of entrenched monopoly utilities," Gizelle Wray, Solar Energy Industries Association regulatory affairs director and counsel, said in a statement Wednesday. "This proposal will embolden utilities to put up roadblocks for independent power producers and will slow our transition to clean energy."

Besides Southern, other initial SEEM participants are expected to include Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Progress, PPL Corp.'s Louisville Gas and Electric and Kentucky Utilities, the Tennessee Valley Authority as well as cooperative and municipal utilities.

SEEM does nothing to change the status quo, with its utility backers controlling nearly all the generation across the region, according to Jeff Dennis, managing director and general counsel for Advanced Energy Economy (AEE), a trade group that opposed the proposal. 

"They've created a platform that mostly works for their generation assets," Dennis said. "It really does nothing to give customers access to more supplies to improve competition among generating resources in the region, or to improve access to the transmission system." 

Parties in the case will likely ask FERC to reconsider its decision, Dennis said, noting AEE is considering its options. Rehearing requests are a required step before asking an appeals court to review a commission decision.

Rehearing requests are due in 30 days and FERC then has another 30 days to respond to them. In upcoming filings, FERC's four sitting commissioners will explain their views on the SEEM proposal.

There are other issues at FERC that likely have 2-2 splits between commissioners, but unlike the SEEM proposal, the agency doesn’t have deadlines for making decisions in those cases, according to Dennis.

The Senate Energy and Commerce Committee is holding a hearing on Oct. 19 to consider Biden Administration nominees, including Willie Phillips, a Democrat who was tapped to fill FERC’s vacant seat. With its packed legislative schedule, it is unclear how soon the Senate could vote on the nominees.