Replacing the fossil-fueled energy supply with renewable energy requires unusual focus and substantial investment in the electricity sector. Our ability to meet these needs that are elevated by climate change, health impacts and recovery from the Covid-19 crisis depends on the trust and success of little-known utility governing bodies. We at the Union of Concerned Scientists work to make these institutions more transparent, understood, and responsive to science and democratically established laws.
In much of the country, the electric system benefits from regional coordination with one of seven grid operators set up to be independent, with transparent and competitive markets. These regional transmission organizations (RTOs) or independent system operators (ISOs) evolved over decades and matured in the 1990’s through a combination of electric utility industry and government regulatory desire for cooperation and efficiency. Coordination in the utility industry through competition and innovation becomes harder when the RTOs/ISOs ignore the public interest in further decarbonizing energy. The conflict between an energy market system that ignores external costs, and society and policy makers that see the health and climate impacts of pollution from energy can’t be ignored.
First, these organizations demonstrate they can deliver savings and integration of high levels of renewables. They are trading platforms where buyers and sellers meet in a wholesale electricity market. The RTOs/ISOs do not own the utility assets other than the software, communications systems and talent in understanding the functioning of these systems. This is similar to better known trading platforms, such as Lyft/Uber, eBay, or Amazon, which set rules for access to market for sellers to offer and buyers to purchase without owning the roads for vehicles or the manufacturing plants for consumer goods.
Utilities are different
The difference with these RTOs/ISOs is that they were established by existing monopolies, without anticipation of renewable energy growth driven by policy, economics or carbon limits. The influence of the incumbent players in making the rules is not found in the better-known platforms. How much do the existing asset owners influence new energy technologies in the market? We can take a look at how open, transparent, and interested in emissions these grid operators are.
We have work to do
The RTOs and ISOs are at varied and different places on transparency and consideration of climate impacts. Broadly, the RTOs/ISOs provide regional coordination and sharing reserves through power pools that benefit consumers and allow competition, and further cost savings and technology innovation. But how well does this structure, set up with advantages for the owners of existing power plants, serve to protect the climate and implement state carbon-reduction policies? When policymakers push the external costs of carbon and health into decisions that can lower carbon emissions, RTOs/ISOs should not counteract those policies and raise costs to consumers.
Transparent and open?
Transparency builds trust. Stakeholders have to know how decisions are influenced. The public needs to know what decisions are being made.
How well members, stakeholders or even the public follow the decision-making depends in large part on the posting of meetings scheduled, agendas and the minutes of what was discussed. UCS was quick to support press access to New England Power Pool when access was denied. But a wider look at the mere posting of meeting dates and agendas for the RTOs/ISOs governing boards differ sharply from one regional grid to the next.
In PJM, there is no schedule of board meetings available and no minutes, leaving stakeholders unsure of discussions of changes on items that members had voted. The ISO-NE board meeting dates and bare agenda are available, but no minutes. At the NYISO, board meetings can be open to regulators upon request. Minutes and future dates are published. The Mid-continent ISO mails out notices of board meetings, and even the committees of the board hold open meetings. The Southwest Power Pool (SPP) posts meeting notices and extensive minutes and materials. The California ISO holds open meetings with video recordings posted on YouTube!
The RTOs/ISOs operate in parallel (and lately in conflict) with state laws that regulate utilities that provide consumer protections, as well as health and safety protections that address environmental externalities through states’ environmental regulation. The New England States Committee on Electricity (NESCOE) recently linked the lack of transparency in stakeholder and ISO-NE Board processes with “the New England States’ legal requirements, policy imperatives, and associated consumer interests”.
There is a wide range in how the RTOs/ISOs keep informed and share data about emissions from power plants. Ten-to-fifteen years ago some ISOs developed a report of average marginal emissions for the evaluation of pollution savings from state energy-efficiency programs. Today, climate change driven by accumulated greenhouse gas is a bigger concern. Reporting totals of emissions over a year, and by month or season will help decision-makers facing a wider variety of options to change fossil fuel use and cumulative emissions.
The NYISO established an Environmental Advisory Council in 2004, and provides it with reports that include average marginal emission rates from NYISO’s generation as well as the cumulative CO2 emissions in New York from all sectors (drawing data from Energy Information Administration). PJM reports only the average marginal rate of emissions, released each spring, and it is impossible to determine if this report is shared with the PJM board (because there’s no transparency). ISO-NE has, since 1993, made a similar annual report of marginal rates of emissions, though with an 18 months delay from the end of the year. California ISO makes monthly reports of emissions. The Southwest Power Pool makes none.
Changed energy mix
Reporting on the energy mix is another measure of improvement on climate-harming emissions. The Southwest Power Pool does post data showing enormous use of wind energy. In the spring and fall SPP’s energy supply is routinely as high as 50% wind. All the other RTOs/ISOs (CAISO, ERCOT, ISO-NE, MISO and NYISO) also display the current energy mix on their web sites. This kind of data on the resources meeting electricity demand is fundamental to the RTO/ISO function. Such display and archiving energy data is a minimal level of transparency not found from utilities outside the RTOs/ISOs.
The accumulation of carbon dioxide in the atmosphere comes from the cumulative emissions from combustion (and other biological sources). A decent comparison and metric for RTO/ISO boards to monitor would show total greenhouse gas emissions from power plant operations, along with the sort of data EIA provides on fuel-burning emissions in other sectors of the economy in their region. That reporting will allow RTO/ISO boards monitor change as members and utilities pursue electrification, and electricity replaces fossil fuel in building and transportation. RTO/ISO boards should receive a report annually on the grid they manage is affecting total climate-harming pollution.
What we need from RTOs
Regional cooperation to meet energy demand requires transparency and openness now as public, leaders, and utility-industry members meet the challenge of climate and decarbonize energy. Leaders of all these organizations need metrics reflecting their own operations and markets, for daily business and for addressing climate damaging emission of carbon and methane (aka natural gas).
People in government need the informed cooperation of citizens and corporations to implement policy on climate. With all the decision-making ahead, the RTOs/ISOs are going to be key for people, their polices and utilities to work together in new ways to move off climate-damaging fuels.
The New England states are asking for change from their ISO. The Mid-Atlantic states are in court over their RTO’s objection to renewable energy policy. We have to decide, are these organizations up to the task?