Following a two-year process, Santee Cooper, South Carolina’s state-owned electric and water utility, joined the Southeast Energy Exchange Market (SEEM) effective Jan. 4.
Membership is expected to lead to greater capability for integrating renewables and savings from lower fuel costs and improved efficiencies, according to a statement.
The SEEM platform is intended to facilitate sub-hourly, bilateral trading, allowing participants to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission. Participation in SEEM is open to other entities that meet the appropriate requirements.
SEEM is intended to be an energy-only market, and capacity transactions continue among individual parties as they do today. The market would not address capacity or long-term resource planning.
In November, the Federal Energy Regulatory Commission (FERC) approved transmission rules for SEEM, setting aside concerns they violate requirements that utilities provide open access to their transmission systems. That action came after FERC deadlocked 2-2 in October on the plan’s major elements, including membership rules and structure. The deadlock allowed the SEEM proposal to take effect.
In its November action, FERC approved the addition of non-firm energy exchange transmission service (NFEETS) to the open access transmission tariffs of a handful of SEEM utilities. Under the service, SEEM members can buy and sell electricity to each other in 15-minute blocks using available transmission capacity at no cost.
In a statement following his October vote opposing the SEEM plan’s structure, FERC Chair Richard Glick said that he shared Commissioner Allison Clements’s concerns over transparency and the potential for the exercise of market power and manipulation.
Glick said, however, that he thought that FERC’s monitoring capabilities, enforcement authority, and ability to institute an action under section 206 of the Federal Power Act offer adequate protections “should any Southeast EEM members or participants engage in any conduct that may transgress the FPA or Commission regulations.”
Other founding members of SEEM are expected to include Associated Electric Cooperative, Dalton Utilities, Dominion Energy South Carolina, Duke Energy Carolinas, Duke Energy Progress, Georgia System Operations Corporation, Georgia Transmission Corporation, LG&E and KU Energy, MEAG Power, N.C. Municipal Power Agency No. 1, NCEMC, Oglethorpe Power Corp., PowerSouth, Southern Company and TVA.
The founding members represent nearly 20 entities in parts of 11 states with more than 160,000 MW (summer capacity; winter capacity is nearly 180,000 MW). These companies serve more than 32 million retail customers.
The Southeast region had operated as a traditional wholesale electricity market. Trading occurred bilaterally under wholesale power sales contracts. Those trades generally occurred on an hourly basis as the shortest increment, and usually only among entities in the same or directly interconnected balancing authority areas. Parties relied on phone or electronic communication tools to negotiate terms of sale, arrange for transmission service, and schedule delivery.
Glick said the SEEM represents a “step toward modernizing this antiquated approach.” The plan would establish a new automated electronic trading platform designed to facilitate bilateral trading in the Southeast region. The platform would use an algorithm to match willing buyers and sellers for 15-minute transactions, facilitated by a zero-charge transmission service offered by participating transmission providers. Under the Agreement, NFEETS would be available to all participants on the same terms.