An Integrated, Automated Intra-hour Energy Exchange
Frequently Asked Questions
We’re enthusiastic about leveraging new technology to benefit our customers and enhance how we can operate the growing number of renewable energy sources in the Southeast. We understand there is a process at FERC and the agreement between SEEM members is subject to FERC approval. We respect the federal regulatory process and are not presuming any outcome. At the same time, SEEM members are eager to deliver the expected value and savings to 32 million customers across the Southeast as soon as possible. We’d like to be efficient with this time to advance the logistics needed so we can move swiftly to bring customer benefits if FERC approves the more advanced platform.
No, regional transmission groups such as the Southeastern Regional Transmission Planning group and the South Carolina Regional Transmission Planning group will continue to exist and function independent of the SEEM.
No, the Southeast Energy Exchange Market is an energy-only market, and capacity transactions will continue among the parties as they do today. The market would not address capacity or long-term resource planning.
The available transmission capability to transfer power from one transmission system to a neighboring transmission system. An analogy would be that of a 6-inch pipe being able to deliver more water flow compared with a 1-inch pipe. Transmission lines are similar in that at a given voltage, a larger size transmission line can carry more power than a smaller transmission line over the same distance.
Only available, unreserved transmission of the participating transmission providers will be used for SEEM transactions. This process aligns with other intra-hour energy markets like the Western EIM and is critical to driving participation and the maximum benefits for customers.
As currently available today, the bilaterally-agreed transaction prices will be made available to the public via existing FERC reporting. Also as occurs today, specific transaction information will be shared only between buyers and sellers. Participants not party to a particular match will not see any data related to the match until such information is released publicly. In addition, SEEM will regularly post (daily, monthly and quarterly) reports of data aggregated by the SEEM platform on a public web site. This methodology is consistent with the existing bilateral market.
Yes, the SEEM can evaluate opportunities to improve or implement additional functions that make sense for our customers. For example, there may be opportunities in the future to leverage technology to implement five-minute time intervals.
We already have well-functioning day-ahead and forward bilateral markets, and this would not interfere with or alter those. The SEEM will provide an additional intra-hour energy trading platform that is automated, will bring value to customers and will help with managing increasing renewables.
A five-minute market would require a significant increase in implementation cost and would take much longer to set up. A 15-minute market timeline builds upon systems and processes that currently exist today to transact energy between different entities. The 15-minute market will allow for generation owners to keep control over the dispatch of their generation by initiating dispatch changes through meeting a standard e-tag block schedule. The five-minute markets that exist today are five-minute nodal SCED markets that send dispatch signals from a central, automated dispatch system to the participating resources.
No, while this market would share some of the same principles as an energy imbalance market (to assist with imbalances and reduce energy costs), it’s less complex, less costly and less time intensive compared with setting up an EIM. It also does not rely on centralized unit dispatch.
We expect customer savings to be realized through lower fuel costs as we’re able to select lower-cost and more efficient generation resources to serve customer demand. As sellers identify a use for their excess energy, those profits also benefit customers.
Entities with ability to sell wholesale power can do so today without this market. The SEEM would provide an automated, more efficient platform for intra-hour energy exchanges within the Southeast footprint. Importantly, this is for wholesale transactions. There will be no change in the energy company that provides your service or bill; that relates to retail sales.
A primary objective is to maintain the same level of jurisdictional control and oversight as currently exists, where applicable, while facilitating more interchange transactions that support the cost-effective use of a diverse resource mix. FERC will have oversight authority as it does today to ensure those transactions occur with just and reasonable rates, terms and conditions.
FERC approval is required to implement the SEEM. The FERC filing and approval process will provide an opportunity for the members of the SEEM to demonstrate the benefits of the proposed market design and for interested parties to provide feedback and comments for FERC to consider.
For the governance, each member will receive a weighted vote. Their weighted vote will correspond with the amount of operating costs allocated to the member. Membership will have the following requirements: entity must be one of the following: (i) a Load Serving Entity; or (ii) an association, cooperative or governmental entity created for the purpose of providing energy to cooperative or governmental Load Serving Entities (or the Retail Load Serving Entities being served by an association, cooperative or governmental entity).
Two third-party independent entities will implement, manage and oversee operation of the SEEM market: a platform administrator and an auditor. The platform administrator will be selected through a request for proposal process and will develop and administer the SEEM platform per market rules. The auditor will monitor the functioning of the platform to ensure it operates correctly per market rules and has authority to submit reports without prior review or approval of SEEM members. FERC provides oversight for all wholesale bilateral transactions, including SEEM activity, and all FERC public reporting (e.g., EQR) must continue. In addition, SEEM will regularly post (daily, monthly and quarterly) reports of data aggregated by the SEEM platform on a public web site.
Similar to other US markets, market rules must be established to ensure orderly and structured operations to protect continued reliability. Registration ensures that minimum qualifications for being a source or sink are met. Entities with generation or load that can participate in wholesale bilateral markets today will be able to participate in the market. A market participant must be registered as a source or sink in NAESB EIR registry, the source or sink must be interconnected to a participating transmission provider, and the participant must be able to bid/offer for a 4 MW or greater 15-minute schedule. Entities that meet the minimum qualifications, including Independent Power Producers, may participate.
Feedback helped strengthen the platform agreement by adding more transparency measures. Outside of very specific technical or market-function questions, stakeholder feedback fell into the following major themes: market participation, governance and transparency, and stakeholder processes.
- Market participation: There were many questions about the ability of Independent Power Producers (IPPs) to participate in SEEM. An IPP that complies with the following criteria may participate in SEEM: own or control a valid source or sink within a SEEM territory, execute a SEEM participation agreement, execute required transmission service agreements with participating SEEM transmission service providers, and have an agreement to purchase or sell energy with at least three SEEM participants.
- Governance and transparency: Two third-party independent entities will implement, manage, and oversee operation of the SEEM market: a platform administrator and an auditor. The platform administrator will be selected through a request for proposal process and will develop and administer the SEEM platform per market rules. The auditor will monitor the functioning of the platform to ensure it operates correctly per market rules and has authority to submit reports without prior review or approval of SEEM members. FERC provides oversight for all wholesale bilateral transactions, including SEEM activity, and all FERC public reporting (e.g., EQR) must continue. In addition, SEEM will regularly post (daily, monthly and quarterly) reports of data aggregated by the SEEM platform on a public web site.
- Stakeholder processes: Stakeholder outreach and engagement will continue as SEEM moves forward. SEEM members will hold annual public meetings open to all interested parties as an open forum for stakeholders to address any issues they may have with the SEEM. The intention is to continue the robust dialogue with stakeholders that took place during the initial SEEM development period. Stakeholders will also have the opportunity to comment on SEEM-related FERC proceedings with rate amendments filed with FERC.
SEEM members spent the summer and fall of 2020 discussing plans for the market structure with stakeholders across the 11-state region. We talked with numerous energy regulators, policy makers, consumer advocates, non-governmental organizations, energy associations, solar developers and business customers. Our intent was to educate key entities about the concept and use those questions and input to inform the structure that we’d propose in state and FERC filings.
While this energy market is not a requirement to reaching carbon goals, it would further these companies’ ability to advance those goals. An addendum study estimated carbon emissions reductions for the SEEM region under operating conditions to be 570,000 metric tons annually for the IRP Baseline Outlook and 790,000 metric tons annually for the Carbon-constrained Outlook. These SEEM-influenced carbon reductions are achieved through more efficient generation displacing less efficient generation and by avoiding renewable curtailments. The SEEM reduces carbon emissions and supports renewable energy integration but does not have as much impact as utility resource plans do on overall carbon emissions levels. These estimates depend on the number of member companies that ultimately join.
An independent third-party consultant performed a high-level evaluation to determine if this concept was worth advancing to members, stakeholders and regulators. Its assessment estimated the total production cost savings to be from approximately $40 million to $50 million annually in the near-term, to $100 million to $150 million annually in later years as more solar and other variable energy resources are added. These estimates depend on the number of member companies that ultimately join.
Each participating company will have internal incremental startup and ongoing costs as well as EEM-allocated startup and ongoing costs it will be responsible for. Examples of these costs include: 1) internal incremental labor and materials, external consultants, initial and ongoing maintenance for servers, as well as the costs for existing labor, and 2) shared costs, such as legal fees, vendor platform license and maintenance fees, and independent auditor fees.
In the June 2021 response, the SEEM members offered changes to the platform agreement covering four different areas:
- A weekly, confidential submission of market data to FERC. This will provide FERC with greater oversight ability to monitor for market power or market manipulation.
- Concrete rules for access to information by FERC, other regulators, and market participants. This includes processes for publicly posting Auditor reports, as well as questions the Administrator and Auditor receive from regulators and the respective answers.
- Protections for neighboring transmission systems. The changes offered clarified that data on available transmission capability must be provided by Participating Transmission Providers to the Administrator and must be used in the SEEM Algorithm for matching of transactions. This provides full protection to neighboring transmission systems against intentional, unauthorized use of their transmission facilities.
- Revised standards of review for challenges to the SEEM Market Rules. The proposed changes ensure that, if FERC and other market participants were to challenge the Market Rules in the future, their challenges will be judged based on FERC’s just and reasonable standard and will not have to overcome the higher public interest standard.