FERC urged protect consumers and the environment when designing reactive power market

Nine states are represented, including seven Democratic AGs (led by) Connecticut AG William Tong, submitted a comment letter to the Federal Energy Regulatory Commission urging the FERC to enhance environmental justice and ratepayer protections and adopt clean energy policies in designing a reactive power market—a market in electric power used to move electricity through the grid to respond to uneven demand and prevent blackouts. Insufficient reactive electricity was the cause of the blackout that occurred in 2003 in Northeastern and Midwestern U.S.
The Letter was submitted in response to a Notice of Inquiry entitled “Reactive Power Capability Compensation,” which is a step in changing the rules by which electric power generators are paid to provide reactive power. In the letter, FERC argues that when creating a reactive market and changing the compensation structure to provide reactive power, FERC should be careful not to burden ratepayers by imposing unreasonable costs or risks. Further, FERC should ensure that any changes in the compensation structures do not conflict state clean energy policies. Currently, renewable energy resources are not able to provide reactive power.
The letter also notes that much of the nation’s energy infrastructure is located in disadvantaged communities and urges the FERC to take into account environmental justice considerations in its market design.