10/06/2020 - Ari Peskoe

FERC urged to make way for carbon pricing

Tag: E&E News

Carbon pricing in regional wholesale power markets is a good if not necessary step to combat climate change and ensure reasonable rates for electricity customers. That was the consensus yesterday among 30 energy sector panelists who discussed the pricing mechanism before the Federal Energy Regulatory Commission. In an all-day, long-anticipated virtual conference, an array of academics, grid operators and utility executives discussed FERC’s legal authority, various designs for adding a carbon price in regional markets — and potential pitfalls… That could send a signal to states that they can develop carbon pricing programs without fear that FERC would reject those proposals, Dennis said…Experts on the first panel yesterday focused on FERC’s legal authority to implement carbon pricing in wholesale markets. Kate Konschnik, the director of climate and energy programs at Duke University, and Ari Peskoe, the director of the Harvard Electricity Law Initiative, agreed that such a policy is within the agency’s purview. “The Federal Power Act poses no fundamental obstacle to markets incorporating state carbon pricing,” Konschnik said. Peskoe said pricing carbon is not merely an environmental issue, noting financial regulators have warned about potential costs from failing to put a price on emissions. “No serious conversation about the future direction of the power industry ignores carbon emissions,” he said. “The commission has a duty to encourage the industry’s orderly development. It should not dismiss carbon pricing as someone else’s job.”

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