Managing Principal Susan Tierney Discusses the Need for Centralized Capacity Market Reform

November 20, 2013

As part of a technical conference hosted by the U.S. Federal Energy Regulatory Commission (FERC), Managing Principal Susan Tierney discussed the future of centralized capacity markets during a panel session with stakeholders in the electricity industry. FERC's technical conference, Centralized Capacity Markets in Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs), was held on September 25, 2013. The event gathered industry experts to discuss and consider how current centralized capacity market rules and structures in the United States are supporting the procurement and retention of resources to meet future reliability and operational needs.

Dr. Tierney filed a written statement and responded to questions during the "Considerations for the Future" panel session, which gave RTOs and ISOs an opportunity to discuss the adequacy of these markets and respond to panelists' comments. In her statement, Dr. Tierney stressed the importance of the electric industry and explained the need for reforms that allow systems to send appropriate price signals to suppliers of wholesale power, taking into consideration the particular public policy requirements of the electric industry. "The system must operate according to laws of physics, politicians, courts, and markets," Dr. Tierney explained. "Often we take for granted that investors will support the system that we want and need. But to sustain their interest, we need to make sure that the dollars and cents add up, as we hope for a system that evolves with the needs of the 21st century. Reforms in wholesale capacity markets should be part of the change."

She has also presented on related topics to the Independent Power Producers of New York at their Fall conference on September 10, 2013, and to the Keystone Energy Board on October 30, 2013.

Read Dr. Tierney's FERC statement