The Federal Energy Regulatory Commission has proposed a new rule giving it the authority over wholesale electric markets rules and encouraging state and regional power grid operators to set carbon prices as a way to accelerate the growth of clean power, Kallanish Energy reports.
The proposed policy statement by FERC was hailed as landmark action by the federal agency by some.
The action comes as states across the country move to deal with climate change, adopting carbon pricing, something that is not happening at the federal level.
FERC said it would not interfere with states that set carbon taxes or fees to reduce emissions.
Currently, 11 states impose some version of carbon pricing and other entities include the regional markets are looking at such an option.
In effect, the FERC action reassures states and regional operators that the federal agency will not reject carbon pricing plans.
The agency said its action was not an effort to set a federal carbon price.
Last month, FERC held a technical conference and heard testimony about carbon pricing.
“Today’s action is no small feat,” said Chairman Neil Chatterjee in a statement. “…However, we’ve taken on a really complex issue, looking at it just within our jurisdictional boundaries and we’ve found sensible areas of agreement,” he said.
Chatterjee added, “As state seek to reduce greenhouse gas emissions within their regions, carbon pricing has emerged as an important, market-based tool that has wide support from across sectors.”
Such rules imposed by states and grid operators “could improve the efficiency and transparency of the organized wholesale markets by providing a market-based method to reduce GHG emissions,” he said.
FERC is accepting comment on its proposal until Nov. 16. Reply comments are due by Dec. 1.
This post appeared first on Kallanish Energy News.