Environmental Groups Reach Settlement with Utilities on Southeast Energy Exchange Market

Today, a coalition of Southeastern environmental groups, represented by the Southern Environmental Law Center, and the Natural Resources Defense Council, represented by Earthjustice, reached a settlement agreement with Southeast Energy Exchange Market (SEEM) members, including Southern Company, Duke Energy, and others. If approved, the settlement would fully resolve the groups’ lawsuit to set aside orders issued by the Federal Energy Regulatory Commission (FERC) approving SEEM that is pending before the U.S. Court of Appeals for the District of Columbia Circuit.

The settlement would require SEEM, a market offering free transmission service for buyers and sellers of wholesale electricity, to publicly post the average price data for SEEM transactions every hour as part of the market’s regular reporting. This agreement would increase transparency and provide important real-time information for potential market participants.

“The opportunity for real-time price discovery created by this settlement should make SEEM more competitive and allow independent power producers to more readily participate in the market.” said Maia Hutt, SELC senior attorney. “Over five million households in the South face a high or severe energy burden. Independent, clean energy producers must be able to buy and sell energy on equal footing with investor-owned utilities if we are going to bring down electricity costs for our neighbors and make clean, reliable, affordable energy available across the South.”

“At every step, our litigation has helped push SEEM towards increased accessibility and transparency” said Caroline Reiser, senior attorney for climate and energy with the Natural Resources Defense Council (NRDC). “This settlement is another critical step in the right direction. We will continue tracking market operations to ensure the southeast can meet new energy demands while fostering the growth of clean, affordable, reliable energy.”

“The market rules being implemented today are an improvement from the original proposal from major utilities that largely excluded smaller power generation, including clean energy,” said Alexander Tom, Earthjustice Senior Attorney. “These changes and increased transparency of the market’s average hourly prices will help SEEM deliver benefits to consumers, not just the monopoly utilities that founded the market. We will continue to advocate for ways to maximize the potential for regional cooperation to reduce electricity prices and deliver more clean energy.”

The settlement would conclude nearly five years of legal proceedings. In February 2021, several Southern utilities — including some of the largest in the country like Southern Company, Duke Energy, and Dominion Energy — filed a proposal with FERC to create SEEM, a voluntary platform for energy trading.

Concerned about the impact SEEM would have on customer bills and clean energy development in the South, SELC opposed the proposal on behalf of Energy Alabama, Sierra Club, South Carolina Coastal Conservation League, and others.

In late 2021, FERC failed to reach consensus on the proposed energy trading platform, resulting in the proposal taking effect by default according to federal law. Alongside other environmental and clean energy groups, SELC successfully petitioned for review of FERC’s actions in the D.C. Circuit, as the court remanded SEEM’s approval back to FERC for reconsideration.

The settlement would build upon changes to the market secured at FERC following the successful appeal. These subsequent proceedings led to the ability of entities located outside the SEEM footprint to participate in the market. By increasing price transparency, the settlement aims to further increase independent participation in SEEM. Since SEEM’s launch in November 2022, not a single independent power producer has participated in the platform; all trading has been conducted between the utilities that oversee the market and certain municipal utilities.

Aided by the transparency made possible by the settlement, SELC will remain vigilant to ensure SEEM works for the benefits of customers in the Southeast going forward.