Controversial Southeast Energy Market to Launch in November

By Christian Roselund

On 9 November 2022, 23 electric utilities in the U.S. South will launch an electricity trading program limited to utilities that are its members. A 12 October 2022 filing with federal regulators has confirmed this date for the launch of the Southeast Energy Exchange Market (SEEM), even as legal challenges and questions about whether this violates the principle of open access remain.

SEEM has been building momentum since November 2021, when federal regulators approved transmission rules for the market. Since then the proposal has grown from 15 to 23 utilities, with several Florida utilities joining in the Fall of 2022.

SEEM would cover the service areas of these utilities, stretching from Kentucky to Florida and the Atlantic Ocean to Mississippi. Along with the Mountain West and Pacific Northwest, this is one of the last regions where both wholesale and retail electricity supply is still the domain of vertically integrated monopoly utilities and where there is no regional grid operator to oversee a
wholesale market.

The utilities participating in SEEM argue it will increase reliability. They also assert that it will lower costs for consumers by allowing utilities to buy lower-cost electricity from more efficient generation to serve their customers, while enhancing the value of wind and solar, thus allowing more renewable energy to come online. This final point has been supported by Shahriar Pourreza, an analyst with Guggenheim Securities, in a note to clients.

However, clean energy groups argue that SEEM can be used by investor-owned utilities in an anti-competitive manner, particularly against independent generators. National trade group Advanced Energy Economy has joined Southern Alliance for Clean Energy and Natural Resources Defense Council in opposing the measure. These parties have filed a lawsuit to stop SEEM from going into effect and the Electricity Law Initiative at Harvard Law has joined in, filing a “friend of the court” brief stating that SEEM violates the principle of open access to transmission systems.

News coverage: Southeast market set to shake up renewables in 12 states (E&E News)