President Obama recently nominated former Colorado Public Utilities Commission chairman Ron Binz to succeed Jon Wellinghoff as the next chairman of the Federal Energy Regulatory Commission. Like Mr. Wellinghoff, Mr. Binz spent time as a consumer advocate, serving as director of the Colorado Office of Consumer Counsel. Mr. Binz also shares Mr. Wellinghoff's enthusiasm for demand response ("DR"), which incentivizes customers to reduce electricity demand during periods of peak usage. "[The Colorado Public Utilities Commission] treated DR and EE [energy efficiency] very much like generation resources, requiring the utilities to list it on their "Loads and Resources" table, right there with the gas turbines," Mr. Binz said in an interview with the Association for Demand Response + Smart Grid. Mr. Binz sees demand response and energy efficiency as "important compliance channels for coming new EPA carbon regulations for existing utility generation resources."
Indeed, the FERC's current top priorities—natural gas and electric coordination, smart grid, demand response, integration of renewables, and transmission planning and cost allocation—are consistent with Mr. Binz's prior initiatives as a state commissioner. While Mr. Binz was Chair, the Colorado Public Utilities Commission implemented a 30 percent Renewable Energy Portfolio Standard and the Clean Air-Clean Jobs Act, which offered incentives for closing coal-fired power plants and switching to natural gas.
Mr. Binz is also on record as supporting a federally mandated carbon market to combat global warming. In a paper Mr. Binz recently coauthored, he opined that the absence of a coherent federal energy and climate policy was an impediment to progress on the challenges facing the electric industry but argued that "much can be done within existing law at the state level to improve outcomes in electricity markets." The paper suggests three areas in which the electric industry and its regulators could make substantial progress: risk-aware regulation, regulatory models that respond to changing utility business models, and reforms in wholesale market structures. The paper discusses the first two areas in detail but leaves the third area for a "future article." Given that one of FERC's core responsibilities is to regulate wholesale electricity markets, Mr. Binz's views on reforms in wholesale market structures may get expressed through new regulations.