January 16, 2008—A recent study conducted by the Carnegie Mellon Electricity Industry Center finds that “there is no evidence that membership in an RTO (Regional Transmission Organization) promoted the development of renewables.”
The study found that when the variable of RTO participation was isolated from other factors (such as state requirements for renewable production), there was no relationship between RTOs and renewable energy development and a “negative correlation” between RTOs and wind energy. The study was partially funded by the American Public Power Association’s (APPA) Electric Market Reform Initiative.
The study, titled Do RTOs Promote Renewables? A Study of State-Level Data over Time, explores the relationship between state membership in a RTO and the production of electricity from renewable energy sources. The authors, Lester Lave and Kathleen Spees, use statistical methodologies to isolate the effect of RTO membership from other factors influencing the development of renewable resources, such as state policies, resource availability and electricity prices.
The results indicate that a state’s membership in an RTO is not a significant factor in renewable energy development. A number of other resources available in those regions, such as geothermal, wood and waste biomass were largely developed before the formation of RTOs.
The study’s conclusions are the opposite of a February 2007 open letter to the Federal Energy Regulatory Commission (FERC) from 22 organizations, many of which are supporters of renewable energy, asserting that “independent regional transmission operators such as Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) not only can promote electric system reliability and wholesale competition, they can also facilitate renewable energy and demand response development.”
For more information, see the APPA Web site.
