Abstract
It is often argued that markets can solve anything, and market-based policies have steadily crept into many of the policies that affect our everyday lives, especially when it comes to energy regulation. For years, the Federal Energy Regulatory Commission (FERC) has increasingly used a market-based rates strategy to spur investment in energy infrastructure.
However, market-based rate policies have been wholly inadequate to spur this investment in infrastructure, particularly in transmission infrastructure and promoting efficiency, and alternative approaches should be used to accomplish these goals. This Comment will take a look at the history and theoretical underpinnings of market-based rates before explaining the necessary market tests necessary for authorized use of market-based rates by utilities, as well as the future of FERC following Montana Consumer Counsel v. Federal Energy Regulatory Commission. This Comment will then show how market-based rates strategies have fallen short of their stated goals and argue that a more efficient way to spur investment in infrastructure is (1) to return to a vertically integrated model of energy transmission, (2) permit utility-only ownership of power generating holdings, and (3) achieve significant government investment in energy transmission infrastructure.
Recommended Citation
Andrew Laquet,
The Role of Government in Energy Markets: A Look at the Market-Based Rates Process, the FERC, and the Future of Energy Markets in America,
37
S. Ill. U. L.J.
395
(2013).
Available at:
https://opensiuc.lib.siu.edu/siulj/vol37/iss2/5