Biden-Harris Administration Invests $9 Million to Support State Participation in Wholesale Electricity Markets, Reducing Energy Costs

Wholesale Electricity Market Program to improve state and regional engagement in wholesale electricity markets.

The U.S. Department of Energy (DOE) today announced a $9 million investment to improve state and regional participation in wholesale electricity markets. Engaging state and regional utilities and system operators in wholesale markets can decrease their cost of electricity, often lowering energy bills for consumers. Administered by DOE’s Grid Deployment Office, the Wholesale Electricity Market Studies and Engagement Program (WEMSE) will provide technical and financial assistance to states and regional system operators to develop, expand, and improve wholesale electricity markets. This engagement will ensure these stakeholders are able to provide critical insight into market design, expansion, and improvement activities, including interregional transmission infrastructure development.

“Enabling state and regional participation in creating and improving wholesale electricity markets is a critical step towards delivering on President Biden’s goal of ensuring all communities have access to affordable, reliable, 100% clean electricity,” said Maria Robinson, Director, Grid Deployment Office. “Creating efficient and flexible wholesale markets that will support a more resilient grid will be integral as our electricity needs expand and renewable resources come online. Efficient, fair, and transparent markets are an important as we transition to a clean, reliable, equitable electric grid.”

Currently, wholesale markets regulate the buying and selling of electricity from producers, such as a solar farm or hydroelectric facility, to operators including state and regional transmission operators (RTOs), independent system operators (ISOs), and private utilities. These RTOs, ISOs, and private utilities then sell the power to consumers. Today, two-thirds of the country’s consumers are powered by electricity purchased through wholesale markets where pricing is based in supply and demand and rapidly fluctuates throughout the day—fluctuations that in turn ripple down to affect consumer energy bills. As more clean and renewable resources come into the market creating more flexible and efficient markets would not only ensure a reliable supply of electricity, but also help keep prices low for consumers. Regional and state-level utilities have valuable perspectives on how to improve markets to address this, but many currently lack the resources or training to meaningfully participate in market development. This new funding opportunity aims to address this challenge.

The Wholesale Electricity Market Studies and Engagements Program (WEMSE) provides states and regions with technical and financial assistance related to developing, expanding, and improving wholesale electricity markets. Activities under this program could include performing analytical studies on critical market issues, convening stakeholders, or increasing a state or region’s capacity to engage in market design reform efforts and stakeholder planning processes at a regional level.

Private industry and national labs who receive funding through this program are required to collaborate with a state or regional system operator, or a coalition of states or regional organizations. Applications for proposed development or deployment of technologies (e.g., electric generation, transmission or distribution innovations to be deployed on the grid) will not be considered.

The WEMSE program will include three rounds of funding. Concept papers for the first round of WEMSE funding are due on November 3, 2023, 5:00 p.m. ET. Subsequent rounds of funding will open in 2024.  The multiple rounds of funding are intended to afford states, market operators, and other wholesale market stakeholders the time to develop coalitions and coordinate joint applications as appropriate.