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.” In fact, the study finds 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, entitled "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, even “implying that membership in an RTO impedes the development of the wind resource.” 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 fly in the face 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.” This claim that the restructured wholesale markets better promote renewable energy has been frequently repeated by the generators reaping supra-competitive profits from these markets and by the RTOs themselves. To validate this claim, supporters cite statistics superficially implying a causal relationship between RTOs and renewable productions, but provide no supporting data or analysis.

“This is just another smokescreen designed to divert attention from the fundamental failure of RTO-run markets to protect consumers from unjust and unreasonable prices,” said APPA President and CEO Mark Crisson. “Important decisions regarding the future of wholesale electricity markets must be based on sound analysis and methodologies, coupled with available and transparent data—such as in the Lave/Spees study—not by self-serving assertions made in ‘open letters’.”