Across the United States, retail electricity prices are projected to rise, with utilities requesting a record $31 billion in rate increases in 2025. While the Southeast has historically had lower electricity prices than regions such as California or New England, southeastern residential energy bills rank above the national average — and can be among the highest in the country — largely due to household electricity demands for cooling.
These costs are expected to climb as demand grows from manufacturers and data centers, aging infrastructure needs replacement and increasingly severe weather disrupts the grid and drives up recovery costs. In February 2026, for example, Georgia Power requested permission to increase its storm damage recovery funding to cover a $912 million deficit over the next four years.
Consumers and policymakers alike are looking for ways to contain costs without compromising service reliability. One solution is to increase grid efficiency by leveraging competition and regional coordination to better utilize the lowest-cost energy generated across the region. In the Southeast, where vertically integrated monopoly utilities operate within individual utility footprints, opportunities to coordinate regionally and take advantage of competitive mechanisms are limited. Historically, utilities in the region have engaged in bilateral trading across footprints. Long-term bilateral contracts play a role in resource planning processes, while shorter-term transactions are often used to address system needs. However, these bilateral arrangements yield significantly less pricing transparency than competitive markets.
The launch of the Southeast Energy Exchange Market (SEEM) in 2022 aimed to improve the existing system by introducing a voluntary, intra-hour bilateral energy trading platform. While a step in the right direction, SEEM has so far failed to deliver significant cost savings, leaving the Southeast behind the rest of the U.S. in adopting more efficient market structures. This article explores SEEM’s shortcomings and offers policy recommendations to reduce costs and improve efficiency for southeastern electricity consumers.
What Is SEEM?
SEEM is a platform that allows utilities to buy and sell electric power with one another. Participants can offer to sell electric power or bid to purchase it at specified prices and quantities — for example, offering to sell 40 megawatts (MW) for $30 per megawatt-hour (/MWh) or bidding to buy 20 MW for $10/MWh. Utilities that own transmission infrastructure (i.e., participating transmission providers) make unused transmission capacity available to the SEEM network at no cost to trading participants.
In determining which bids and offers to match, the platform seeks to match the lowest-priced offers with the highest-priced bids to maximize savings for buyers and the revenues for sellers. It also verifies whether there is enough transmission capacity between a buyer and a seller to facilitate a trade and accounts for energy losses that occur from moving power over multiple transmission owners’ grids. When the platform matches an offer to a bid, it automatically executes a trade between the two participants. The price of the transaction is set at the midpoint between the offer price and the bid price — an approach known as “split-the-savings pricing.” This trade occurs every 15 minutes, around the clock, every day of the week. Both the offering and bidding participants are financially responsible for delivering and receiving the agreed electricity and can face financial penalties if these terms aren’t met.
Given these features, SEEM sits toward one end of a broad continuum of competition of electricity market structures, ranging from pure bilateral trading (to which SEEM adds a simple layer of automation) to the centralized dispatch energy auctions used by Regional Transmission Organizations (RTOs), like ERCOT and ISO New England. Introducing more competitive mechanisms and increased regional coordination lowers costs for consumers by improving real-time efficiency and reducing the need for costly system overbuild to ensure resource adequacy.
While SEEM is a step toward more competitive markets, some of its other features — particularly its governance and transparency — limit the benefits it can deliver for consumers. SEEM’s governance structure gives significant advantages to the southeastern transmission-owning utilities that participate in the market while giving other participants no say in SEEM’s operations whatsoever. These utilities hold exclusive authority to propose rule changes and vote on those changes, with voting power weighted toward a few large utilities.
SEEM also offers limited transparency to state regulators, especially in three particular aspects. First, while SEEM is required to file some market participation data to FERC, it doesn’t need to file similar data to state public utility commissions or other state government agencies. Second, SEEM publishes certain aggregated data about overall market outcomes on its website (accessible only to registered users), but these data are not very detailed; only after FERC approved a recent settlement has SEEM begun posting its hourly average price. Third, while SEEM retains a consulting firm to perform the role of “independent market auditor,” this role is accountable only to the SEEM utilities and has limited authority. The market auditor can only respond to inquiries from state regulators and market participants regarding “the integrity of the matching process,” and responses must be confidential under most circumstances.
SEEM’s Origins: The Southeastern Utilities’ Nuclear Cost Challenges
Interest in greater electricity market competition took hold in the southeast in 2017 after two South Carolina utilities, SCANA and Santee Cooper, halted construction of two new nuclear power generators at the V.C. Summer power plant due to escalating costs and delays. Billions of dollars had already been spent on the project — yet despite the project’s cancellation, ratepayers will continue paying off those costs for years to come. Similar cost overruns affected nuclear projects in Georgia, where Georgia Power’s Vogtle plant, which became operational in 2024, ran billions over budget and years behind schedule.
These cost overruns, and the burden they place on southeastern electricity consumers, sparked discussion among regional policymakers about embracing electricity market competition to control costs. A growing body of studies explored alternative market designs, while policy experts widely agreed that more competition among the region’s utilities was needed to improve affordability and service innovation for southeastern electricity consumers. They published several articles analyzing potential market designs for the Southeast.
Large utilities in the Southeast pushed back against these proposals for greater market competition. In North Carolina, Duke Energy worked to defeat several legislative proposals that would require studies of alternative market designs, supporting a media campaign labeling one popular type of market design — the “Regional Transmission Organization” (RTO) — as a “Really Terrible Option.” Yet while fighting the emerging policy proposals for more competitive markets, the large utilities in the Southeast began developing their own ideas and approach to market reform, which would eventually become SEEM.
SEEM’s Origins: FERC Approval and Litigation
SEEM was conceived and developed by major southeastern utilities behind closed doors, and proposed to FERC in February 2021, which kicked off a lengthy and strongly contested proceeding over the next several years. While SEEM was initially approved by FERC in October 2021, the approval only came about as the result of rules requiring FERC to approve proposals when its commissioners are split 2-2 — which, in SEEM’s case, they were. Following that approval, SEEM launched operations in November 2022, even as litigation over its legality continued before the U.S. Court of Appeals. And despite SEEM’s launch, in July 2023 the court remanded the case to FERC, requiring it to provide an actual justification for the approval.
In its remand, the court also required FERC to address several issues at the heart of criticisms against SEEM. Critics argued that SEEM’s design would hinder competition by creating transmission discounts for market participants within member utilities’ territories. Outside buyers and sellers could still trade with participants inside those territories, but they would need to pay full cost for the transmission used.
In its 2025 response, however, FERC doubled down on its approval, arguing that territory-based restrictions were no longer a concern because utilities had agreed to allow outside participation via “pseudo-ties.” Pseudo-ties had previously only been achieved in markets with centralized dispatch, a feature that SEEM purposely lacks, and prior testimony had shown pseudo-ties to be expensive relative to SEEM’s market size. Nevertheless, SEEM’s opponents did not protest or appeal FERC’s final decision, and the market continued operations.
SEEM Leaves Benefits on the Table
SEEM utilities claimed that their platform would achieve $40 million per year in cost savings, based on a 2020 study by consulting firms Guidehouse and Charles Rivers Associates. Under the study’s most optimistic scenario — which featured aggressive renewable energy and battery storage deployment — projected savings began at $40 million per year in 2022 and reached around $139 million per year in 2037.
These numbers are modest compared to the savings projected under more competitive market designs. Energy Innovation LLC projected $384 billion in cumulative net benefits between 2020 and 2040 from a fully competitive wholesale electricity market in the Southeast, while Vibrant Clean Energy forecast between $103 billion and $119 billion in cumulative savings over the same period from more advanced market designs such as RTOs and Energy Imbalance Markets (EIMs). Nevertheless, the SEEM utilities stood by the Guidehouse and Charles Rivers Associates estimates and included them in their proposal to FERC as part of SEEM’s justification.
Since its launch in 2022, however, SEEM has underperformed both forecasted trading volumes and cost savings even relative to the Guidehouse and Charles Rivers Associates estimates. While trading volumes have increased steadily since inception — from a monthly average of 51,000 MWh in its first year to 107,000 MWh in 2025 — volumes still fall short of anticipated market usage. SEEM was expected to trade on the order of 1,000,000 MWh as a monthly average in its first year, meaning it achieved just 5% of projected volumes. Even with increased trading volumes as of 2025, SEEM is only delivering approximately 11% of the volumes initially projected.
Lower trading volume has translated directly into lower-than-expected customer savings. SEEM reports around $22 million in cumulative benefits since its launch, an average of $7.1 million per year. In its first year, SEEM only generated approximately $3.3 million in regional benefits, or 10% of the lowest estimate of projected savings. While benefits have increased over time as the market matures, they remain a fraction of what was projected.
SEEM’s benefits pale in comparison to other markets across the country. Benchmarking against the Western U.S. — the only other region without an RTO — shows that SEEM is delivering a fraction of the market benefits. The Western Energy Imbalance Market (WEIM) delivered savings of $0.28/MWh of load to the region in its first year of operation in 2016. By 2025, WEIM was delivering savings of $2.13/MWh of load. By comparison, SEEM delivered savings of $0.01/MWh of load in 2024 and 2025 and, in its first years of operation, may have cost more money to operate than provided benefits. These unrealized benefits translate directly into missed savings for customers.
SEEM has underperformed as a tool for market efficiency and customer cost savings. While operational data shows slow, steady increases in utilization and benefits, the platform still faces structural limitations. Stakeholders should consider the constraints that are limiting greater cost savings and system reliability and explore solutions to improve market performance.
One constraint is SEEM’s design as a bilateral trading platform, which restricts trading between individual parties rather than optimizing transactions on a regional scale, as more advanced markets do, such as those in the Western U.S. Addressing this issue would require a shift toward more dynamic, real-time and regionally optimized market structures.
A Roadmap for Leveraging SEEM to Drive Down Costs in the Region
SEEM is not delivering notable cost savings to consumers, and under its current market design and structure, it is unlikely to do so even as the market matures. We identify several pathways for stakeholders to consider that would evolve SEEM to drive market utilization and unlock greater cost benefits. Each of the following actions is voluntary and opt-in, and utilities would retain responsibility for generation and transmission planning and management within their jurisdiction. However, these changes would allow for greater use of competitive market mechanisms to put downward pressure on electricity prices.
- Improve access to and transparency of SEEM data. While SEEM releases some summary data and reports, access to utility-specific data, such as trading volumes and realized benefits, remains limited and inconsistent. Some utilities within SEEM report these data to their state public utility commissions, but others do not. Establishing a standard, uniform process for member reporting on customer savings and improving public access to more granular transaction data would be a critical step toward greater transparency, a better understanding of market characteristics and more informed market evolution.
- Create forums for Southeast policymakers, utilities and regulators to discuss regional challenges and priorities. Creating collaborative forums for policymakers and regulators to discuss state-level challenges and priorities can drive regional solutions with robust stakeholder buy-in. States in the Western U.S. have held regional and collaborative convenings for many years, spurring utilities and policymakers to move toward regional market designs with additional functionalities and opportunities to facilitate trades. However, the Southeast currently lacks dedicated and reoccurring spaces for key stakeholders to convene, discuss and move toward mutually beneficial solutions. The absence of these forums may be a key hurdle toward market evolution and regional cost savings.
- Include states in SEEM governance. SEEM is governed by its members, all of which are regional utilities. The governance structure does not include any independent board members or representation from regulators or stakeholders. This is unlike other markets across the country and may limit opportunities for market evolution. SEEM could introduce a role for nonmembers, such as state regulators, to advise on or oversee parts of the platform. Similar models exist elsewhere, including the Body of State Regulators (BOSR) for the WEIM and the Regional States Committee (RSC) in the Southwest Power Pool (SPP). Greater nonmember input may support the analysis of market functionality and the opportunity to enhance market efficiency and utilization.
- Expand the SEEM platform to drive cost savings. To increase transactions, and therefore cost savings, participants could be required to leverage automated dispatch processes for bids and offers. Another opportunity is to allow renewable resources owned by independent power producers (IPPs) to sell curtailed (intentionally reduced) energy into SEEM, benefiting both regional IPPs and overall system costs. Which modifications are adopted should be guided by greater data transparency, collaborative stakeholder forums and a formal state role in governance.
- Evolve SEEM to more sophisticated market designs. SEEM’s bilateral trading platform structure limits its ability to identify and dispatch the lowest-cost energy generation across the region. A more advanced market design, such as an EIM or an Extended Day-Ahead Market (EDAM), would replace a bilateral model with a central market operator optimizing energy exchange — in real-time and day-ahead, respectively — across the full region. Western markets have already shown significant cost savings from these types of markets.
Next Steps for SEEM
Since the launch of SEEM in 2022, the region has seen slow but steady growth in market participants, energy trading volume and associated customer savings. However, those savings have fallen significantly short of expectations. Without momentum for collaborative regional discussions and market evolution, SEEM will continue to leave benefits on the table for systems and customers in the Southeast.
SEEM could be improved to enhance customer savings through better access to market data, stronger stakeholder buy-in and collaboration, including among market participants and state regulators, and consideration of market changes to increase trading volumes. At a time of rising energy demands, affordability concerns and increasing grid stress from natural disasters, the Southeast cannot afford to overlook improving SEEM as a solution.
