Commissioner Goldsmith Romero Says AI Can Improve Energy Delivery

Steven Lofchie Commentary by Steven Lofchie

CFTC Commissioner Christy Goldsmith Romero described ways in which the United States can strengthen the resilience of the power and derivatives market against severe climate events.

In prepared remarks before the CFTC Energy and Environmental Markets Advisory Committee, Ms. Goldsmith Romero emphasized the need for a "coordinated approach across the government" to address risks of energy sector vulnerabilities due to extreme weather. She highlighted a recent Executive Order directing agencies to report ways to leverage artificial intelligence ("AI"). She described AI's potential to improve electric grid infrastructure and secure electric power (see previous coverage). She also underscored the importance of (i) properly regulated markets to reduce power prices for households and (ii) improving derivatives markets to manage risks of major projects (such as offshore wind turbines) to hedge risks against changing interest rates. She said that these efforts would serve to achieve "cleaner and more resilient" power markets.

Ms. Goldsmith Romero encouraged the CFTC to examine market forces and trading activities that might be associated with spikes in power and energy prices during the winter. She reiterated previous calls for the CFTC to do "deep dive" studies where there is extreme volatility or spikes in prices.

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