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Considerations for State Regulators and Policymakers in a Post-FERC Order 745 World

Considerations for State Regulators and Policymakers in a Post-FERC Order 745 World

By Peter Cappers and Andy Satchwell

State regulators and policymakers should act now, while demand response is under judicial review, to develop contingency plans to ensure resource adequacy is not jeopardized and that DR remains a robust and economic resource for meeting electricity needs.
 
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y vacating FERC Order 745 in Electric Power Supply Association vs. FERC (“EPSA”)  , the U.S. Court of Appeals for the D.C Circuit injected uncertainty into the future of demand response (DR) resources in U.S. wholesale markets.  Among several things, the decision explicitly identified “incentive-responsive demand” as a retail transaction, not a wholesale transaction.  Thus, demand response, as the industry has come to understand it within the confines of ISO/RTO-administered energy markets, is not under FERC jurisdiction but rather state jurisdiction.  However, if the Court of Appeals’ majority arguments are taken to their logical conclusion, then FERC may not have jurisdiction over DR providing any bulk-power system service, not just energy.

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The Shape of Things to Come: Net Demand

The Shape of Things to Come:  Net Demand

By Bentham Paulos

As wind and solar mature commercially they have novel effects on power system operations, planning, and finances.  With Germany and California in the vanguard, policy solutions are emerging. But to best pursue a clean energy future, we first must change the way we look at our power systems, starting with the daily load profile. 
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he growth of wind and solar power are introducing a new element into grid operations, and changing the way grid operators look at the system.  Indeed, they are changing the familiar daily shape of the demand profile.

 

If you would like to obtain a complimentary PDF file of Mr Paulos's article on Net Demand, and were unable to sign up for a 30-day free trial to Electricity Daily and ElectricityPolicy.com, please email your request to [email protected].

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A Huge Distribution Opportunity

A Huge Distribution Opportunity

By Paul J. Feldman

The economic cost of outages to electricity customers amounts to nearly one-third of the revenues those customers pay for service, and the problem lies almost entirely with the distribution system.  Fortunately the tools to address this situation are available, if utilities, state regulators, vendors—and customers—can cooperate on a needed fix.
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n 2013 end-use electricity customers in the U.S. paid some $364 billion to their suppliers for electricity service.   The economic cost of outages that customers experienced in that year, however, amounted to approximately $112 billion, not including the full cost of outages that were attributable to extreme weather.   That failure of service represents $1 loss to an end customer for every $3 the customer pays for service.

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What can (or should) we take away from Germany’s renewable energy experience?

What can (or should) we take away from Germany’s renewable energy experience?

By Jürgen Weiss

Germany’s transition from nuclear and coal-fired generation and toward greater reliance on renewable resources and efficiency thus far has been mostly positive in terms of system reliability and maintaining a strong economy.  The US would do well to follow developments there carefully. 
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ermany has committed itself to closing its remaining nuclear power plants by 2022 and to essentially eliminating fossil fuels from its power sector by 2040-2050. To implement the latter, Germany has been aggressively supporting the deployment of renewable energy since about 2000. With over 37 GW of solar PV, Germany is now the world leader in installed capacity, one of the top countries with respect to renewable capacity in absolute and relative terms more broadly, and more or less on track to meet its goals.

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Nuclear Winter

Nuclear Winter

By Robert McCullough, Garrett Oursland, and Rose Anderson

The problems facing the nuclear industry are national in scope and appear to be enduring in effect. Only a major change in the economics of the industry is likely to avoid market-based nuclear plant closures in years to come.

The State of Play

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an existing nuclear power stations be economically viable in a market increasingly dominated by zero short term marginal cost renewables and low natural gas prices?  On that question the jury is still out – and will be for years to come.  But the evidence indicates that a number of existing units have out-of-pocket costs that are greater than today’s market prices.

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Electricity Daily

New study finds externalities of gas-fired and coal-fired emissions 2x-4x their price

New study finds externalities of gas-fired and coal-fired emissions 2x-4x their price

March 5, 2015 -- A new peer-reviewed study published in the journal Climatic Change finds that, when environmental and human health costs are factored in, a gallon of gasoline actually costs us about $3.80 more than the pump price; a gallon of diesel about $4.80 more; the price of natural gas more than doubles; and coal-fired electricity more than quadruples in cost. Solar and wind power, on the oth...

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New Texas range war—it’s generation vs. transmission, and a bit of market access

New Texas range war—it’s generation vs. transmission, and a bit of market access

Clear the corral, Grandpa, they’re fightin’ over land an’ market share! The battle over whether Houston, Texas-area power needs are better served by a new power line or new generating capacity in the area has been rekindled with a suit filed in a Texas District Court by two major generators, NRG Energy and Calpine. On the pro-transmission line side are the state’s principal grid operator, the Elec...

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Georgia Power’s share of Vogtle 3 & 4 now $5.05B; total project exceeds $11B

Georgia Power’s share of Vogtle 3 & 4 now $5.05B; total project exceeds $11B

Georgia Power Co. told the Georgia Public Service Commission on Friday that its share of building Vogtle units 3 and 4 will cost $1 billion more than it previously expected, reflecting a potential 18-month delay in the construction, SNL reported .  The Southern Co. utility said its 45.7% share of the final construction and capital costs of the project will be $5.05 billion, up $246 million from ...

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Hertzog blog: What’s a prosumer worth?

Hertzog blog: What’s a prosumer worth?

A consumer uses electricity and pays a utility for the service. By contrast, writes Christine Hertzog in an Energy Collective blog , a prosumer may also aid a utility, providing an energy resource or reducing demand when called upon. The value of a prosumer depends on regulatory policy, she notes, citing actions by the Minnesota Public Utility Commission and the Arizona Commerce Commission. Minnesot...

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The great race: pursuit of high-density, low-cost battery to fuel EVs is underway

The great race: pursuit of high-density, low-cost battery to fuel EVs is underway

DOE's Pacific Northwest National Laboratory has developed a new battery design that packs more energy than any other battery of its kind and size. The new zinc-polyiodide redox flow  battery, described in  Nature Communications , uses an electrolyte that has more than twice the energy density of the next-best flow battery used to store renewable energy and support the grid. Its energy densit...

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FERC: Resolve PJM-MISO seams issues

FERC: Resolve PJM-MISO seams issues

March 4, 2015 -- The Federal Energy Regulatory Commission last week increased its pressure on PJM and MISO to resolve their longstanding boundary issues. FERC said it was considering taking action “to improve the efficiency of operations” at the RTOs’ seam, according to RTO Insider . Despite 12 years of joint meetings that have resolved some issues, the two RTOs remain locked in a standoff over issu...

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Editorials

Unsolicited advice for EPA on Its Clean Power Plan: Encourage regional compliance

Unsolicited advice for EPA on Its Clean Power Plan: Encourage regional compliance

Two regional transmission organizations—PJM and MISO—were asked by their constituencies to assess whether compliance with the Environmental Protection Agency’s carbon-cutting Clean Power Plan might be achieved more cost-effectively if planned on a region-wide rather than on a state-by-state basis.

Each RTO analyzed the problem preliminarily and each found that several billion dollars might be saved...

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Guest editorial: Demand response and electricity market reform: What next?

Guest editorial: Demand response and electricity market reform: What next?

Responding to the excellent paper by Peter Cappers and Andy Satchwell, “ Considerations for State Regulators and Policymakers in a Post-FERC Order 745 World ,” we want to share a conversation that transpired at a recent conference that addressed the issues of reliability in organized markets, the uncertain future for demand response, and what level of government—state or federal—should oversee it. T...

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The virtuous circle of infrastructure investment— a win, win, win proposition

The virtuous circle of infrastructure investment— a win, win, win proposition

In President Dwight D. Eisenhower’s 1955 State of the Union speech, he said, “A modern highway system is essential to meet the needs of our growing population, our expanding economy, and our national security.” Eisenhower led the movement to develop the interstate highway system that links the US, making vehicle travel for transportation, tourism, and the greater economy so accessible that we take...

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Three cheers for state regulators, in Connecticut and elsewhere

Three cheers for state regulators, in Connecticut and elsewhere

State utility regulators are a hard-working lot. They have a tough job and an underappreciated one.

State commission budgets and staff aren’t what they should be. Their resources are unequal to those of the companies they’re supposed to regulate.

The mind-numbing details buried in rate cases, and planning and mergers and other proceedings are not light reading.

Thus, ill-tempered remarks  from Connecti...

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Digging deeper: Competition at the distribution level

Digging deeper: Competition at the distribution level

The pro-competitive reforms introduced into the bulk electricity transmission grid by the Federal Energy Regulatory Commission over the past two decades and more, culminating in FERC Order No. 1000, have transformed what was once a patchwork of transmission monopolies into something more resembling a common carrier system.

Today, as innovation has crept into the local level, with both supply- and d...

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Why should we be concerned with India?

Why should we be concerned with India?

Yesterday we published three articles that concerned India. You may ask why (aside from the dearth of interesting US news). There are several reasons.

  • One story announced US-based SunEdison’s plans to build a $4 billion solar manufacturing factory with an Indian company.
  • A second concerned plans of Rajasthan, one of the largest of India’s 29 states, and the sunniest, to develop 655 MW of solar as th...

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