Electricity Policy

Mon06272016

Last updateSun, 26 Jun 2016 5pm

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Maryland’s Supreme Court Loss: A Win for Consumers, Competition and States

Maryland’s Supreme Court Loss: A Win for Consumers, Competition and States

 By Scott Hempling

The Federal Power Act, like all collaborative federalism statutes, envisions a federal-state relationship requiring interdependence and cooperation.  But those principles include the statutory goal of just and reasonable rates for all affected states, not just one or even several.

Background: Just the Facts

D

ue to generation shortages in transmission-constrained areas, PJM capacity auctions were producing high wholesale prices in Maryland.  The Maryland Commission designed a three-part solution:  (1) Select through competition a wholesale generator to serve in the constrained area.  (2) Order Maryland’s retail utilities to contract for long-term capacity from the winning generator, at the price offered by that generator in that competition.  (3) Draft the contract so that the utility, using retail ratepayer dollars, will pay the generator any difference between the FERC-authorized PJM price and the generator’s contract price—with the payment conditioned on the generator being selected in the PJM capacity auction.  New Jersey passed a statute mandating a similar solution.  

Federal district courts and circuit courts struck both efforts, holding that the Federal Power Act preempted the state actions.  Maryland appealed to the U.S. Supreme Court.

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The Net Metering Riddle

The Net Metering Riddle

By Karl R. Rábago

Net metering opponents have done a masterful job in casting the debate around mistaken assumptions. As regulators conduct NEM 2.0 and Value of Solar proceedings, those errant assumptions should be exposed and the real questions addressed.

 

A

fter 25 years in the electric utility rate-making business, I have come to the conclusion that most rate “fairness” can be better understood if you keep this old math riddle in mind:

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Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

Are Regulators’ Heads in the Cloud?  Primary Challenges to Utility Adoption of Cloud-Based Solutions

By Brien Sheahan, Elizabeth McErlean, and Anastasia Palivos

While companies like Amazon, Google, Netflix and Uber are using the cloud and IoT to disrupt entire industries, offering dynamic pricing and services, utilities are lagging behind. As the energy landscape evolves, regulators must consider whether the technical and functional merits of the cloud can create value for utilities and ratepayers.

I.  Introduction 

I

ncreasingly, unregulated businesses are adopting cloud-based information technologies to improve service while leveraging back-office scale and security to generate greater value for consumers and shareholders.  Burdened by outdated accounting rules that incentivize investments in legacy technology, cloud adoption by public utilities is relatively low due in large measure by the failure of regulators to consider forwarding looking policies.  As the electricity grid evolves, cloud-based services will become necessary to manage a smarter, more efficient, and more distributed network and regulators will have to overcome antiquated views regarding how we think about rate-base and cybersecurity.

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An Economist’s Dilemma: To PV or Not to PV, That Is the Question

An Economist’s Dilemma: To PV or Not to PV, That Is the Question

By Ahmad Faruqui

In seeking to reduce $500 monthly utility bills in the most economic way, this Californian found himself engaged in an odyssey of the mind. Why couldn’t I accept the subsidy rooftop solar offers utility customers in a high-cost state? Could I do as well simply pursuing energy efficiency?
D

uring the past 12 months, my wife and I paid up to $500 a month for our combined electricity and gas bills during some summer and winter months.  The annual average was $300 a month.  The high bills hit the pocketbook hard.  But they also caused angst.

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The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

The Policy Aspects of Benefit-Cost Analyses for Distributed Solar Generation and Net Metering

 By Charles J. Cicchetti

Based on the analyses here, rooftop solar should be expanded and NEM practices continued.  If utilities propose another path, state regulators should carefully weigh the reasonable alternatives, including the one presented here.

I. Introduction

T

he purpose of Benefit-to-Cost Analysis (BCA) is to formulate and instruct policies.  Good BCA are objective, but seldom sufficient or determinative.  The first step in a BCA is perhaps the most critical because this is where the policies are defined and assumptions that constrain policy choices are made.  This discussion focuses on two rather interdependent policies related to incentives to increase rooftop solar generation and a relationship, not always uniformly defined, between customers that invest in solar generation on their premises and the utility that has the capability and the duty to distribute electricity from the grid to that customer.

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Electricity Daily

House Energy Committee heads summon CFTC for briefing, warning of duplication

House Energy Committee heads summon CFTC for briefing, warning of duplication

June 27, 2016 -- On Friday, June 24, the chairman and ranking minority member of the House Committee on Energy and Commerce , Fred Upton (R-Mich.) and Frank Pallone (D-N.J.), wrote to Timothy G. Massad , chairman of the US Commodity Futures Trading Commission to express concern about a proposal before the CFTC. The matter in question: a proposal to allow private actions for alleged violations of the Commodi...

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Will Clean Power Plan, in legal limbo, hit its CO2 emissions-cutting goal this year?

Will Clean Power Plan, in legal limbo, hit its CO2 emissions-cutting goal this year?

Are the CO2 reduction goals of the Clean Power Plan—resisted by many interests as they were, stuck in litigation limbo as the plan is—too modest? An abundance of cheap natural gas and a concomitant slump in coal production has pushed US carbon emissions so low that, if the trend continued, the US would achieve its 2030 emissions goals this year, Jeff McMahon’s blog for Forbes reports , cit...

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Could California PUC’s new DER intertie policy serve as a model for other states?

Could California PUC’s new DER intertie policy serve as a model for other states?

Last week the California Public Utilities Commission finalized an update to its interconnection policy aimed at giving distributed energy resource developers greater advance information about costs it would incur. The revision should benefit both the system, inducing development at more locations more beneficial to the grid, at the developer, by reducing the uncertainty of the costs it would incu...

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Rhode Island to adopt 40% RPS by 2035; 30-MW offshore wind due this summer

Rhode Island to adopt 40% RPS by 2035; 30-MW offshore wind due this summer

Rhode Island lawmakers are kicking the state's renewable portfolio standard into high gear, adopting a target of 40% renewables by 2035—a far cry from the current goal of 14.5% set for 2019. The Ocean State’s original renewable standard, passed in 2004, targeted 3% renewable energy by 2007, growing by 1.5% with every successive year. The bold new RPS goal has been sent to Democratic Gov. Gina...

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Hunt group, quitting deal to buy Texas’s largest utility, now sues Texas regulator

Hunt group, quitting deal to buy Texas’s largest utility, now sues Texas regulator

Hunt Consolidated and a group of creditors that sought to buy Oncor Electric Delivery , Texas’s largest transmission and distribution utility, from bankrupt Energy Future Holdings are suing the Texas regulator that attached conditions to the proposed merger and caused the deal to unravel. In a June 17 complaint, the Hunt group said the Public Utility Commission of Texas erred in attaching conditions to t...

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Sustainable FERC project: Helping to sort options for western regional governance

Sustainable FERC project: Helping to sort options for western regional governance

June 24, 2016 -- Stakeholders interested in realizing the benefits of a wider, more transactional western market and creation of a western grid operator—very likely an expansion of the California Independent System Operator —met this week to continue discussion of what is for most a fundamental issue: governance. Recognizing that a regional grid operator can provide more than $1 billion annually by ...

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Editorials

What decided Diablo Canyon’s fate?

What decided Diablo Canyon’s fate?

As an outsider, weighing the things known and not known behind PG&E’s decision to retire its two-unit, 2,240-MW Diablo Canyon nuclear plant, shocking as it was, in the end it wasn’t surprising.

Among the things that are both known—and unknown—about the remaining years for California’s last surviving nuclear plant are these:

Relicensing . As the project’s existing licenses expire in November 2024 ...

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Rethinking the climate change challenge from a deeper, wider position

Rethinking the climate change challenge from a deeper, wider position

Cambridge University engineering professor M.J. Kelly has written a paper that challenges much of today’s accepted wisdom about the climate change threat.

It addresses that problem but also steps back from it to look into the abyss posed by a related problem: the need to supply a growing, changing world with energy and how best to do it—thoughtfully and conscientiously.

Reading the paper was unsettlin...

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America’s long fever dream of boundless nuclear power: What’s a country to do?

America’s long fever dream of boundless nuclear power: What’s a country to do?

America’s relationship with civilian nuclear power is curious: it’s like the story of the aging playboy who can’t let go of his alluring but high-maintenance showgirl. The two love each other, dreaming of what might have been and what might be. They can’t quite make the relationship work, but can’t let go either.

I don’t suggest this perhaps inapt metaphor idly, because I have great respect for tho...

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How wide did the Court open the barn door in offering solace to the States?

How wide did the Court open the barn door in offering solace to the States?

I have a predisposition to root for the underdog. With that admission, while I sympathize with the plight of generators, their viability crimped by suddenly cheap gas; and with great respect for the work of PJM Interconnection and the Federal Energy Regulatory Commission, I had wished that FERC and the courts might have found room to sanction the scheme Maryland had cooked up in rendering its deci...

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Arizona parties back away from cliff to consider the possibility of compromise

Arizona parties back away from cliff to consider the possibility of compromise

We were pleased—and a little surprised—to learn the Arizona pro-solar and pro-utility combatants and their proxies have agreed to put down their legal weapons (is Arizona an open-carry state?) and discuss possible compromises that might advance their respective interests.

The battle of ballot measures was shaping up to be one of competing constitutional amendments, divisive and costly no matter whi...

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A few things we know about solar

A few things we know about solar

“Where you stand depends on where you sit.” That adage is generally attributed to Rufus Miles, a Department of Labor official in the late 1940s. It has become known as Miles’ Law.

The maxim has many applications, few more appropriate than understanding the positions of disputants engaged in debates over America’s policies toward solar energy development. 

I say this with reference to Karl Rábago’...

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