ETRM & Markets

A Pricey Peninsula

Michigan chafes over regional grid planning, providing a policy lesson for the feds.

High prices have turned Michigan against regional planning -- a possible foretaste of what to expect under FERC Order 1000.

RTO Tango

PJM and MISO ran from the altar once before. Now there’s talk of a shotgun wedding.

Utilities in the Midwest ISO want greater access to sell into PJM’s lucrative market. But that might require a virtual merger of the two RTOs — a move rejected seven years ago as too costly, and perhaps still impractical today.

Hedging or Betting?

Lacking regulatory oversight, financial hedges turn into risky speculation.

Many utilities engage in hedging to protect customers from price spikes. But unless regulators are involved in crafting and monitoring these programs, they can turn into speculative ventures that put ratepayers at risk — for the benefit of shareholders.

Energy Technology Risk: Managing Hyper Gas Markets

Energy Trading & Risk Management: Gas price volatility has increased. Relying on antiquated scheduling systems is a recipe for disaster.

Given energy markets’ newfound volatility and the range of exposures that global energy firms must deal with, the reactive, reporting-oriented nature of transaction management practices is in need of serious revision. A new scheduling module can add tremendous strength and value to a company, primarily in the areas of gas logistics and risk management.

Making Demand More Dynamic

FERC has ruled, but compliance is another story.

Almost a year and a half has passed since FERC issued Order 745, declaring demand response to equal to power supplies in wholesale markets. Yet uncertainty surrounds the order’s implementation, and third-party aggregators are struggling to define their role.

Load as a Resource

Integrating controllable demand into real-time, security constrained economic dispatch.

Historically, grid operators tapped into voluntary load reduction as a last resort for keeping the lights on. But now, smart grid technologies and dynamic pricing mechanisms bring vastly greater potential for using load as a dispatchable resource. Effective implementation requires advanced technologies—and also foresight in creating programs, policies, and market mechanisms.

Double Trouble in PJM's Capacity Market

Policymakers and industry seek a formula to assure competitiveness and resource adequacy.

New Jersey’s bid to force prices downward in PJM’s capacity market not only raises the alarm about market manipulation. It also reveals a dilemma that’s preventing new generation from being built. Incumbent interests and political motivations make PJM less attractive to investment than it should be.

Learning to Love Congestion

Competitive market problems and their implications for customers’ net costs.

In competitive power markets based on locational marginal pricing (LMP), the facts sometimes conflict with popular belief. Most notably: 1. When there’s congestion, the books don’t balance, and ratepayers always pay more than the generators receive. The difference is sometimes called “congestion cost.” 2. Congestion in a competitive market doesn’t necessarily increase ratepayers’ costs; and 3. Reductions in LMP are incomplete and sometimes misleading measures of economic benefits of transmission upgrades. These three facts and their implications should be considered in transmission planning, market design, tariffs, and system operations.

CEO Forum: Facing the Future

Three CEOs, three business models, one shared outlook.

Cheap gas, regulatory uncertainties, and a technology revolution are re-making the U.S. utility industry. Top executives at three very different companies—CMS, NRG, and the Midwest ISO—share their outlook on the industry’s transformative changes.

Shale vs. Coal

Portfolio strategies for the new power-fuel market.

Shale gas discoveries and ballooning inventories have pushed natural gas prices down to a 10-year low. At the same time, increasingly stringent emissions regulations are squeezing out some coal-fired power assets. Are we witnessing a power-fuel revolution? And if so, what’s the best survival strategy?