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Reconsidering Resource Adequacy, Part 1

Has the one-day-in-10-years criterion outlived its usefulness?

Fortnightly Magazine - April 2010

Paul L., “Competitive Electricity Markets and Investment in New Generating Capacity,” June 12, 2006, p. 48-49; and Hogan, William W., Regulation and Electricity Markets: Smart Pricing for Smart Grids , presentation to the Energy Bar Association Electricity Committee Meeting, Oct. 16, 2009, pp. 21-23.

2. Ernest Orlando, Lawrence Berkeley Laboratory, A Framework and Review of Customer Outage Costs: Integration and Analysis of Electric Utility Outage Cost Surveys , November, 2003, p. 14 (showing outage costs for large commercial and industrial customers 3 or 4 times lower if they have back-up systems) .

3. See, for instance, Duke Energy Indiana – Essential Use Customers .

4. Cramton, Peter and Jeffrey Lien, Value of Lost Load , February 2000, p. 4 .

5. Breidenbaugh, Aaron, New York Independent System Operator, The Market Value of Demand Response , presented at the PLMA Fall 2004 Conference, Sept. 30, 2004.

6. U.S. Department of Energy, Benefits of Demand Response in Electricity Markets and Recommendations for Achieving Them , February 2006, p. 83.

7. See the RPM Planning Period Parameters for the 2011/12 and 2012/13 Base Residual Auctions . The values are based on cost studies that are also available on the PJM Web site.

8. One survey found that approximately 50 percent of customer load in California is exempt from rotating outages due to protection of “essential use” customers. Lawrence Berkeley National Laboratory, Rates and technologies for mass-market demand response , Paper LBNL 50626, 2002, p. 4 Available at: http://escholarship.org/uc/item/6k22v5kq.

9. Joseph H. Eto and Kristina Hamachi LaCommare, Tracking the Reliability of the U.S. Electric Power System: An Assessment of Publicly Available Information Reported to State Public Utility Commissions , for the Ernest Orlando Lawrence Berkeley National Laboratory, October 2008, p. 15 Table 4 .

10. While peak load data for 2009 is available, it is not shown in these figures as the peaks in 2009 were much lower due to the recession.

11. ISO New England, 2009-2018 Forecast Report of Capacity, Energy, Loads and Transmission , April 15, 2009; PJM, 2009 PJM Load Forecast Report .

12. PJM, 2009 PJM Reserve Requirement Study , September 2009.

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