Getting the most from demand response—despite a flawed FERC rule.
FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy decision that stretches federal authority. Nevertheless, economic benefits will result if DR programs are well implemented to avoid gaming the system and distorting the market.
Only the fittest solutions survive in America’s policy wilderness.
Michael T. Burr, Editor-in-Chief
All things being equal, momentous events like the Fukushima nuclear disaster and the Arab spring would bring fundamental changes in U.S. energy policy. But things aren’t equal, and they never will be under America’s democratic and capitalistic process. Frustrating? Maybe, but it’s the only way to ensure our decisions are based on sound economic and environmental principles.
A proposal for utility regulatory and industry reform.
With America’s balkanized and under-staffed regulatory construct, utility companies are left struggling to achieve true scale economies or make real progress toward achieving national energy goals. This retired IOU executive says it’s time to redesign—and strengthen—the regulatory framework.
Because we can’t define the consequences of nuclear accidents — and because radioactivity is invisible and undetectable without a Geiger counter — nuclear power’s risks are like shadowy monsters of unknown proportions, inspiring irrational fear. But that’s no excuse for complacency. Learning the lessons of Fukushima-Daiichi requires first acknowledging that we might have overestimated our ability to manage nuclear risks.
New transparency practice turns confidentiality on its head.
J. Michel Marcoux
The Federal Energy Regulatory Commission (FERC) recently authorized its Office of Enforcement to begin revealing publicly the names of subjects under investigation, as well as summaries of allegations against them, earlier than the commission ever had before. In fact, FERC now may disclose allegations before finding any wrongdoing. This new practice raises the specter of damaging reputations without following what normally would be considered due process.
Anyone who’s been watching the solar power industry for more than a few years can’t help but be impressed by the recent explosion of large-scale projects. It seems akin to the rapid scale-up of wind in the late 1990s and early 2000s—when megawatt-scale turbines became standard-issue, and the definition of a “large” wind farm changed from a capacity of 20 MW to something more like 200 MW.
Northeastern politicians declare war on capacity auctions.
Michael T. Burr, Editor-in-Chief
New Jersey Gov. Chris Christie in February signed into law a bill that will have the state commissioning construction of 2,000 MW of new gas-fired power capacity and dumping it into the PJM capacity market at a $0 price. Maryland is considering a similar capacity-dumping scheme. What’s behind these efforts to manipulate capacity auctions — regional constraints or local politics?
Regardless of what drives the action — state regulation, federal policy, economic reality — collaboration between utilities and the solar industry is now becoming prevalent. Expanding definitions of utility solar business models represent a significant potential for solar market growth, and provide paths for others to follow.
Now that wireless carriers are promoting their networks as a cost-effective communications platform for smart grid data, they face legitimate questions about fundamental performance issues. But if public networks turn out to be the better choice in many cases, utilities might have some explaining to do before state commissions.
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