Federal Energy Regulatory Commission

RTOs and the Public Interest

Defining the mission when the consumer plays second-fiddle to the needs of the market.

Six months back, when ISO New England was mulling over various reforms that FERC had mandated last fall in Order 719 for the nation’s six regional transmission organizations and independent system operators (RTOs and ISOs are interchangeable terms in this column), the ISO refused point blank to include in its mission statement a proposal by stakeholders that it should operate the bulk power system at the “lowest reasonable cost.”

Carbon In Electricity Markets

Price transparency will drive GHG reductions.

In light of coming GHG legislation, price transparency is the key to achieving cleaner generation through the dispatch of lower-carbon sources.

Life After PUHCA

N.J. BPU enacts new rules to insulate utilities from holding companies.

When Congress repealed the Holding Company Act, it gave states greater authority to regulate utilities. New Jersey picked up the baton and enacted rules to protect ratepayers.

A Voice for Smart-Grid Security

Who will oversee the industry’s cyber standards?

Who will oversee the industry’s cyber standards? Effective security calls for a single organization to set standards that will protect the smart grid. The industry is struggling to reach consensus over authority, scope and funding for its new security apparatus.

Anatomy of Sealed-Bid Auctions

Bringing flexibility and efficiency to energy RFPs.

With the introduction of retail competition in the electricity industry, regulatory authorities in many jurisdictions are now overseeing the purchase of electricity at wholesale by electric utilities for customers that do not otherwise obtain supply from independent retailers. There are two primary ways in which, under the supervision of regulatory authorities, electric utilities purchase electricity for these non-shopping customers: through simultaneous descending clock auctions or through fairly common sealed-bid auctions, commonly known as Requests for Proposals.

Paying for the Green Grid

Subsidies might not be the best solution for interconnecting renewables.

Supporters of renewable energy are seeking to socialize the cost of a new interstate highway system for transporting green power. But utilities and transmission owners will build or finance new transmission systems to serve economic demands. Policy makers shouldn’t pre-ordain the direction of industry progress.

Compliance Program Guidance

The industry debates how far FERC should go.

Since the Energy Policy Act was enacted in 2005, the domestic power and gas industry has experienced several years of FERC compliance enforcement history. Including the settlements entered into in 2007, total penalties levied and agreed to by companies are close to $100 million over the past two years. Given the high stakes, some industry stakeholders have suggested that FERC could provide more comprehensive guidance on what it means to have an adequate compliance program and what constitutes that compliance.

Federalizing the Grid

Renewable mandates will shift power to FERC but pose problems for RTOs.

A recent survey conducted by the U.S Office of Personnel Management and reported by the Washington Post on March 13 ranked the Federal Energy Regulatory Commission as eighth best of some 37 federal agencies in terms “talent,” and third in “leadership and knowledge.”

Rethinking 'Dumb' Rates

Achieving the smart grid’s potential requires a revolution in electricity pricing.

Achieving the smart grid’s potential requires a revolution in electricity pricing. Smart metering and smart rates might yield surprising and beneficial changes in the U.S. utility industry. But capturing those benefits will require an intelligent and careful approach to implementing dynamic pricing.

Transmission Incentive Overhaul

FERC’s ROE incentive adder policy sends the wrong signals.

FERC is offering incentive rates to entice transmission investment. But the authors identify serious flaws in emerging policy regarding return on equity (ROE) incentive adders. Determining whether and when ROE adders are appropriate requires a more deliberative approach.