ISO

DR Distortion

Are subsidies the best way to achieve smart grid goals?

FERC has proposed that wholesale energy markets should subsidize load reductions with full LMP (locational marginal price), without deducting the customers’ retail savings. Such a policy could distort the market, and other solutions might achieve the same objectives more efficiently.

Vendor Neutral

Itron deploys meter modules throughout Black Hills territory; Siemens to supply gas turbine packages to Mississippi Power; Cisco acquires Arch Rock for IP-based wireless smart metering applications; eMeter closes $12.5 million private-equity round; Enspiria helps NV Energy secure approvals for smart grid plan; American Superconductor invests in wind-turbine blade manufacturer; DOE selects 22 carbon-capture and storage projects for R&D funding; Petra Solar wins Sandia matching grant; plus announcements from Johnson Controls, Tantalus, Cooper Power, ComEd, UISOL, Convergys, SOLON and more

One if by Wholesale, Two if by Retail

Which path leads to the smart grid?

A fierce debate has erupted in the utility policy community, with battle lines drawn within FERC itself. In the effort to improve system efficiency, two competing alternatives stand out: to build the smart grid on large-scale demand response (DR) programs, or to build it around consumer behavior in retail markets.

M&A Uptick

Do regulatory and economic trends favor industry mergers?

Now that some new major transactions have emerged, and financial recovery appears slowly moving forward, utility mergers are beginning to appear likely again. Although regulatory hurdles still impede new transactions, some changes at the federal level are reducing concerns about market power and competition. Plus, changing market conditions and new compliance requirements are strengthening the case for scale economics.

People (September 2010)

Duke names chief communications officer; PG&E appoints integrated DSM vice president; Entergy promotes four execs; Puget Sound Energy’s Kim Harris to replace Steve Reynolds; Richard Riazzi becomes CEO of Duquesne Light; Fred Butler joins Opower advisory board; Tom Kuhn to Control4; plus personnel changes at California ISO, AEP, Chesapeake Utilities, Southern Company, Exelon and others.

Deja vu or New Horizons?

State regulators face mandates without consensus.

New federal and state policy mandates are pulling state regulators in many directions. The patchwork of regulations has created a new level of complexity for utility investment decisions and political risk for utilities and state regulators alike.

Congestion Relief

Transmission expansion is only part of the remedy for system constraints.

Building new transmission across the entire U.S. is an idea that continues to dominate discussions about the future of electric power. Many believe large amounts of power need to be moved across the country, or that transmission is needed to relieve congested areas, or to make sure enough renewable power is built. But transmission capacity is only part of the remedy to system constraints, and policy decisions and investment strategies must be based on sound evidence and economically rational planning.

People (August 2010)

Exelon named Kathleen Barrón vice president of federal regulatory affairs and policy. American Electric Power (AEP) promoted A. Wade Smith to president and COO for AEP Texas. El Paso Electric promoted Mary E. Kipp to serve as senior v.p., general counsel and chief compliance officer. Chesapeake Utilities promoted Elaine B. Bittner to v.p. of strategic development, and she retains the position as v.p. of natural gas pipeline subsidiary, Eastern Shore Natural Gas. And others.

Demanding More from DR

Customer-specific demand-response strategies become more sophisticated.

Demand-response technologies are quickly becoming more sophisticated, and markets are treating demand as a resource. But realizing the true potential of DR requires utilities to apply today’s technology solutions and program structures—and to base their strategies on actual customer behavior and preferences—rather than yesterday’s outdated assumptions about centralized load control.

Pricing Negawatts

DR design flaws create perverse incentives.

Demand response isn’t energy: It’s a separate product, traded in a separate market. Policy trends, however, are moving toward equal treatment for demand and supply resources in electricity markets. Does treating DR as energy inflate its value and create perverse incentives?