Commission Watch

LICAP and Its Lessons:

Doubts intensify over New England's radical new market for electric capacity.

What began nearly two years ago as a simple request by power producers to boost their chances for recovering fixed costs for several power plants in Connecticut has mushroomed into the single most complicated case now pending before the Federal Energy Regulatory Energy Commission (FERC).

Commission Watch

PJM/Midwest Market:

Should transmission owners get paid extra for distance and voltage?

While the Midwest now appears set on competitive bidding for the electricity commodity, taking from PJM such tried-and-true elements as locational marginal pricing (LMP), financial transmission rights (FTRs), and a day-ahead market with a security-constrained dispatch, the region remains split over the pricing of transmission.

Power Measurement

What did LMPs tell us this summer in PJM's new neighborhood?

With one summer under its belt as a member of PJM, ComEd has been called a complete success by some, boring by others. On the whole, prices in the region were quite flat, and spreads between the 1,281 price nodes in the region were small to non-existent. In fact, the best opportunity for a generator to make money in this market was to export power to a neighboring market.

Transmission Upgrades:

How to allocate the costs.

Efforts to establish and quantify congestion-reduction and loss-reduction projects are progressing in electric markets with locational marginal price (LMP) regimes. The Path 15 upgrade approval by the California ISO two years ago was largely based upon its economic benefits. A draft report from the Electric Reliability Council of Texas (ERCOT), , states that ERCOT will consider transmission projects that are "economically justified by the reduction of congestion and losses."¹

ECM

Demand-Side Management & Metering Tech

Combining real-time usage data with the newest technology can earn benefits for utilities.

Some amount of confusion on the part of end-users of electricity is inevitable as the electricity industry evolves. Confusion seems to be a necessary ingredient of change. At PJM Interconnection, we see fusion as the answer to confusion. First is the fusion of technology-both computing and communications technology-with the electric industry.

Frontlines

Critics say FERC's filed rate doctrine is wrong for the times.

It's quite remarkable how the Federal Energy Regulatory Commission (FERC) has been able to pound a square peg into a round hole. With not much more than a wink and a smile, FERC has taken a depression-era law meant for monopolies-the Federal Power Act (FPA)-and has made it serve double duty as a foundation for competitive power markets.

Let's look back over the past few years-what we got right and where we went wrong.

Do you recall how you felt at your last class reunion? Well, that's exactly what an editor feels when asked to reminisce in public about days gone by at the magazine to which he gave his best years.

Perspective

Wisconsinites don't fear 'Day 2.' But let's get the grid rights right.

While working for the Wisconsin Public Service Commission (PSC), I have grown accustomed to the friendly advice frequently offered by regulatory colleagues and utility executives in higher-cost areas to the East.

A new approach to rate design.

As energy markets have evolved in the late 1990s away from cost-based transactions to competitive market-based transactions, the exposure to market risks for the variable cost of supply has substantially increased.¹ Reflected in these market risks are the diminishing reserves for North American gas supply, which has created conditions of extreme volatility in gas supply. The added market risk is compounded by the sensitivity of some retail load customers to weather conditions.

Commission Watch

FERC's AEP ruling begs the question: Can the feds bypass states that block transmission reform?

In its search for the perfect power market, the Federal Energy Regulatory Commission (FERC) at last has joined the battle that lately has brought state and federal regulators nearly to blows. A recent ruling puts the question squarely on the table: