Michigan chafes over regional grid planning, providing a policy lesson for the feds.
High prices have turned Michigan against regional planning -- a possible foretaste of what to expect under FERC Order 1000.
Complex problems call for collective measures.
Michael T. Burr, Editor-in-Chief
Among all of the investment priorities in the U.S. electric power industry, one stands out as having the greatest momentum: transmission. This is interesting because transmission is perhaps the most difficult type of power infrastructure to develop, and has been for decades. Editor Michael T. Burr talks with executives at Xcel Energy and Great River Energy to learn how the CAPX2020 consortium has managed to succeed where others failed.
Competitive energy suppliers are infuriated by Michigan’s regulatory framework. The state partially unbundled its utilities, but left generation tied to retail operations. Then it opened the retail market to alternative suppliers, but capped their participation at 10 percent — severely limiting true competition. Former FERC Commissioner Bill Massey says Michigan’s schizophrenic approach is stifling innovation and saddling customers with unnecessary risks and costs.
ITC and AEP jockey for the lead in building the grid of tomorrow.
On February 9, a group of the nation’s major grid system operators released a study estimating the nation’s electric industry sector needs to spend some $80 billion—more than 10 times the size of that portion of the Obama stimulus package directed specifically at transmission construction—in order to achieve a 20 percent retail penetration for renewable wind energy in just the Eastern Interconnection.
FERC would relax price caps—sending rates skyward—to encourage customers to curtail loads.
About four months ago, at a conference at Stanford University’s Center for International Development, the economist and utility industry expert Frank Wolak turned heads with a not-so-new but very outrageous idea.
FERC attempts to reform competitive markets.
Richard Stavros, Executive Editor
The fact that FERC actually released an advance notice of proposed rulemaking in late June, on competitive markets of all subjects, has many in disbelief.
Why the standard market design refuses to die.
Hold on to your hats. The vaunted and vilified “standard market design”, once thought dead and buried, has been resuscitated, with all attendant chaos and rhetoric, but this time in the guise of a new proposal under the code name “open dispatch.” This new construct, as remarkable in its way as Einstein’s theory of indeterminate space and time, declares that electric transmission, long seen as one of a triumvirate of unique and essential utility industry sectors (along with generation and distribution), is little more than a mirage.
We are better off under restructured electric markets.
Howard J. Axelrod, Ph.D., David W. DeRamus, Ph.D., and Collin Cain, M.Sc.
The most important action regulators can take to minimize consumer electricity costs is, and will continue to be, ensuring competitive wholesale markets, while demanding a rich mixture of products from the suppliers in these markets.
Sweeping revisions to Order 888 are needed before true wholesale competition can take place.
Richard Stavros, Executive Editor
There’s been a lot of talk in the industry about new super powers for market enforcement, conferred by Congress on FERC in last year’s energy legislation. But this hasn’t been the case entirely. Many believe that FERC still labors at a disadvantage.
Congress gives FERC an impossible task: Craft long-term transmission rights to save native load from paying grid congestion costs.
If “perfect” be the enemy of the “good,” then look no further for proof than in Federal Power Act section 217(b)(4), enacted by Congress in EPACT 2005.
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