Paul Joskow

In any conservation or efficiency program, some market participants will reap benefits without paying their share of the costs—i.e., the “freerider” problem. Some freeriders are unavoidable and generally not a problem. But as Cadmus Group analysts Hossein Haeri and M. Sami Khawaja explain, avoiding excessive freeridership requires careful program structuring, as well as ongoing measurement to accurately evaluate outcomes.

In order to fully integrate wind and other dispersed sources of energy into the system, America’s patchwork transmission networks need to be more closely interconnected and synchronized. An advocate for the Tres Amigas merchant transmission project explains how the proposed facility will integrate the grid.

The advent of the smart grid is sparking interest in intelligent rate design. But while state and federal goals encourage more efficient rate structures, regulatory and political considerations complicate the process. Getting to a next-generation rate design will require a phased transition.

The greatest benefits of time-of-use pricing come from avoided costs of peaking power and T&D capacity—but only if hourly retail prices accurately model the true costs of delivered energy, including scarcity rents. Restoring the missing price signals will encourage economic investments in AMI, conservation and system capacity.

Part way through the Feb. 27 conference on electric competition, it was so quiet you could hear a hockey puck slide across the ice. No, hell had not frozen over. Rather, it was Commissioner Marc Spitzer, who had found a clever story to ease the tension and allay fears that FERC somehow might want to undo the sins of the past, and give up its dream of workable markets for wholesale power.

Jay Kumar, President, Economic & Technical Consultants Inc.: Could Hind Farag and Gary L. Hunt point out any winner whose power costs have decreased after the implementation of LMP? I can bet they won’t find even one single (real) entity. ... I am glad that MISO is sticking to the original basis of a supposedly competitive market.

Diane Moody, Director, Statistical Analysis, American Public Power Association: “The Fallacy of High Prices” purports to show that restructuring of wholesale power markets has resulted in significant benefits. However, the analysis it offers in support of this proposition is not credible.

Some states, including Illinois, Oregon, Pennsylvania, and Texas, have been considering smart-metering questions as part of rate cases and resource-planning discussions. Other states, such as Kentucky, Louisiana, Ohio, and Virginia, have initiated EPACT Section 1252 inquiries separately from other proceedings. The tenor of the discussion also varies from state to state, with high-cost power states generally more attracted to AMI than low-cost states are.