AEP rekindles debate over grid pricing, but should the outcome hinge on majority rule?
You might have thought the Feds closed the book on any broad, region-wide sharing of sunk transmission costs—especially after FERC ruled last spring in Opinion No. 494 that PJM could stick with license-plate pricing (LPP) for transmission lines already planned and built. If you thought that, you weren’t alone. Of 25 transmission owners (TOs) in the Midwest ISO (MISO), 24 voted recently to do the same for their market as well.
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.
What the U.S. electricity sector must do to significantly reduce CO2 emissions in coming decades.
Revis James, Richard Richels, Geoff Blanford, and Steve Gehl
The large-scale CO2 reductions envisioned to stabilize, and ultimately reverse, global atmospheric CO2 concentrations present major technical, economic, regulatory and policy challenges. Reconciling these challenges with continued growth in energy demand highlights the need for a diverse, economy-wide approach.
The big challenge facing the Northeast energy markets.
The Northeast energy markets are working hard to establish new levels of regional coordination and cooperation. The region’s concerted effort is essential to resolving some of the industry’s toughest issues since the individual markets evolved. These issues include the elimination, reduction, or bridging of seams issues that prevent the economic transfer of capacity and energy between neighboring wholesale electricity markets, or control areas, as a result of incompatible market rules or designs.
As if carbon control were a fait accompli, gen developers skew the queue toward renewable projects, driving new policy on transmission pricing.
Now at last, in a region other than California, we can see clearly that renewable mandates and fears of carbon taxes have influenced the power-plant development cycle. Moreover, this effect is helping to drive policy proposals for the pricing of transmission service and the recovery of costs for grid upgrades deemed necessary to bring the new plants on line.
The 2005 Act, designed to streamline projects, may fall short of that goal.
David B. MacGregor and Matthew J. Agen
The Energy Policy Act of 2005 was supposed to streamline the siting process and provide a federal “trump card” for projects delayed at the local level, but it is far from clear whether these goals have been, or will be, achieved.
An expiring 40-year-old contract rocks the Pacific AC Intertie.
PacifiCorp informed FERC, PG&E, and the state of California that it would not renew the contract upon its long-anticipated expiration date of July 31, 2007. Instead, it would take back full ownership of its transmission-line rights and sell the available capacity into the open market under its own tariff at today’s going rate.
What’s the story with AES Ocean Express?
In January 2004, FERC authorized AES Ocean Express LLC (AES) to construct and operate natural-gas pipeline facilities to transport revaporized LNG from an offshore receipt point at the boundary between the Exclusive Economic Zone of the United States and the Commonwealth of the Bahamas to onshore delivery points on the east coast of Florida. AES proposed to connect its planned pipeline to the pipeline system of Florida Gas Transmission (FGT). AES and FGT were unable to agree upon the terms and conditions to be included in FGT’s tariff regarding the LNG delivered through AES’ proposed pipeline, leading to AES filing a formal complaint with FERC, wherein it alleged that FGT sought to impose unreasonably restrictive gas quality and interchangeability standards on LNG delivered into the FGT system.
FERC issues a surprising order regarding responsibility for LNG-related retrofit costs.
The answer to the question of who will be responsible for cost-mitigation measures to accommodate the introduction of large quantities of LNG into the U.S. pipeline grid remains up in the air for now, but there are signs pointing in one particular direction: toward ratepayers.
Price caps, secondary markets, and the revolution in natural-gas portfolio management.
When FERC decided in February, in Order 890, to lift the price cap for electric-transmission customers seeking to resell their grid capacity rights in the secondary market, it cautioned against expecting a quid pro quo for gas. Was the commission just teasing?