FERC has ruled, but compliance is another story.
Introducing dynamic, real-time, wholesale price signals to the buy side of the retail electric sector has long been the Holy Grail of electric utility restructuring. But judging by the uncertain progress achieved so far, we obviously haven’t found it yet.
Today, nearly a year and a half after the Federal Energy Regulatory Commission (FERC) issued its Order 745, the industry is discovering just how complicated and difficult implementation will be. In the order, FERC told RTO-ISO regions with organized electricity markets to pay the going wholesale power price to customers who forgo consumption and sell their negawatts back to the market.
And the next step—“price-responsive demand,” whereby consumers simply react to price, as when they purchase other goods and services—promises no less controversy. In its recent order of first impression, approving a PRD tariff for PJM, FERC ruled against private curtailment service providers (CSP) on the two issues about which the CSPs felt most strongly (See Order issued May 14, 2012, Dkt. ER11-4628-000, PJM Interconnection, L.L.C., 139 FERC, ¶61,115).