FERC risks going overboard in easing penalties for generation imbalances.
What good is a penalty that does nothing to deter the crime? For wind turbines, generation imbalances are caused primarily by variations in weather. Even if these imbalances are indeed a bad thing, no $100 penalty will make them go away.
Why current estimation models set allowed ROE too low.
A material capital structure mismatch, which occurs frequently, can lead to material misestimates of the appropriate allowed return on equity, perhaps on the order of 2 percentage points. That is, a 9 percent estimate of the cost of equity can imply an allowed rate of return on equity of 11 percent.
NERC's proposal has the industry scrambling.
As the balloting process for new cyber-security standards from the North American Electric Reliability Council (NERC) drew to a close, the industry group was gearing up for the difficult tasks ahead: ensuring rapid implementation of the new standards among NERC's members.
How an environmentally friendly power source can solve the fossil-fuel supply-and-demand gap.
The challenge over the next several decades will be completion of an economically competitive fusion power plant. The International Thermonuclear Experimental Reactor is paving the way.
FERC must align the immediate self-interest of profit-maximizing entities with its own view of what is in the public interest.
Two obstacles must be overcome to achieve true competitive markets: reversal of the long-term underinvestment in transmission, and greater clarity in the legal and regulatory environments. How can the industry make the most of a somewhat defensive regulatory posture?
California's pursuit of a centralized administrative solution in reliability hinders everyday operational issues.
California’s pursuit of a centralized administrative solution in reliability hinders everyday operational issues.
What can be done to improve weather prediction and load forecasts?
Improving the day-ahead weather and load forecast by just 1 degree Fahrenheit would have huge financial benefits for the industry.
Infrastructure isn't keeping pace. So how to "help" the market without killing it?
What's the right price signal to bring forth enough infrastructure to maintain reliability over the long haul? Moreover, if such a model exists, can it work without stifling competitive markets?
Internet procurement may be used in other states.
Since 2002, the annual energy auctions created and administered by the New Jersey Board of Public Utilities have proven to be an innovative and successful way to meet our state's growing demand for electricity. We were the first state in the nation to procure most of its electric needs through an Internet-based auction. We will keep moving forward at a measured, prudent pace on hourly pricing.
The bias in RTO markets, and how FERC might fix it.
RTO practice creates less risk and uncertainty over the nominal short-term wholesale price of power, but more risk and uncertainty over the long-term cost of transmission. That spells trouble for the coal-fired plant, sited far off at the mine mouth, needing long-haul transmission over a long-enough term to pay back the capital costs.