Commission

While maintaining its stance as the most sophisticated competitive electricity market in the country, PJM still faces several challenges, all of which are augmented by its expanded footprint. Most prominent is the RTO’s plan to implement a new reliability pricing model. Further, parts of PJM are ailing from transmission congestion issues that limit access to abundant, cheap power sources in the region.

For a front-line perspective on FERC’s policy direction, we asked one of the industry’s most prominent policy representatives, David K. Owens at the Edison Electric Institute, to provide his take on FERC’s competition conference and Order 890.

(April 2007) FPL Group Inc. announced that Toni Jennings was elected to the company’s board of directors. Sierra Pacific Resources announced that Michael W. Yackira was elected president and COO and a member of the company’s board of directors, and Brian J. Kennedy was elected to the company’s board of directors. The board of directors of PG&E Corp. elected Thomas B. King as the corporation’s president. Energy East Corp. announced that its board of directors promoted Richard R. Benson, Robert D. Kump and F. Michael McClain. And others...

The D.C. Circuit once observed that the Mobile-Sierra doctrine is “refreshingly simple.” In fact, however, the doctrine has become incredibly nuanced and complex over time. In two concurrently issued decisions, the court has discovered new prerequisites to the initial application of the doctrine, changed the independent “public interest” review standard into a presumption, and has jettisoned that presumption entirely when contract prices are too high as opposed to too low.

Despite overwhelming theoretical and empirical evidence, we aren’t seeing more DR when it is needed most—during emergency periods. The reasons boil down to two obstacles, both of which must be addressed before widespread DR implementation can move forward.

In the minds of many policy-makers, DR has become associated with rate shocks, rate volatility, unpredictability, and loss of control over energy costs—the very things DR was designed to overcome. What can be done to change this?

Demand response reduces overall energy usage, but the magnitude of the reduction depends on whether the technologies are developed and deployed with efficiency in mind.

A 2007 law essentially prohibits California utilities from signing long-term contracts for power, including those from out of state, unless they emit less than 1,000 pounds of CO₂/MWh of electricity produced. While the law does not specifically bar coal-fired generation, the limit is set low enough to rule out all coal-power plants. A modern, highly efficient natural gas-fired plant barely would qualify. These measures, plus the new carbon-cap law going into effect by 2012, have sent utilities—large and small, private as well as municipal or city-owned—into a frenzy as they scramble to find alternatives to coal to meet their future demand.

(March 2007) Constellation Energy named Kevin W. Hadlock vice president, investor relations, and Robert L. Gould vice president, corporate communications. Subsidiary Constellation NewEnergy appointed Emily Neill as business development manager. Dynegy Inc. announced several organizational changes related to the company’s proposed combination with LS Power. Robert W. Best, chairman, president, and CEO of Atmos Energy Corp., was elected chairman of the American Gas Foundation’s board of trustees for 2007. And others...

Is it possible to go back to the way things were? Nostalgia for the old regulated model seems to be waxing of late, particularly in Virginia. The 70-percent rate increases in Maryland last year at the expiration of price caps—part of the transition to electric competition—has become the calamity that some state regulators fear most. Several utilities are pushing for re-regulation.