Joseph Bowring

Pay-As-Bid Revisited

Many see a higher cap as a windfall for nuclear and coal.

FERC’s new rulemaking proposal would allow generators to tender supply bids higher than $1,000 per megawatt-hour, if it really costs that much to buy fuel to generate power. Some opponents say that may be OK for gas-fired turbines, but it’s not needed for nuclear or coal-fired plants.

Topping the $1k Cap

Still Beyond the Pale?

Two decades into our grand experiment with wholesale power markets and we’re still debating the need for a cap on prices.

FERC v. Ohio

Will the Feds weigh in on the great Buckeye brawl?

Ohio ratepayers could prosper if natural gas prices rise in the next few years, boosting revenues when the utilities resell into PJM markets.

Bundled against Change

Mississippi draws a line in the sand.

"We view the [Entergy-ITC] transaction [as] an attempt to extract excess value."-Mississippi PSC

Congestion on Trial

PJM and the crisis over FTR underfunding.

PJM’s latest crisis—the underfunding of financial transmission rights that we’ve seen over the last few years—pushes regulators right to the edge. How far do they trust wholesale power markets? Do they accept the idea, proven by a famous economist, that freely traded financial instruments can work just as well—better even—than firm, physical contract rights?

In PJM’s case, we are told, the problem occurs when too much negative congestion shows up in real-time balancing. But if congestion is bad, shouldn’t negative congestion be good?

FERC's Full Plate

A look at issues facing the commission for the coming year.

Price-Responsive demand, EPA regulations, and merger policy will be on the agenda for the coming year as the Federal Energy Regulatory Commission works its way through the list of key cases that were pending at FERC as of January 2011.

Yes, We Have No Negawatts

When you sell demand response back to the grid, how much capacity are you now not buying?

When customers sell demand response into a regional capacity market (such as PJM’s Reliability Pricing Model, known as the RPM), how much credit should they earn for agreeing to curtail demand and alleviating stress on the grid — that is, for reducing the market’s need for generating capability and capacity reserve margin? And further, should the amount of credit depend on whether the customer works with market aggregators, known both as CSPs (“Curtailment Service Providers”) or ARCs (“Aggregators of Retail Customers”)? One view would pay customers for the full extent of their curtailment of demand — known as its “Guaranteed Load Drop” (GLD). The other would limit capacity credit to the customer’s prior load history — “Peak Load Contribution,” or PLC. The answer may well dictate whether regulators continue to treat “energy” and “capacity” as two distinct concepts.

Capacity Roulette

Out of market means out of luck—even for self-supply.

When the U.S. Federal Energy Regulatory Commission issued its so-called ”MOPR“ decision in April 2011, approving a minimum offer price rule (or bid floor) for PJM RPM capacity market — and then on the very next day did much the same for New England’s FCM capacity market — FERC did more than just prop up prices. Instead, it created a nightmare scenario for utilities that still own their own generation. These utilities, who choose to “self-supply” with their own plants, rather than buy capacity from either the RPM or FCM, adequacy rules, could now be forced to pay twice for capacity — if their own plants are deemed inefficient or uneconomic.

Negawatt Pricing

Economists take sides in the battle for DR’s soul.

Back when the U.S. economy and power consumption still were bubbling, PJM reported in August 2006 that customer curtailments during a week-long August heat wave had generated more than $650 million in market-wide energy savings—all at a mere $5 million cost, as measured in direct payments made to the demand response (DR) providers, set according to wholesale power prices prevailing at the time. Where else but the lottery can you get an instant payoff of 130-1?