In this post, Outsmartingthegrid gladly opens its pages to air a guest editorial submitted by Dr. Alfred E. Kahn in direct reply to the recent post — “The Nutty Professors: Bill, Fred and the Strange Case of Demand Response” (September 10, 2010). That  post aired the debate betwen Professor Kahn (“Fred”), and Professor William W. Hogan (“Bill”), over a proposal by the U.S. Federal Energy Regulatory Commission to pay the going market price for bulk power to demand response resources, putting curtailment offers on par with actual electric generation supply.Background info, plus links to documents, will appear at the end.

 But for now, Outsmartingthegrid turns the podium over to Professor Kahn who writes as follows:

As the second of the two “nutty professors” whose conflicting testimonies — respectively opposing and initially successfully proposing (and subsequently defending) the provisional decision by the Federal Energy Regulatory Commission to require regional electric transmission operators (RTOs) to conduct daily and hourly auctions of proposed curtailments in the purchase of electric power — Bruce W. Radford summarizes with an apparently fine impartiality, it will take me little more than to rearrange his exposition to demonstrate that, as a matter of the most elementary economic principles — to which all of us subscribe — FERC and I are right and “Bill,” along with other opposing interveners, wrong. Read more »

Posted: October 29th, 2010 under Demand Response, Electric Utility Regulation, Energy Markets, FERC, ISOs, RTOs.
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The all-day conference held this week at FERC on how to compensate demand response resources in wholesale power markets proceeded more or less as expected, as the witnesses took sides along the lines set out in the prior post, The Nutty Professors: Bill, Fred and the Strange Case of Demand Response.

But the salon erupted in fireworks during the very last five minutes, treating this reporter and others still on hand in the FERC meeting room to an unrehearsed and quite emotional give-and-take between commission chairman Jon Wellinghoff and senior commissioner Philip Moeller – highlighting a rift among FERC’s leaders on how best to move forward with the vision known as the Smart Grid. Read more »

Posted: September 16th, 2010 under Demand Response, Electric Utility Regulation, Energy Markets, Energy Price, FERC, Smart Grid.
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Imagine walking into a new Honda showroom and telling the salesman that you won’t be buying that new model this year, as you often do.

And by the way, before you kick the tires one last time and stroll out the door, you ask if the dealer would be so kind as to write you a check for the full sticker price of a brand-new Accord, fully loaded, since, by resisting the urge to buy, and making do with your tired old vehicle for one more year, you have made sure that the dealership now will have one more car in its inventory than it otherwise would — a benefit for the dealer every bit as tangible as if the factory had shipped one extra car for free to the showroom floor.

Sound nutty? Well, on Monday, September 13, the FERC Staff will hold a conference to debate this very idea – applied not to new model cars, but to wholesale electricity. (Notice of Technical Conference, FERC Docket RM10-17.)

Read more »

Posted: September 10th, 2010 under Conservation, Demand Response, Electric Utility Regulation, Energy Efficiency, Energy Markets, FERC, ISOs, LMPs, Locational Marginal Prices, RTOs, Ratepayer Benefits, Smart Grid.
Comments: 2