Renewable energy is booming in California, but many project developers must race the clock to break ground by year’s end, or risk losing federal stimulus money under the American Recovery and Reinvestment Act (ARRA),  in the form of cash grants from the U.S. Treasury totaling up to 30 percent of total project costs.

So if you’re a California solar or wind developer, and you want to safeguard your stimulus cash, you bring in the big guns. You call in The Terminator — none other than California Governor Arnold Schwarzenegger – who wrote to Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff in mid-October on behalf of more than a half-dozen developers, asking FERC’s assistance in getting transmission line hookups OK’d by CAISO, the California Independent System Operator, which oversees much of California’s power grid.  The developers would need these grid interconnections to secure funding, finalize contracts, purchase materials, and otherwise get their ducks in a row for the December 31st ARRA deadline.

But then a funny thing happened. Roughtly 10 days of receiving the Governor’s letter, FERC issued two groundbreaking decisions that alter current policy and will make it far easier for wind and solar developers to secure those coveted grid hookups.

Was it Arnold’s doing? We’ll never know. But maybe now we should start calling him The Stimulator. Read more »

Posted: December 9th, 2010 under California, Electric Utility Regulation, FERC, Generator Interconnections, Reliability, Renewable Energy, Solar Energy, Transmission Planning, Transmission Rate Incentives, Transmisson Technology, Wind Energy.
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Over the past ten months or so, from December 31, 2009, through the New York Stock Exchange market close on Friday November 12, you could have earned about 8.5% counting dividends – versus about 9.25% on the same terms for the S&P 500 – simply by buying and holding this basic eight-company portfolio, dominated by financials and consumer products retailers: Bank of America, Citigroup, HSBC, Kimberly Clark, Proctor & Gamble, Safeway, Target, and UBS.

Not so, however, for anyone employed by the PJM Interconnection, the independent operator of the regional electricity grid for the greater mid-Atlantic, covering the historic core (Pennsylvania, New Jersey, Maryland, Delaware, Washington, D.C., Virginia, and West Virginia), and now extending into parts of Kentucky, Ohio, Indiana, Michigan, Illinois, and North Carolina. If you work at PJM, or even if your wife or husband does, well, you can kiss that 8.5% return goodbye – and the 9.25% on the S&P as well. Read more »

Posted: November 15th, 2010 under Electric Utility Regulation, Energy Markets, FERC, PJM, RTOs.
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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

Once every decade or so, the feds launch a new crusade to convert Americans to the metric system, only to give way to indifference or outright ridicule.

Contracts for federally funded highway projects were to conform to metric measurement by Sept. 30, 2000 — until Congress revoked the deadline. Yet federal agencies already had been required to go metric — both by the Omnibus Trade and Competiveness Act of 1988, which had imposed a 1992 deadline, and before that by Executive Order 12770, signed by President Bush the Elder in 1991. And of course, that was after President Reagan in 1982 had disbanded and cancelled funding for the U.S. Metric Board, which had been created seven years earlier through Public Law 94-168, the Metric Conversion Act of 1975, to coordinate the country’s voluntary conversion centimeters, kilograms, and degrees Celsius.

Now, however, comes a metric crusade of a different sort — a request from the staff of the Federal Energy Regulatory Commission, filed Feb. 3, 1010, asking for written comments from the U.S. electric utility industry on a set of performance metrics that the staff has proposed to track and evaluate the performance of ISO/RTO operations and their regional wholesale power markets. And like the metric initiatives that have marked the past forty years, this one appears mired in politics of the most divisive sort. Read more »

Posted: April 6th, 2010 under Benchmarking, California, California Public Utilities Commission, Electric Utility Regulation, Energy Price, FERC, ISOs, LMPs, Locational Marginal Prices, RTOs, Ratepayer Benefits.
Comments: 1