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.
Comments: none

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

Joseph Bowring, President of Monitoring Analytics, LLC, the Independent Market Monitor (IMM) for the PJM Interconnection, the regional transmission organization for the Mid-Atlantic states, has sent the RTO running back to Valley Forge with its tail between its legs, after having forced PJM to concede defeat in a dispute over the release and Internet posting of confidential bid and offer pricing data in the form of Excel spreadsheets relating to a recent Base Residual Auction (BRA) for the PJM capacity market, known as the Reliability Pricing Model (RPM), as was conducted in May 2009, for the 2012-2013 delivery year.

The issue was whether PJM had done enough to “aggregate” and “mask” the released data, so that clever market participants could not thumb through the spreadsheets with a discerning eye and figure out the exact price points contained in buy and sell bids submitted by rival utilities or generation capacity suppliers. Read more »

Posted: April 9th, 2010 under Bids and Offers, Capacity Markets, Confidential Information, Electric Utility Regulation, ISOs, Independent Market Monitor, Market Monitoring, PJM, RPM, RTOs, Reliability Pricing Model.
Comments: none

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