Fortnightly Magazine - August 2010

An increased reliance on renewable energy could threaten reliability of the nation’s electric transmission grids by reducing the rotational mass and rotational inertia of on-line turbine generators, thus, reducing the capability of generators to respond to drops in voltage frequency. In fact, data collected from 1994 to 2009 for the Eastern Interconnection already reveals a drop in the grid’s capability (as measured in megawatts) to stop a very rapid drop in frequency — such as a drop of a tenth of a cycle per second.

A look at the issues that the Federal Energy Regulatory Commission must address concerning allocation of costs for certain high-voltage transmission lines 500kV or greater, planned for the PJM region, in the “paper hearing” on remand from the 7th Circuit federal court decision that rejected a socialized, region-wide sharing of costs among all utilities and customers across the RTO footprint.

Demand-response technologies are quickly becoming more sophisticated, and markets are treating demand as a resource. But realizing the true potential of DR requires utilities to apply today’s technology solutions and program structures—and to base their strategies on actual customer behavior and preferences—rather than yesterday’s outdated assumptions about centralized load control.

When Électricité de France stepped in to buy Constellation Energy’s nuclear assets and help the company avoid bankruptcy, the Maryland Public Service Commission conditioned the sale on a set of ring-fencing provisions. The industry has been using such structures to protect ratepayers in complex and high-risk M&A transactions since the 1990s. The protection isn’t foolproof, however—and it can bring problematic regulatory trade-offs.