The bias in RTO markets, and how FERC might fix it.
RTO practice creates less risk and uncertainty over the nominal short-term wholesale price of power, but more risk and uncertainty over the long-term cost of transmission. That spells trouble for the coal-fired plant, sited far off at the mine mouth, needing long-haul transmission over a long-enough term to pay back the capital costs.
Consider the opening of the PJM market, and its effect on prices.
Wholesale competition is working, and the best evidence to date is the savings produced from the opening of the PJM market to competitive power generation from the Midwest. A real-time case study unfolded before our eyes in May and October 2004.
A proposal to remove the bottlenecks on grid investment.
The lack of transmission investment transcends the usual culprits, pointing to a serious flaw in market structure.
A review of the ongoing evolution of market design.
A forecast for California on Aug. 16, 2006
Commission Watch
What everybody missed in setting up the regional grids.
While the electric utility industry has largely agreed on what elements to include in a standard market design (SMD) to govern wholesale power trading in a given region, recent experience shows that the regulators from time to time have overlooked a number of things.
Doubts intensify over New England’s radical new market for electric capacity.
Should transmission owners get paid extra for distance and voltage?
Power Measurement
What did LMPs tell us this summer in PJM's new neighborhood?
With one summer under its belt as a member of PJM, ComEd has been called a complete success by some, boring by others. On the whole, prices in the region were quite flat, and spreads between the 1,281 price nodes in the region were small to non-existent. In fact, the best opportunity for a generator to make money in this market was to export power to a neighboring market.
Transmission Upgrades:
How to allocate the costs.
Efforts to establish and quantify congestion-reduction and loss-reduction projects are progressing in electric markets with locational marginal price (LMP) regimes. The Path 15 upgrade approval by the California ISO two years ago was largely based upon its economic benefits. A draft report from the Electric Reliability Council of Texas (ERCOT), , states that ERCOT will consider transmission projects that are "economically justified by the reduction of congestion and losses."1