PJM

One sure sign of recovery in boom-and-bust power-generation markets is the renewed growth in the planning and construction of power plants. Active efforts are underway in generation development in the Southeast markets in spite of the high levels of generating reserve margins. With its traditional utility-dominated market structure and a preference for baseload generation, the Southeast is the battleground for the next round of power-generation development.

A motley assortment of naysayers and recalcitrants continue to oppose competitive electricity markets around the world. But the alternative to markets is centralized command economics—a discredited concept that deserves to be consigned to the dustbin of history.

The Supreme Court’s recent decision empowering the Environmental Protection Agency to regulate carbon dioxide shifted momentum toward a mandatory program to cap greenhouse-gas emissions. Eventually, there will be huge implications for power generation.

The 9th Circuit Court’s Snohomish and PUC decisions seek to rationalize what has been a confusing, conflicted area of law.

The bottom fell out in the hearing room at FERC on April 5 when witness Joseph Bowring let it slip that, yes, he might well prefer more independence from his employer in his role as chief of the market monitoring unit at the PJM Interconnection.

Severe upward pressure on electric rates after a decade of stability has regulators, legislators, utility executives, consumer advocates, and myriad other stakeholders searching for solutions. Revenue-backed financing can mitigate many of these mandate-driven rate increases significantly. These programs must, however, be designed to eliminate the inefficiencies and inequities that can be associated with revenue set-aside programs.

While both NERC and the NERC regional councils (known today as the Electric Reliability Organization) have standards and guidelines for resource adequacy and system reliability, much of the specificity as to how interruptible (e.g., demand-side) and intermittent resources (e.g., wind) are included is left up to the individual ISO/RTOs, states, provinces, etc. In fact, the various regions across North America each seem to have their own methodology for incorporating these resources into their resource adequacy and reserve-margin calculations. As the North American energy industry escalates its desire to reduce greenhouse-gas emissions through the expanded use of demand-side resources and intermittent renewables, the importance of this topic also will escalate.

“Make no small plans,” the saying goes, and consultant Ed Krapels has taken that to heart. Krapels' vision: Bring significant quantities of renewable energy south from Maine and the Canadian Maritimes, and inject that capacity directly into the congested downtown local grids of America’s large East Coast cities. Who could find fault with that?

Experts say a new set of skills and expertise will be necessary to manage the risk created by new government mandates, new market developments, and new energy technologies.

Price forecasting is a significant business process within any energy merchant that trades electricity and natural gas. Business planning, trading, mergers and acquisitions (M&A), even rate-case activities rely upon some type of a price forecast as the foundation to analysis.

The problem with a single forecast is that it never is correct. As soon as the forecast is complete, the world changes and the information becomes dated and often even irrelevant.