PJM

Allocating the costs of new transmission investments requires accurately assessing the value of those new lines, and identifying the primary beneficiaries. But formulaic approaches rely too much on the most easily quantified cost savings, and reject benefits that are dispersed across service areas—or that might change over the course of time. Brattle Group analysts J.P. Pfeifenberger and D. Hou explain that comprehensive valuation produces a more accurate picture.

The energy industry has known for decades that federal regulators eventually would set rules under the Clean Air Act to govern emissions of mercury and other air toxics from coal-fired power plants. However, with the U.S. Environmental Protection Agency now having issued a final mercury rule, along with guidelines for possible extensions of the compliance deadline, utilities and power plant owners finally have a clear idea what they are up against. And the outlook isn't pretty. The challenge is to retrofit many hundreds of generating plants across the country--and all on the same three-year compliance schedule. Yet two wildcards remain in play: what deference the EPA will give to electric reliability needs, as it "consults" with the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Council; and how effective FERC Chairman Jon Wellinghoff will be as Republican leadership in Congress works to derail the new rules.

Price-Responsive demand, EPA regulations, and merger policy will be on the agenda for the coming year as the Federal Energy Regulatory Commission works its way through the list of key cases that were pending at FERC as of January 2011.

(January 2012) Hawaiian Electric selects Renewable Energy Group to supply biodiesel for combustion turbine; GE signs long-term services agreement with Comision Federal de la Electricidad; Nissan North America selects Coulomb Technologies to provide EV charging infrastructure locations; Siemens agrees to acquire eMeter; plus announcements and contracts involving AES Corp., Maui Electric, KCP&L, and others.

A pair of myths is driving many investments today—i.e., America’s T&D system is falling apart, but the smart grid will save the day. A new MIT study reveals a more nuanced truth about reliability, efficiency, and plans for new technologies. The most effective policies and investments will focus on solving real problems and delivering tangible benefits.

(December 2011) Lafayette Utilities System selects Elster’s EnergyAxis as its AMI system; ABB wins contract from Hydro-Quebec; Sapphire Power Holdings acquires gas-fired power generation from Morris Energy Group; Consumers Energy awards contract to Babcock & Wilcox; plus announcements and contracts involving BP Wind Energy, Abengoa Solar, Samsung C&T and others.

The PJM Interconnect’s Reliability Pricing Model generally has succeeded in attracting and retaining low-cost generation and demand resources to maintain resource adequacy. But sluggish demand and low prices have weakened the market for long-term capacity contracts. Suppliers aren’t willing to lock in current low prices, and buyers don’t want to pay more for future certainty. Is the market dysfunctional, as some state lawmakers suggest, or does the lack of long-term contracts indicate a rational balance of supply and demand?

1. ‘Policy’ Guides the Grid; 2. Carbon Not a Nuisance (Yet); 3. Gigabucks for Negawatts; 4. A MOPR, Not a NOPR; 5. Ramp Up the Frequency; 6. Cap-and-Trade Still Lives; 7. Cyber Insecurity; 8. Korridor Killer; 9. The Burden Not Shared; 10. Ozone Can Wait.

When customers sell demand response into a regional capacity market (such as PJM’s Reliability Pricing Model, known as the RPM), how much credit should they earn for agreeing to curtail demand and alleviating stress on the grid — that is, for reducing the market’s need for generating capability and capacity reserve margin? And further, should the amount of credit depend on whether the customer works with market aggregators, known both as CSPs (“Curtailment Service Providers”) or ARCs (“Aggregators of Retail Customers”)? One view would pay customers for the full extent of their curtailment of demand — known as its “Guaranteed Load Drop” (GLD). The other would limit capacity credit to the customer’s prior load history — “Peak Load Contribution,” or PLC. The answer may well dictate whether regulators continue to treat “energy” and “capacity” as two distinct concepts.