Posts Tagged ‘PJM’

h1

Power outages hot and cold

May 31, 2011

Michael Giberson

A FuelFix post by Tom Fowler relays ERCOT’s report that the Texas grid operator expects to have enough power to serve customers reliably this summer. At the end of Fowler’s post he casually mentioned, in connection with the rolling blackout in ERCOT last winter, “a report by federal reliability officials concluded power plant operators could have done more to prepare for the cold.”

Somehow I’d missed the release of the fed’s report. Since FERC and NERC were cooperating on the report, I headed to the FERC website to see if it had been posted. At www.ferc.gov, however, I find a notice saying that FERC would be closed on Wednesday “due to a power outage in the vicinity where FERC Headquarters is located.”

A Washington DC-area news report indicated that the power had been out in the area since around 4 PM, likely due to high summer temperatures. (98 F was nearly 20 degrees warmer than average for May 31 and just 1 degree short of the record.)

NERC – the nation’s FERC-certified electric reliability organization – also just issued its summer reliability assessment for the nation. NERC’s CEO said, “We expect the bulk power system will be able to meet the electricity demands this summer, though we are closely monitoring the effects of storms in the Midwest and Southeast, as well as potential drought conditions.” No mention of possible trouble in DC.

The coincidence of the DC power outage and the confident NERC summer report is mildly amusing (to those of us not sweating through DC’s unseasonably warm, humid night without power), but it appears the outage was a local distribution problem and not a resource adequacy or regional transmission system issue.

Still, maybe federal reliability officials and the local power distributor should have done more to prepare for the heat in the nation’s capital?

Posted in Electricity, Regulation | Tagged , , , | Comments Off

h1

Meanwhile, more “power market and the state” battles in New Jersey and Maryland

March 23, 2011

Michael Giberson

And if Andrew Kleit thinks that the Pennsylvania state government is toying with a bad idea (see previous post), look what is going on next door in New Jersey and Maryland.

In New Jersey: “Utilities challenge New Jersey law while preparing to reap its benefits.”

In January the Governor signed a law which is intended to facilitate long-term capacity agreements between the state’s electric distribution companies and generators. As the linked story explains, PSEG is considering building power plants that would benefit from the law – the long term guarantees will help the utility secure lower-cost finance – and “allowing [developers] to build facilities or undertake projects that would not have been feasible otherwise.” At the same time, PSEG is among the members of a coalition of companies that have protested the state’s law at FERC and a member of another group which has filed a challenge to the law in federal court.

Dow Jones Newswire explains: “PSEG and other power producers say this program undermines the U.S.’s largest competitive-electricity market by skewing market prices. They are in the process of suing the state over the legislation in a U.S. District Court and filed a complaint with the Federal Energy Regulatory Commission. Just in case those efforts fail, PSEG is preparing to work under the program.”

Do they contradict themselves? Very well, they contradict themselves. PSEG is large, like one-time New Jersey resident Walt Whitman, they contains multitudes.

In Maryland: “PSC, generation firms debate auction rule.”

The Maryland Public Service Commission on Friday [March 4, 2011] filed a protest with the Federal Energy Regulatory Commission over efforts to do away with breaks at wholesale power auctions that given to new plants that are built with state subsidies. Two groups, P3 Power Providers Group and PJM Interconnection LLC, don’t want those subsidized plants to be allowed to bid less than an administratively set benchmark price.

In both the New Jersey and Maryland cases, among other things the generators are concerned that state involvement in subsidies or guarantees for new investment would undermine operation of the PJM capacity market.

Also see: Court Rules PJM Capacity Market Prices Adequately Protected from Seller Market Power, but Others Contend Not Protected from Buyer Market Power. (Energy Legal Blog).

Posted in Electricity, Energy markets, Politics, Regulation | Tagged , , | 1 Comment »

h1

Jay Hancock is not happy with the PJM power market

January 18, 2011

Michael Giberson

From the Baltimore Sun, Jay Hancock explains he is unhappy with electric power restructuring in Maryland and with the PJM market. I think he hits some targets and misses others.

Assessing the particulars would require a lot of detailed work, probably better done by someone other than me. One big source of agreement concerns stranded costs policy; I agree with Hancock that ratepayers were, uh, “not well served” is the polite way to say it, by stranded cost policy. This conclusion is easier to see in retrospect than it was at the time, but large and small consumers were loudly opposed at the time. (Of course stranded cost policy is better seen as one more failing of regulatory policy than as something appropriately pinned onto deregulated markets.  Stranded cost policy was settled the same way as any cost allocation process in the previous nine decades of utility rate regulation: regulators and utility lawyers arguing over what should be done while consumers mostly were relegated to the sidelines. Yet restructuring was the reason stranded cost recovery were called for, so restructuring is implicated in this particular kick-in-the-pants delivered by regulators to consumers.)

ASIDE: It was nice of Hancock to call the American Public Power Association a “beacon of intelligence” and one of the “honest information brokers” around, after all he had been kick-off speaker for an APPA symposium held a few days ago. I tend to see APPA more like other industry trade associations: good on some issues, but primarily interested in defending their own interests. One thing that cuts in APPA’s favor is the diversity of market positions among its members. The balance among members helps to keep the organization’s positions in balance at least on some power market design issues (but for a little residual wishing that they could put select pieces of the restructuring genie back into the bottle from whence it came).

Posted in Electricity, Energy markets, Regulation | Tagged , | 1 Comment »

Follow

Get every new post delivered to your Inbox.

Join 50 other followers