In today’s Wall Street Journal special section on energy issues, a pair of articles presents the case for and against restructuring the electric power industry to introduce more competition. In favor of reform is Andrew Kleit: “YES: It Is the Best Way to Lower Costs and Increase Innovation.” In favor of the traditional regulated electric utility … More The weak case for continued regulation of the electric power industry
In this morning’s Detroit News appears an op-ed about a utility-supported proposal in the Michigan legislature that would dramatically limit and perhaps extinguish the state’s sixteen year old effort allowing retail choice in electric power. The introduction: Do Michigan consumers want to go forward or backward in reducing their electric bills and modernizing the state’s … More Op-ed urges Michigan not to reregulate retail electric power
Baseload electric generating capacity is exciting… wait, no … baseload capacity is exiting areas served by regional wholesale power markets, and the owners of these assets and some state policymakers are anxious to solve what they imagine to be a problem. Utility Dive has a good story on the topic, “Re-regulation on the horizon? State plant … More Baseload electric generating capacity is exciting…
As had been announced in June of this year, the Energy and Power subcommittee of the U.S. House of Representatives is devoting some time to a deep look into the Federal Power Act (FPA). At the time of the June announcement the committee sent a letter to Federal Energy Regulatory Commission (FERC) saying: As you know, the … More House Energy and Power Subcommittee takes a look at the Federal Power Act; one small suggestion for reform
Analysis of a randomised-controlled trial on a sample of almost 2500 Irish households revealed one surprising result: compared to the control group, households provided with a smart meter, detailed feedback on usage, and time-of-use pricing reduced investment in energy efficiency projects. While this unexpected development appears treated by the researchers as an embarrassment to be overcome, the result should … More Smart meters help consumers avoid wasting money on energy efficiency
Rather than attempting to “mimic competition,” Giberson suggested simply “to allow competition.” Cost-of-service rate regulation cannot be designed to mimic competition. If you want competitive results, then allow competition. At least that was my claim reported in a Megawatt Daily story, “Texas wires rate study draws mixed reactions.” (From Monday, June 27, 2106; articles are not … More Can regulated rates be designed to mimic competition?
Last week the commissioners of the Texas Public Utility Commission once again complained about retail power suppliers who gamed the ranking system on the state’s retail electric power shopping website http://www.powertochoose.org. This post summarizes the problem and then offers a simple solution. From the Houston Chronicle: Texas’ utility commissioners complained Thursday about confusing or misleading … More Texas PUC continues look at “gaming the rankings” problem on state website. Here’s my solution.
PJM has issued a report that, no surprise, finds the regional power promotes efficiency in operation and offers the right incentives for market entry and exit. The report does a few things, but none perhaps as useful as reminding policymakers that transparent, well-functioning markets do not always deliver the outcomes they wish for. From the … More PJM report says the regional power market works, doesn’t always give regulators what they want
Severin Borenstein asks whether growth of distributed energy is mostly an uneconomic response to regulatory dysfunction, and raises the question of whether uneconomic responses might lead to regulatory improvements. He doesn’t quite frame the issues quite like that, his post is somewhat exploratory in form, but I think this is the question he is aiming at. … More Does bad regulatory policy sow the seeds of better regulatory policy?
Institutional persistence creates some of the thorniest problems in public policy, including electricity policy. Institutions change more slowly than technology and markets, because of both design and status quo bias, which means that dynamic processes of economic and technological change can make regulatory institutions outdated. This mismatch is showing up right now in the electricity … More My R Street policy study: Electricity market alternatives to regulatory net metering