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
The American Public Power Association (APPA) recently published an analysis of retail power prices, but it makes an elementary mistake and gets the conclusion wrong. The APPA analysis, “2014 Retail Electric Rates in Deregulated and Regulated States,” uses U.S. Energy Information Administration data to compare retail electric prices in “deregulated” and “regulated” states. The report itself presents … More Elementary error misleads APPA on electricity pricing in states with retail electric choice
If the oil market is reasonably efficient, then the price of a barrel of oil should reflect something like the cost of production of the highest-cost barrel of oil needed to just satisfy demand. In other words, the market price of oil should reflect the marginal cost of production. The price of oil on the world … More How can the market price of oil fall so far so fast?
I suspect the simplest answer to the title question is “always.” Maybe the answer depends on your definition of “distort,” but both the intended and generally expected consequences of state utility rate regulation has always been to push costs to be something other than what would naturally emerge in the absence of rate regulation. More … More When does state utility regulation distort costs?
Yes, solar power systems are getting cheaper and battery storage is improving. The combination has many folks worried (or elated) about the future prospects of grid-based electric utilities when consumers can get the power they want at home. (See Lynne’s post from last summer for background.) An analysis by Moody’s concludes that battery storage remains an … More Moody’s concludes: mass grid defection not yet on the horizon
I recently argued that the regulated utility is not likely to enter a “death spiral”, but that the regulated utility business model is indeed under pressure, and the conversation about the future of that business model is a valuable one. One area of pressure on the regulated utility business model is the market for residential … More Should regulated utilities participate in the residential solar market?
For the past three years, I’ve team-taught a class that’s part of our Institute for Energy and Sustainability at Northwestern (ISEN) curriculum. It’s an introductory class, primarily focused on ethics and philosophy. One of my earth science colleagues kicks us off with the carbon cycle, the evidence for anthropogenic global warming, and interpretations of that … More Energy poverty and clean technology