One of the challenges of electric power market design comes in the need to consider the consequences of design choices for both market outcomes and grid reliability. Strictly speaking, the two kinds of consequences are not neatly separable, as market choices affect system reliability and system reliability affects market outcomes. The interaction between the two … More Integrating reliability-must-run practices into wholesale electricity markets
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
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
Jay Zarnikau, C.K. Woo, and Ross Baldick have examined whether the shift from a zonal to nodal market design in the ERCOT power market had a noticeable effect on electric energy prices. The resulting article, published in the Journal of Regulatory Economics, and this post may be a bit geekier than we usually get around here. … More Did ERCOT’s shift from zonal to nodal market design reduce electric power prices?
Simona Benedettini and Carlo Stagnaro make the case for allowing negative prices in electric power markets in Europe. A few of the larger power markets in Europe allow prices to go negative, but others retain a zero price lower limit. Benedettini and Stagnaro explain both why it is reasonable, economically speaking, to allow electricity prices … More The case for allowing negative electricity prices – Benedettini and Stagnaro
From SNL Energy, “Texas utility regulators expect to open investigation on wind ‘cost apportionment’“: Having seen record wind output of more than 10,000 MW in March, ERCOT in the report also noted that Texas has gone well beyond its 10,000-MW capacity goal and far earlier than the 2025 target established in the state’s Public Utility Regulatory Act. … More Texas wind power, the ERCOT power market, the Public Utility Commission
From StateImpact Texas, a joint effort of radio station KUT Austin and KUHF Houston, a report that consumption of electric power in Texas isn’t growing as fast as expected: As the Texas Public Utility Commission (PUC) considers changing the electricity market so there’s more money to build new power plants, a mystery has popped up: … More Power demand in Texas grows more slowly than forecasted
The Energy Information Administration’s “Today in Energy” series shows with a couple of charts how growing wind power output in the Southwest Power Pool region is cutting into the income of baseload power plants. The effect matters because baseload power plants tend to have the lowest operating costs. As baseload plants get pushed off the … More EIA shows higher wind power output cutting into baseload power generation