Too often, debates about wholesale “markets” are driven by superficial discussions about competition being preferable to regulation. Of course, that is true, but how do we compare an increasingly dysfunctional “competition” construct to generally functioning and well-understood regulation of an essential public service?
Read MoreAmong the alphabet soup of acronyms known by RTO-watchers is one that is cropping up with increased frequency: the RMR (or for the uninitiated, the “reliability-must-run” contract). These cost-of-service based contracts are last-ditch measures that throw lifelines to plants needed for reliability, but that would otherwise close based on the revenues they derive from the market. Practically, the result of RMRs is that generation units are insulated from the outcomes of markets and paid instead based on their cost to operate.
Read MoreThe list of challenges within PJM is growing, and quick fixes are not readily apparent. PJM, FERC and the states will need to avoid the missteps that have imperiled other RTOs, as in Texas and California, where the threat of blackouts and volatile prices are a year-round concern.
Read MoreIn addition to the sizable increase in generation capacity that would be required to energize a large fleet of EVs, the wires portion of the utility business would need to invest billions to accommodate changing power demands and dynamics.
Read MoreAny casual observer of politics knows that hyperbole is a frequent, if unwelcome, occurrence in public policy advocacy. Sometimes, however, an exaggeration is so wild that it drifts into delusion. Such is the case with a collection of electric deregulation’s biggest boosters called the Texas Competitive Power Advocates (TCPA).
Read MoreSupporters of the deregulated utility model like to portray themselves as plucky pro-consumer white knights, in contrast to traditionally regulated utilities. Turns out, the deregulated oligopolies are more than capable of securing the sort of anti-competitive, anti-consumer sweetheart deals that they accuse other companies of seeking.
Read MoreDeregulation is sold in a variety of ways to the public, but it keeps coming up short in practice. To be sure, there are those who benefit – the competitive suppliers, the big customers, particularly from the tech industry –but the regular consumer has seen no benefit, and much confusion.
Read MoreThe latest developments in PJM are symptomatic of a broader issue that has been in plain sight for some time now: the RTO/ISO model, and particularly the strain of the capacity market model, is not only dysfunctional—it is outright failing.
Read MoreIt may be weeks until spring in much of the U.S., but ideas for fixing broken electricity markets are beginning to bud across the country. And while you wouldn’t know it if you only read current events through a Washington, DC lens, it has long been true that the frontlines of energy policy are in the states. With legislatures now in full swing throughout the country, it’s a good time to highlight some of the more interesting matters taking shape in the states.
Read MoreAs January turns to February, there is still time for one last New Year’s Resolution, so let’s start by offering a resolution to FERC Chairman Phillips: Emphasize the need for FERC to get back to basics.
Read MoreThe new year is a time for resolutions, both attainable and unattainable. In the state regulatory space, however, particularly in a time of rapid transition and challenging markets economics, it is important to develop a resolution with a clear and focused goal. For state regulators, regardless of political stripe or policy bent, the recent State of the State by new Nevada Governor Joe Lombardo is worthy of review and reflection.
Read MoreThe new year arrived with some bad press for the small but vocal group of electricity deregulation advocates that continues to peddle its preferred policy prescriptions. It came in the form of a New York Times article highlighting the failure of electricity deregulation to deliver on its promises of lower energy costs for consumers.
Read MoreOver the next several weeks, this blog will propose New Year’s Resolutions for those in and around the electricity policy arena. We will start with one that should always be first in the minds of anyone with responsibility for oversight of the electric grid: shore up reliability and resource adequacy.
Read MoreLast month, the North American Electric Reliability Corporation (NERC) released its 2022-2023 Winter Reliability Assessment, and it should serve as a wake-up call for those still arguing that the deregulated electricity model is a beacon for the nation to follow.
The fact is, it is a failed experiment, and one no other state should adopt.
Read MoreThe anti-consumer effects of deregulation become more evident every day as the energy inflation crisis continues. It should serve as a wake-up call for those willing to study the outcomes being produced in our nation’s state policy incubators.
Read MoreAny way you slice it, the coming legal battle over the alleged market manipulation is a bad look for the nation’s organized wholesale markets.
Read MoreIt is time to start encouraging creativity in business model development, then building a regulatory structure around the business model to ensure appropriate oversight and transparency. We can start with a signal from regulators, state and federal, and federal agencies charged with deploying IRA funding that this type of creativity will be rewarded in terms of regulatory support and even federal dollars. Otherwise, our transmission future is doomed to be a REPEAT of our transmission past, full of “just in time” transmission solutions or, even worse, no transmission at all.
Read MoreSix Flags Fiesta Texas amusement park in San Antonio debuted a new roller coaster this past summer. The world’s steepest dive coaster, dubbed “Dr. Diabolical's Cliffhanger,” promises patrons that, “Once you are exposed to this menacing machine, you shall live forever…IN FEAR!”
It sounds not entirely unlike the deregulated Texas electricity market, another machine that has been delivering white-knuckled rides to the state’s residents.
Read MoreSo say a prayer for all those in Florida that have lost property – and far more important things – to Hurricane Ian. But don’t forget to remember the front-line utility workers too, while considering the legal, regulatory and financial mechanisms that make a functioning critical infrastructure network possible.
Read MoreBy now it’s no secret that this winter’s energy bills are forecast to rise just about everywhere. But it is well established that if you live in a deregulated state, that increase will, unfortunately, be faster and higher.
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