Comments by Ari Peskoe Subscribe

On 80-Year Old Law Determines Whether Demand Response Can Bid in to Wholesale Electricity Markets

Bob - My understanding is that Order 745 has been implemented. For instance, PJM has a report entitled "2012 Economic DR Performance Report: Analysis of Economic DR Participation in the PJM Wholesale Energy Market After the Implementation of Order 745." http://www.pjm.com/~/media/markets-ops/dsr/20150701-order-745-impact-on-economic-dr.ashx

I agree with you that DR may not lower overall consumption, but you asked whether DR lowers prices.   Reducing peak demand lowers prices. 

Replacing flat-rate pricing with LMP could have harmful effects on the "single mother with two jobs" in your hypothetical.  She can't moderate her consumption when there are price spikes, and so she ends up paying more during times of peak demand.  

I don't think Hogan's quote proves that DR raises prices.  I thought the "inefficiency" that Hogan is concerned about is about overall social welfare, which includes consumer surplus and producer surplus.  Because FERC's net benefits test focuses on consumer surplus, it's not clear how producers (i.e., generators) fair and it's possible that total welfare is lower.  But, wholesale market prices are still lower than they otherwise would be.  How else could DR clear the market if it were not less expensive than generation?

October 6, 2015    View Comment    

On 80-Year Old Law Determines Whether Demand Response Can Bid in to Wholesale Electricity Markets

As implemented by FERC's Order 745, DR lowers wholesale market prices.  DR is paid LMP only when it passes a "net benefits" test that ensures the reduction in market prices due to DR is larger than the amount paid to DR providers.  

FERC's annual report on DR calculates that DR reduced peak demand in wholesale markets by about 30 GW.  Wouldn't this necessarily reduce prices and enhance reliability? https://www.ferc.gov/legal/staff-reports/2014/demand-response.pdf

The report also has some discussion of the role that DR played during the polar vortex in early 2014.

 

October 5, 2015    View Comment    

On Energy Quote of the Day: 'Highly Unlikely that Global Carbon-Dioxide Emissions Will Fall Anytime Soon'

Robert Bryce is "not . . . anti-renewable energy"?!! 

Fair enought to summarize his recent paper,  but I think you should properly disclose who the author is. For example, in 2010 he put out a paper claiming that states' renewable portfolio standards were causing dramatically higher prices. It was so poorly researched and argued that the only plausible explanation is that Bryce was simply interested in attacking renewables and that was the best he could do.  Here's one takedown of that paper - http://www.huffingtonpost.com/lewis-milford/manhattan-institute-renewable-electricity-report_b_1321716.html

November 5, 2014    View Comment    

On AEE, Partners, Members Testify on EPA's Clean Power Plan

Tom - How do you think EPA should account for considerable private-sector investments made outside of utility programs?

August 7, 2014    View Comment    

On How Far Can States Go In Supporting Renewable Energy?

Hi Michael - Limiting the law's reach to the utilities' contracts would be helpful in reducing the Constitutional risk. MN argued in this case that the law was a traditional resource planning statute, akin to State regulators telling a utility that a coal-fired plant is not a prudent investment. But the Judge in this case was focused on the words in the statute, and decided that its application to any "person," not just Minnesota utilites, meant that it could apply to entities that have no connection to Minnesota. She found that to be an unconstitutional overreach by Minnesota.

If the law had said Minnesota utilities, not "person," she may have still had a problem with another aspect of the law, not discussed above.  The law prohibits new long-term power purchase agreements with a plant that would increase the State's GHG emissions. But, a new contract is allowed if the project includes GHG offsets that meet the requirements of Minnesota regulators. As the law was written, it required the "project proponent," which could be an out-of-state plant, to obtain approval of Minnesota regulators.  Had the law required a MN entity to get approval, she might have seen things differently.

As for whether or not the law was moot, there are few (if any) new coal-fired power plants being proposed. EPA's new standards for GHGs will require new coal plants to use CCS.  The statute did not include an exemption for facilities using CCS.

April 22, 2014    View Comment    

On The EPA Doesn't Have The Legal Authority To Adopt Its New Power Plant Climate Rules

It would be an interesting case. I think sections 108 and 109 may allow EPA to set a NAAQS, but section 110 requires states to submit "a plan which provides for implementation, maintenance, and enforcement" of the NAAQS. That may be an impossible task. 

March 27, 2014    View Comment    

On The EPA Doesn't Have The Legal Authority To Adopt Its New Power Plant Climate Rules

I don't think you could set a NAAQS for CO2 because it's well mixed in the atmosphere. Emissions from anywhere on Earth will affect the concentration measured in the US.  There would be no way to implement or enforce a NAAQS.

March 27, 2014    View Comment    

On The EPA Doesn't Have The Legal Authority To Adopt Its New Power Plant Climate Rules

I don't think you could set a NAAQS for CO2 because it's well mixed in the atmosphere. Emissions from anywhere on Earth will affect the concentration measured in the US.  There would be no way to implement or enforce a NAAQS.

March 27, 2014    View Comment    

On Court Rules for Cape Wind, Ending a Decade of Failed Opposition

But wait, there's more! On January 21, the town of Barnstable and it's well-financed allies filed a suit in Federal court challenging the Constitutionality of the contract that Cape Wind signed with NStar. They're not asking the court to delay/halt construction, but the suit could interfere with financing.   

March 20, 2014    View Comment    

On Court Rules for Cape Wind, Ending a Decade of Failed Opposition

But wait, there's more! On January 21, the town of Barnstable and it's well-financed allies filed a suit in Federal court challenging the Constitutionality of the contract that Cape Wind signed with NStar. They're not asking the court to delay/halt construction, but the suit could interfere with financing.   

March 20, 2014    View Comment