America got a rare unanimous decision from the Supreme Court this week in a case that has widespread implications for our electric grid, as well as the markets and regulations that govern and move it.
The case was Hughes v. Talen Energy Marketing (docket no. 14-614). The Court decided it 8-to-0, with Justice Ginsburg writing the opinion.
It centered on a Maryland decision to guarantee fixed revenues for an electric generator. Typically, generators are paid through wholesale markets, regulated by the Federal Energy Regulatory Commission (FERC). These wholesale markets keep prices down and costs competitive by only paying for the lowest-cost resources necessary to keep the system running. By guaranteeing money for a generator, no matter how competitive it was in the market, Maryland effectively muted the price signal and ensured that electricity from this particular resource would be paid – regardless of how costly it might be for consumers. Read More
Wait – Ohio utility regulators did what?
The $6-billion bailout of uneconomical coal and nuclear plants is bad enough. But the decision by the Public Utilities Commission of Ohio to let two power companies saddle ratepayers with their bad debt also sets a dangerous precedent that could have ramifications for consumers in other states.
This is more than a local rate case. It’s about traditional utilities going on the offense against new and cleaner power providers that offer cheaper rates in a competitive energy market – a drama playing out nationwide.
All eyes are now on the federal agency overseeing wholesale electricity markets to see if the Ohio deal will stand or fall. Read More
Localized power grids that have the ability to disconnect from the main, centralized grid – known as microgrids – have become one of the electricity industry’s latest darlings. Particularly after Hurricane Sandy knocked out electric generators and wires along the Northeast coast in 2012, urban and utility planners have been devising localized grids that can operate autonomously, strengthen the overall power system’s reliability and resilience, and protect critical infrastructure like hospitals, water treatment facilities, and police stations in the event of a grid-wide outage.
There are environmental benefits to microgrids as well. Clean energy advocates tend to rave about the ability to integrate growing amounts of distributed energy resources, including solar, wind, energy storage, and demand response, which rewards customers for conserving energy. And by avoiding the long-distance transmission of electricity, microgrids and their distributed generators can also reduce energy losses and increase efficiencies. These outcomes all have the potential to curb pollution, while cutting costs for utilities and their customers.
More importantly, as microgrids expand, they prompt us to imagine broader opportunities – and recent developments in Illinois are exploring new frontiers. Read More
Imagine a utility receives $57 million from the Department of Energy and a matching amount from its customers, then uses that money to demonstrate how new technologies could save millions more. Sounds like a pretty sweet deal, right? Not if you’re FirstEnergy, whose business model doesn’t call for saving money.
FirstEnergy – serving several states in the Mid-Atlantic region, including Ohio where the power company is currently requesting a $4 billion bailout of its uneconomical power plants – recently filed a long-term infrastructure-improvement plan in Pennsylvania, setting out its strategy for modernizing the grid. And despite having seen the benefits firsthand, the utility didn’t include voltage optimization – or using technology to “right-size” the amount of voltage customers receive – in its plan.
Since utilities likely won’t modernize the grid on their own, Environmental Defense Fund (EDF) often intervenes before state public utility commissions. And in this case, EDF recommends the Pennsylvania Public Utilities Commission (PUC) should not approve FirstEnergy’s grid modernization plan unless it includes voltage optimization. Read More
FirstEnergy’s plea to keep four aging power plants alive will cost Ohio customers almost $4 billion, according to a new study out today by the Institute for Energy Economics and Financial Analysis (IEEFA). The proposal is currently in front of the Public Utilities Commission of Ohio (PUCO).
The report, entitled A $4 Billion Bailout in the Buckeye State, outlines in clear terms how the utility giant hopes to force Ohioans to subsidize the continued operation of its outdated power plants, put customers on the hook for those plants’ escalating costs, and ensure future profits for FirstEnergy executives and shareholders. Read More
Ohio utilities FirstEnergy and AEP, as readers of this blog know too well, want the Buckeye State to bail out their uneconomic power plants. Combined, their proposals before the Public Utilities Commission of Ohio (PUCO) would run Ohioans nearly $6 billion in increased costs. We understand where the companies’ greedy desire for subsidies comes from, but the arguments for them have become downright silly.
Let’s review why FirstEnergy and AEP’s bailout justifications don’t hold up: Read More