Energy Exchange

Dear FirstEnergy, America doesn’t need your coal plants

Why do grocers mark down the price of asparagus in the spring, or strawberries in the summer? Because they’re in season and stores have excess supply, and they need to increase demand by cutting prices. The lower prices are a sign, or “price signal,” of excess supply, and the grocers are following the economic law of supply and demand.

Electricity markets follow the law of supply and demand, too. Falling electricity prices are a price signal that we have more power plants than we need. The Federal Energy Regulatory Commission (FERC), which oversees our nation’s electric grid, reports on wholesale electricity prices, and their latest State of the Markets report is an eye-opener.

The report shows that we’re retiring old coal plants at a fast clip, but we’re adding new natural gas plants at an even faster clip – causing power prices to plummet. In PJM, the largest regional electricity market in the country, 1.9 GW of coal plants closed in 2017 as 2.8 GW of new natural gas plants were added. Read More »

Also posted in FirstEnergy, Illinois, Ohio / Comments are closed

Recommendations for a resilient grid, no federal coal bailout required

By Michael Panfil, Rama Zakaria

In the past year, the U.S. Department of Energy (DOE) has used the issue of grid resilience as cover for an aggressive campaign to funnel a multi-billion-dollar yearly bailout to the owners of old, uneconomic coal and nuclear power plants. Although this DOE effort was rightly rejected by the Federal Energy Regulatory Commission (FERC) in January, the issue of resilience remains.

In denying DOE’s proposal, FERC (the agency responsible for overseeing our nation’s electric grid) asked regional grid operators to report practices they are currently implementing to ensure a reliable, resilient electric grid. In March, grid operators filed their reports, which generally concluded that the grid is resilient and we don’t need uneconomic coal and nuclear plants to keep the lights on.

Today, Environmental Defense Fund (EDF) – alongside numerous other stakeholders from business, academia, industry, and public interest organizations – submitted to FERC individual and joint comments on these grid operator reports and the topic of grid resilience. Read More »

Also posted in Clean Energy, Market resilience / Read 2 Responses

Fundamentals should guide FERC on PJM’s misguided state policy proposal

Federal regulators are currently considering a proposal that could fundamentally alter how our nation’s power markets work in tandem with state-crafted public policies.

The change being considered, submitted by the nation’s largest grid operator, PJM, would increase electricity prices and undermine state policies in the 13 states and D.C. where PJM operates. Today, Environmental Defense Fund (EDF), alongside other clean energy advocates, filed in opposition to this proposal.

PJM’s proposal before the Federal Energy Regulatory Commission (FERC) is dense and complex (for a great primer on the universe of issues surrounding a similar proposal, see this blog post by NRDC and this article by Vox’s David Roberts). At its core, however, PJM’s proposal centers on a subject that is elemental to the electricity sector: the interplay and interaction between states and federal regulators. PJM should not thrust itself into a public policymaking role, nor should FERC become judge and jury of state policies. Instead, PJM and FERC should facilitate state policy choices. Read More »

Also posted in Clean Energy, Illinois, Market resilience, New Jersey, Ohio, Pennsylvania / Comments are closed

New study answers the question, ‘What is grid resilience?’

By Rama Zakaria, Michael Panfil

Whether or not our electric grid is “resilient,” and what if anything should be done to make the grid more resilient, has been a topic of intense scrutiny in the past year.

The stakes in this debate reached new dimensions last fall with a highly controversial proposal by Sec. Rick Perry and the U.S. Department of Energy (DOE), which claimed that the resilience of the electric grid is threatened by the premature retirement of uneconomic coal and nuclear plants. DOE’s flawed proposal – to bail out these plants through a profit-guarantee mechanism – was considered and unanimously rejected in January by the Federal Energy Regulatory Commission (FERC), the agency charged with overseeing our nation’s electric grid. DOE’s proposal, in short, was an incredibly bad idea.

When FERC dismissed DOE’s proposal it opened a new proceeding, asking a series of questions around the topic of grid resilience.

A Customer-focused Framework for Electric System Resilience, a new report authored by Alison Silverstein and Grid Strategies, aims to answer these questions. The report, commissioned by Environmental Defense Fund and Natural Resources Defense Council, recommends a customer-centric framework for evaluating electric system resilience and concludes that the most effective resilience solutions center upon the wires connecting the grid: distribution, and to a lesser extent transmission. By contrast, generation-related solutions – like keeping dirty coal and uneconomic nuclear plants online past their retirement dates – are the least effective for improving resilience. Read More »

Also posted in Clean Energy, FirstEnergy, Grid Modernization, Market resilience, Utility Business Models / Comments are closed

Clean energy bill: A roadmap for New Jersey

Today, New Jersey lawmakers will be voting on a “Clean Energy Bill,” a piece of legislation that can help the state transition to a 21st-century clean energy economy, and set us on a path to becoming a national clean energy leader once again.

Gov. Phil Murphy’s pledge to source 100 percent of the state’s electricity from clean energy by 2050 points us in the right direction. But we need a roadmap to get there – one that will boost the state’s economy and reduce harmful pollution.

The clean energy bill paves the way to invest in clean energy – a critical step toward achieving a more resilient, healthier future for New Jerseyans. We can only move forward if elected officials vote for it, accelerating the adoption of renewable energy and energy efficiency. Read More »

Also posted in Clean Energy, Energy Efficiency, New Jersey, Solar Energy, Wind Energy / Comments are closed

California’s disadvantaged communities could benefit from time-of-use electricity prices, but it won’t happen automatically.

By Lauren Navarro, senior policy manager, and Jamie Fine, senior economist

It’s no secret that California is a clean energy leader. The state is on track to meet its renewable energy goals, with many utilities hitting targets ahead of schedule. In order to transition to a system that can handle increased levels of clean energy like solar and wind, we need innovative solutions to take advantage of these resources. One low-cost solution is to change how we pay for electricity – making it cheaper when it is powered by clean resources and more expensive when powered by fossil fuels with time-of-use pricing. Utilities are on their way to bringing this to Californians, piloting the new rates in advance of a full rollout in 2019 and building on the successful rollout of these rates to commercial customers a few years ago.

For many Californians, the shift to time-of-use pricing will be new, but not impact their bills very much and could even save them money, particularly for people who live along the coast. However, for some customers – communities with lower incomes in hotter areas of the state that are more vulnerable to possible summertime bill increases – shifting when they use electricity can be harder, and without help their costs could increase. Rightly, lawmakers and regulators have pushed for extra attention for these vulnerable customers as the state moves toward time-of-use rates. While utilities acknowledge this discrepancy as an issue, none are offering sufficient, robust solutions (you can learn more about this in our recent blog).

A new bill introduced last week by California Assemblymember Joaquin Arambula would add that utilities must consider how time-of-use rates could impact low-income customers in disadvantaged communities before putting them on the new rates. It is vital to protect the most economically and environmentally vulnerable Californians from financial hardships. And the answer is not easy. All Californians stand to benefit from rates that could lower pollution and integrate more renewables – yet, we don’t want to heedlessly roll-out the rates in a way that results in higher electricity bills for customers with low incomes. Read More »

Also posted in California, Clean Energy, Demand Response, Energy Efficiency, Energy Equity, General, Time of Use / Comments are closed