The Clean Power Plan Endangers Electric Reliability: RTO and ISO Market Perspectives.” In, 2015.Abstract

    Excerpt from the Executive Summary


    The Environmental Protection Agency’s proposed Clean Power Plan (CPP), published in June 2014, raises substantial operational challenges for regional transmission organizations (RTOs). In the CPP, EPA specifies emission reduction targets for 49 of the 50 states, based on EPA’s modeling that purportedly shows that each state can achieve the specified reduction targets through the use of four “building blocks.” States are to develop plans to meet the targets between 2020 and 2030, and are offered “flexibility” to use any combination of the four building blocks specified and/or other means (if approved by EPA) to achieve these targets. The State plans – required by June 30, 2016 (unless an extension is granted) - must specify how each state intends to meet the targets.

    While there are many issues, questions and concerns with the ability of states and utilities to meet EPA’s emission reduction targets based on the use of EPA’s four building blocks (or through other means), building block 2, in particular, raises substantial issues for systems operators and RTO/ISO market operations because it involves changing the current methods of how electricity is dispatched throughout the nation’s bulk power systems.

    Either FERC or the states have always overseen how security constrained economic dispatch is conducted to maintain reliability while cost-effectively serving customers. But, if EPA’s proposed rule becomes final, it, and not the system operators that federal and state regulators have entrusted, will make such critical decisions for our nation’s utility customers regardless of costs.

    Joskow, Paul. “Patterns of Transmission Investment.” In, 2005. Publisher's VersionAbstract

    This paper examines a number of issues associated with alternative analytical approaches for evaluating investments in electricity transmission infrastructure and alternative institutional arrangements to govern network operation, maintenance and investment. The economic and physical attributes of different types of transmission investments are identified and discussed. Alternative organizational and regulatory structures and their attributes are presented. The relationships between transmission investments driven by opportunities to reduce congestion and loss costs and transmission investment driven by traditional engineering reliability criteria are discussed. Reliability rules play a much more important role in transmission investment decisions today than do economic investment criteria as depicted in standard economic models of transmission networks. These models fail to capture key aspects of transmission operating and investment behavior that are heavily influenced by uncertainty, contingency criteria and associated engineering reliability rules. I illustrate how the wholesale market and transmission investment frameworks have addressed these issues in England and Wales (E&W) since 1990 and in the PJM Regional Transmission Organization (RTO) in the U.S. since 2000. I argue that economic and reliability-based criteria for transmission investment are fundamentally interdependent. Ignoring these interdependencies will have adverse effects on the efficiency of investment in transmission infrastructure and undermine the success of electricity market liberalization.

    Brown, Ashley. “Title Conference Paper.” In, 1991.Abstract

    For years, utilities, regulators, and economists have discussed the possibility of opening access to the electric transmission grid. It is now well past the time to cut the Gordian knot in impasse over the debate, and to raise the key strategic question of whether utility owned transmission facilities belong in the ratebase paid for by native-load ratepayers. The question is complex, but requires public discussion and debate as we move inexorably to more competitive bulk power markets. The issue is best approached from three different perspectives: 

    • Who should bear the risk of residual revenue respon-
    sibility for transmission assets?

    • Are actual costs and uses reflected in the allocation of responsibilities for transmission revenues?

    • How can transmission pricing be used to reduce the likelihood of anti-competitive behavior by those entities owning both generation and trasmission.