Excerpt from the Executive Summary:
The Department of Public Utility Control should require the electric distribution companies to procure a variety of Alternative Transitional Standard Offers that will promote the generation of electricity through renewable sources or the efficient use of energy resources in Connecticut. Such alternative Offers have significant potential to improve market stability and efficiency for all customers, to ameliorate environmental impacts of many kinds by reducing the combustion of fossil fuels, and to eventually reduce customer bills.
Excerpt from the Executive Summary:
The five state programs examined in Part One include: Georgia’s natural gas competition program at Atlanta Gas Light Co., New York’s Consolidated Edison’s electric restructuring program, Massachusetts’ electric competition program (statewide), Ohio’s electric competition program (statewide), and Texas’ electric competition program (statewide). Part One analyzes the terms of service provided to residential customers through both Default Service and the offers made by competitive suppliers; the consumer protection programs and policies adopted by each state; the extent of the development of the retail market; and the scope and type of competitive suppliers who have sought to obtain residential customers.
This white paper is a primer on wholesale market design and provides background for the open meeting workshop scheduled by the Public Utility Commission of Texas for November 1, 2002. The paper is divided into six sections:
1. Reasons for this rulemaking;
2. Measures of an efficient, sustainable market;
3. Architecture of power markets;
4. Elements of a power market;
5. Basic economics of congestion management and day-ahead markets;
6. Descriptions of wholesale electric markets around the world.
The essay sets out what electric markets might look like if the pricing proposed in value of solar studies were adopted for every resource.
limited retail wheeling experiment could result in two
ironies: (1) Edison may still be required to wheel power to
retail customers, but at rates less likely to be fully
compensatory, and (2) its generation will be more devalued
than it would have been without the suit.
Excerpt from the Introduction:
The notion of an Independent System Operator (ISO) has gained some currency in discussions of electricity market restructuring. There are significant advantages in this approach, but the key to success will be in a careful specification of the functions and responsibilities of the ISO. Simple independence of the individual participants is not enough; the ISO should support an efficient, competitive market. There is wide recognition that there must be a system operator coordinating use of the transmission system. This control of the use of the transmission grid means control of the dispatch, at least at the margin, because adjusting the dispatch is the principal (or, in some cases, only) means of affecting the flow of power on the grid. That this system operator should also be independent of the existing utilities is attractive in the greater simplicity of achieving equal treatment of all market participants. The ISO would be providing a service, but would not be competing in the energy market. Hence, the easy-to-state but hard-to-enforce principle of comparability would be transformed into an easier to enforce principle of non-discrimination.
Excerpt from the executive Summary:
Coordination through a well designed pool-based electricity market can be a large part of the solution to the problems of promoting open access and competition. Experience in other countries strongly supports this conclusion and the key elements travel well. Analysis of the underlying conditions of electricity supply highlights the role of effective pooling arrangements in cutting through the complexity of the electricity system and exploiting the benefits of coordination for competition.
The "Poolco" model embodies the lessons of best practice found elsewhere and provides a coherent framework for addressing the key elements of efficient pricing, open access, and market choices, all while preserving the necessary requirements for operating reliability. This generic Poolco model has been advanced by public and private utilities in different locations and different circumstances. The broad attraction of the Poolco proposal across the country and in other nations stems in part from the gradual recognition that the Poolco is not a radical proposal. Rather, Poolco recognizes what exists today and what must happen under any system for a competitive electricity market.
Any efficient system for organizing the electricity market should include least-cost dispatch as a centerpiece. To be sure, the least-cost dispatch concentrates only on the short-run and the greater part of the value of a competitive system is to be found in the long-run decisions that will control contracting and investment. However, least-cost dispatch based on participant bids is the ideal short-run outcome that would appear in a competitive market if it were possible for all the many participants to define the appropriate property rights and conduct all the complex trades in the network. Because of the complexity of these trades and the lack of workable definitions of key physical property rights, the common judgment is that a system operator is needed to coordinate the dispatch, at least for some fraction of the flexible plants. Since the operator must function to provide coordination services, least-cost dispatch provides the natural framework that replicates as close as possible the ideal outcome of the short-term competitive market. The Poolco model accepts and builds on this least-cost dispatch. And working from this starting point, the other features needed for the market can be derived within a consistent framework. The bidding prices and least-cost dispatch provide naturally the level playing field for all market participants, both large and small. There is no special advantage to size in benefitting from dispatch diversity and acquiring backup supplies. These services are available to all on the same basis. The separation of ownership from control guarantees open access to the dispatch and related services to facilitate entry and the pursuit of the forces of competition.
to electric power transmission lines and pricing for such access. Somewhat surprisingly, since there has
been a common assumption that this is the domain of federal regulators, the author is able to point out
numerous bases for the exercise of jurisdiction by state regulators, by direct grants of authority, or indirectly
in the discharge of other responsibilities and duties.