Publications

2015
Edelston, Bruce. “FERC Order 1000: A Solution Looking for a Problem?” In, 2015.Abstract
Edelston, Bruce. FERC Order 1000: A Solution Looking for a Problem?" Presentation to the Harvard Electricity Policy Group's 81st Plenary Session, Palm Beach, FL, December 2015."
panel_1_edelston.pdf
Pfeifenberger, Johannes. “Hidden Values, Missing Markets, and Electricity Policy: The Experience with Storage and Transmission.” In, 2015.Abstract
Pfeifenberger, Johannes. Hidden Values, Missing Markets, and Electricity Policy: The Experience with Storage and Transmission." Presentation to the Harvard Electricity Policy Group's 79th Plenary Session, Washington, DC, June 2015."
2015-05-25_hepg_hidden_values_pfeifenberger-chang.pdf
Chao, Henry. “NYISO Transmission Planning & Cost Allocation.” In, 2015.Abstract
Chao, Henry. NYISO Transmission Planning & Cost Allocation." Presentation to the Harvard Electricity Policy Group's 81st Plenary Session, Palm Beach, FL, December 2015."
panel_1_chao.pdf
"Quadrennial Energy Review: Energy Transmission, Storage, and Distribution Infrastructure".” In, 2015. Publisher's VersionAbstract
U.S. Department of Energy. Quadrennial Energy Review: Energy Transmission, Storage, and Distribution Infrastructure. April 2015.
Huntoon, Steve. “Transmission: Building the Right Stuff.” In, 2015.Abstract
Huntoon, Steve. Transmission: Building the Right Stuff." Presentation to the Harvard Electricity Policy Group's 81st Plenary Session, Palm Beach, FL, December 2015."
panel_1_huntoon.pdf
Nodal, Simplex. “Investigate Electricity Markets by Making Your Own: Graphically Build and Solve a Nodal Electricity Market on Your iPhone or iPad.” In, 2015. Publisher's VersionAbstract
Simplex Nodal. Investigate Electricity Markets by Making Your Own: Graphically Build and Solve a Nodal Electricity Market on Your iPhone or iPad." July 2015
Brown, Ashley. “Open Transmission Access: Scope, Dimension and Meaning.” In, 2015.Abstract
Brown, Ashley. Open Transmission Access: Scope, Dimension and Meaning." Presentation to the Segundo Simposio Internacional de Ingenieria, Asuncion, Paraguay, November 2015
asuncion_nov_4-5_2015_acb.pdf
Borenstein, S., and JB. Bushnell. “The U.S. Industry after 20 Years of Restructuring.” In, 2015. Publisher's VersionAbstract

Prior to the 1990s, most electricity customers in the U.S. were served by regulated, vertically-integrated, monopoly utilities that handled electricity generation, transmission, local distribution and billing/collections. Regulators set retail electricity prices to allow the utility to recover its prudently incurred costs, a process known as cost-of-service regulation. During the 1990s, this model was dis- rupted in many states by “electricity restructuring,” a term used to describe legal changes that allowed both non-utility generators to sell electricity to utilities – displacing the utility generation func- tion – and/or “retail service providers” to buy electricity from gen- erators and sell to end-use customers – displacing the utility pro- curement and billing functions. We review the original economic arguments for electricity restructuring, the potential winners and losers from these changes, and what has actually happened in the subsequent years. We argue that the greatest political motivation for restructuring was rent shifting, not efficiency improvements, and that this explanation is supported by observed waxing and wan- ing of political enthusiasm for electricity reform. While electricity restructuring has brought significant efficiency improvements in generation, it has generally been viewed as a disappointment be- cause the price-reduction promises made by some advocates were based on politically-unsustainable rent transfers. In reality, the electricity rate changes since restructuring have been driven more by exogenous factors – such as generation technology advances and natural gas price fluctuations – than by the effects of restructuring. We argue that a similar dynamic underpins the current political momentum behind distributed generation (primarily rooftop solar PV) which remains costly from a societal viewpoint, but privately economic due to the rent transfers it enables.

Hogan, Michael. “Can Low-Carbon Resources Thrive through Markets?” In, 2015.Abstract
Hogan, Michael. Can Low-Carbon Resources Thrive through Markets?" Presentation to the Harvard Electricity Policy Group's 80th Plenary Session, Houston, TX, October 2015."
panel_2_m_hogan.pdf
Tierney, Susan, and Paul Hibbard. Carbon Control and Competitive Wholesale Electricity Markets: Compliance Paths for Effecient Market Outcomes. Analysis Group, 2015.Abstract

Excerpt from the Executive Summary

Acting under its existing authorities under the Clean Air Act (CAA), the U.S. Environmental Protection Agency (EPA) has been developing proposals designed to reduce carbon dioxide (CO2) emissions from new and existing fossil-fuel power plants in the United States.

Power production is the nation’s largest source of carbon emissions, contributing 37 percent of all CO2 emissions in the U.S. This will be the first time that federal policy will broadly address CO2 emissions from the power sector, and EPA’s new policies will affect over half of the nation’s existing generating capacity.

EPA and the electric sector have a long track record of successful market-based, regional emission-allowance-trading programs, which can serve as a template for the regulation of CO2 emissions.

Such programs – for example, the Acid Rain sulfur dioxide (SO2) trading Program, the “NOx SIP Call,” and the Regional Greenhouse Gas Initiative (RGGI) – provide price signals to power plant owners so that they can make their own choices about their lowest-cost path to compliance. These programs have proven to allow for environmental improvements at much lower cost to both power plant owners and electricity consumers.

There is a natural fit between market-based emission-control programs and competitive wholesale power markets.

Most of the power plants covered by EPA’s Clean Power Plan operate in competitive wholesale electric markets administered by an Independent System Operator (ISO) or Regional Transmission Organization (RTO) (collectively “RTO”). These regions span more than two-thirds of the states, encompass 70 percent of the nation’s generating capacity, and serve the electricity needs of twothirds of the American people.

analysis_group_clean_power_plan_markets_may_2015_final.pdf
O'Connor, Philip R., and Erin M. O'Connell-Diaz. “Electricity Choice Works.” 2015.Abstract
O'Connor, Philip R. and Erin M. O'Connell-Diaz. Electricity Choice Works." COMPETE, July 2015."
massey_oped.pdf
Hogan, William W.Electricity Market Design: Hidden Values.” In, 2015.Abstract
Hogan, William. Electricity Market Design: Hidden Values." Presentation to the Harvard Electricity Policy Group's 79th Plenary Session, Washington, DC, June 2015."
hogan_hepg_062515.pdf
Hogan, William W.Electricity Markets and the Clean Power Plan.” In, 2015. Publisher's VersionAbstract
The Environmental Protection Agency issued a final rule that defines a broad and complicated set of standards for controlling carbon dioxide (CO2) emissions from affected electricity generating units. (Environmental Protection Agency, 2015b) The proposed national average reduction by 2030 is 32% from the 2005 level of emissions, about half of which has already occurred. (Environmental Protection Agency, 2015j) The rules for new power plants are relatively straightforward and imply little more than reinforcing the current economic choice of natural gas over coal fired generation, given current projections for the price of natural gas. The Clean Power Plan rules for existing power plants arise under a different section of the Clean Air Act and present a more complicated picture. The result has implications for the nature and degree of future limitations on carbon dioxide emissions from the electricity sector. In addition, some versions of the possible implementation plans could have material implications for the operations of Regional Transmission Organizations under the regulations of the Federal Energy Regulatory Commission. The purpose here is to highlight some of the possible directions for relevant policies of electricity system operators.
O'Connor, Philip R., and Erin M. O'Connell-Diaz. “Evolution of the Revolution: The Sustained Success of Retail Electricity Competition.” In, 2015.Abstract
O'Connor, Philip R. and Erin M. O'Connell-Diaz. Evolution of the Revolution: The Sustained Success of Retail Electricity Competition." COMPETE, July 2015."
massey_evolution_of_revolution.pdf
Terry, Cheryl. “Hidden Value, Missing Money, and Electricity Markets.” In, 2015.Abstract
Terry, Cheryl. Hidden Value, Missing Money, and Electricity Markets." Presentation to the Harvard Electricity Policy Group's 79th Plenary Session, Washington, DC, June 2015."
terry_panel_2.pdf
The Clean Power Plan Endangers Electric Reliability: RTO and ISO Market Perspectives.” In, 2015.Abstract

Excerpt from the Executive Summary

Background

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.

epg_ferc_filing.pdf
Mather, Barry. “Distributed PV Impacts on the Electric System.” In, 2015.Abstract
Mather, Barry. Distributed PV Impacts on the Electric System." Presentation to the Harvard Electricity Policy Group 78th Plenary Session, Half Moon Bay, CA, March 2015."
2_mather.pdf
Tierney, Susan, Paul Hibbard, and Craig Aubuchon. “Electric System Reliability and EPA's Clean Power Plan: Tools and Practices."” In, 2015.Abstract
Tierney, Susan, Paul Hibbard, and Craig Aubuchon. Electric System Reliability and EPA's Clean Power Plan: Tools and Practices." Analysis Group. Boston, MA, February 2015."
electric_system_reliability_and_epas_clean_power_plan_0215.pdf
Taylor, Jerry.The Conservative Case for a Carbon Tax.” In, 2015.Abstract
Costly and economically inefficient command-and-control greenhouse gas regulations are firmly entrenched in law, and there is no plausible scenario in which they can be removed by conservative political force. Even were that not the case, the risks imposed by climate change are real, and a policy of ignoring those risks and hoping for the best is inconsistent with risk management practices conservatives embrace in other, non-climate contexts. Conservatives should embrace a carbon tax (a much less costly means of reducing greenhouse gas emissions) in return for elimination of EPA regulatory authority over greenhouse gas emissions, abolition of green energy subsidies and regulatory mandates, and offsetting tax cuts to provide for revenue neutrality. Arguments that unilateral action by the United States produces little climate benefit, that a carbon tax will expand the size of government, that a carbon tax is a regressive, that adaptation and geo-engineering is preferable to emissions constraint, that economists cannot confidently design a carbon tax that does more good than harm, that the legislative process cannot deliver a carbon tax worth embracing, and that promoting a carbon tax puts conservatives on a slippery political slope are explored and found wanting.
taylor_conservative_case_for_a_carbon_tax.pdf
Wara, Michael. “The EPA Clean Power Plan: What Now?-Wara.” In, 2015.Abstract
Wara, Michael. The EPA Clean Power Plan: What Now?" Presentation to the Harvard Electricity Policy Group's 80th Plenary Session, Houston, TX, October 2015."
panel_3_wara.pdf

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