Philip Hanser

The State of Performance-Based Regulation in the U.S. Electric Utility Industry

Abstract Performance-based regulation (PBR) has made substantial inroads in the electric utility industry, with at least 28 electric utility companies in 16 states presently operating under some form of comprehensive PBR. Many states have replaced (or combined) targeted incentive plans in their electric utility industries with broad-based PBR plans similar to those that are the predominant form of regulation in the telecommunications industry.

Deregulation and Monitoring of Electric Power Markets

Abstract As “ideal” competition is either an unattainable or unsustainable goal, market monitoring activities should focus on the achievable alternative of “workable” competition.

Renewable integration model and analysis

The integration of significant amounts of renewable resources poses a number of challenges for system planners. We formulated a methodology that quantifies the amount of conventional generation resources and the associated fixed and variable costs necessary to integrate portfolios of renewable resources. We designed and developed a model, The Renewable Integration Model (RIM) that provides system planners a range of flexibility to simulate and estimate the system impact associated with renewable generation based on resource-specific characteristics. From there, RIM can be used to estimate the incremental operational costs associated with accommodating variable generation resources like wind and solar energy.

One-Part Markets for Electric Power: Ensuring the Benefits of Competition

In order to ensure adequacy of generation supply, the utility industry has traditionally been required to carry two to three years of planning reserves, e.g., 20 percent over projected peak demand. Closely related, they have often used two-part (capacity/energy) pricing to buy and sell generation (real power) output. This paper argues that continued use of this approach, especially continuing to require planning reserves under power pool or NERC or other mandate, will undermine the benefits of power industry restructuring. In contrast, a market with no administered capacity requirement, but a one-part commodity price reflecting both marginal operating costs and capacity scarcity, will have many benefits. In particular, it will induce efficient capacity planning—which has been the real problem in the past (not inefficient dispatch) and which is where the real opportunities for future efficiency gains lie. It will also encourage demand-side participation in peaking “reserves”, and forward contracting for risk protection and expansion financing, both of which also reduce generation market power. Independent system operator (ISO) planners and regulatory agencies should concentrate more attention on encouraging demand-side participation and forward contracting, and less on the sufficiency of physical reserves or on customer protection against possible high market prices.

Re-engineering DSM: Opportunities through information and integration

Abstract Virtually all of todays DSM suffers from a supply-side orientation. Utilities have the opportunity now to re-engineer their organizations by integrating their DSM activities with other company functions through an expanded approach to information resources and technology.

Lessons from the first year of competition in the California electricity markets

Abstract The start of the California markets generally has been successful, with no large problems in the mechanics of their operation. But the data provides grounds for some concern about market power, particularly during high-load periods, and about efficiency in the ancillary services markets.

Chapter 10 – Riding the Wave: Using Demand Response for Integrating Intermittent Resources

Wind and solar power penetration is expected to increase dramatically over the next decade. The chief concern for system operators and planners is the effect of wind variability and unpredictability on system operation and stability. Although traditional generation resources can assist in this integration, demand-side resources can also play a role. This chapter reviews the operational and technical challenges of integrating renewable generation and focuses on aspects of flexible operating services such as load-following and regulation in the context of designing load-control products that successfully provide such ancillary services. This chapter further discusses traditional and new tools that have been used in wind integration studies or the design of load-control products. The chapter also discusses the optimal use of demand response vs. generation, the costs involved in deploying demand response as an ancillary service resource, and the benefits of substituting it for generation.

Riding the Wave: Using Demand Response for Integrating Intermittent Resources

Wind and solar power penetration is expected to increase dramatically over the next decade. The chief concern for system operators and planners is the effect of wind variability and unpredictability on system operation and stability. Although traditional generation resources can assist in this integration, demand-side resources can also play a role. This chapter reviews the operational and technical challenges of integrating renewable generation and focuses on aspects of flexible operating services such as load-following and regulation in the context of designing load-control products that successfully provide such ancillary services. This chapter further discusses traditional and new tools that have been used in wind integration studies or the design of load-control products. The chapter also discusses the optimal use of demand response vs. generation, the costs involved in deploying demand response as an ancillary service resource, and the benefits of substituting it for generation.

The Design of Tests for Horizontal Market Power in Market-Based Rate Proceedings

Abstract By incorporating demand characteristics, transmission limitations, and a behavioral model of the decision to exercise market power, FERC’s SMA Order is an improvement over the previous hub-and-spoke test. However, it appears that the simple mechanical application of the SMA is unlikely to yield satisfactory results.

The Repurposed Distribution Utility: Roadmaps to Getting There

This chapter discusses the decisions utilities face as they consider a transformation into the Repurposed Distribution Utility (RDU). While the RDU and its various incarnations have been widely heralded as the distribution utility’s future, there has been scant discussion about how the distribution utility in its current state can begin to make the transformation. The authors explore the challenges utility planners face when integrating distributed energy resources and the planning and operational changes required to make the RDU transition. Furthermore, they present recent examples of planning and operational changes from utilities in the midst of the RDU transition.