FERC

A new study shows that electricity pricing policies may become a major obstacle to electric vehicle (EV) affordability, but time-of-use pricing – a hallmark of competitive markets – could be the solution.
 

Technology innovation driven by market forces has unlocked abundant domestic supplies of natural gas from unconventional geographic formations, resulting in enormous consumer benefits– namely, lower electricity prices and cleaner air. This natural gas success story shows how market forces drive innovation better than regulation, and should serve as an important lesson for policy makers tempted to intervene in the markets in response to transient market price signals.
 

Competitive electricity markets will stimulate plug-in hybrid-electric vehicle (PHEV) technology, facilitate integration of PHEVs with the power grid, and unlock consumer benefits. This message emerged during a conference sponsored by COMPETE and the University of Illinois-Springfield that explored the future of plug-in hybrid electric vehicles and the smart grid.

The COMPETE Coalition will sponsor a day-long conference October 5th to discuss the opportunities and challenges facing national electric vehicle deployment, grid modernization and how they tie into America’s Smart Grid future.
 
The free conference – Electric Vehicle Technology and Grid Modernization: How PHEVs and Smart Grid Come Together – takes place at the Phoenix Park Hotel in Washington, D.C., and is co-sponsored by the Center for Business and Regulation, College of Business and Management, University of Illinois-Springfield.
 

The New York Independent System Operator (NYISO) credited competitive markets with reducing air pollution by attracting investment in power plant efficiency and clean energy sources, according to a report in Restructuring Today and Platts Electric Power Daily.
 
Stephen Whitely, NYISO’s CEO, stated that competition has combined with carbon control programs like the Regional Greenhouse Gas Initiative (RGGI) to sharply lower emissions of sulfur dioxide, nitrogen oxides and carbon dioxide.

“Competition in wholesale electricity markets has stimulated investments in cleaner generation, increased the use of renewable resources – such as wind power – and encouraged operating changes to improve the overall efficiency of power plants,” said Whitely. 

Multiple layers of regulatory oversight protect our nation’s competitive electricity markets from systemic risks such as those that led to the recent financial market crisis. Much of the nation’s electric industry has undergone restructuring to promote competition and consumer benefits, but regulation and oversight at the federal and state levels are as strong as, or stronger, than they have ever been.
 

Innovative smart grid and energy technology solutions can help achieve economic and environmental goals if customers have access to dynamic pricing. That message, and the role competitive markets play in these innovations, was front and center in remarks from national policy leaders at the recent National Town Meeting on Demand Response and Smart Grid. 
 
“Creating a smart grid is an essential part of the energy revolution,” said Congressman Ed Markey (D – MA) in a keynote address, before predicting that smart meter deployment will rise ten-fold over the next decade. “A global revolution in clean energy is needed, and competition between all for leadership in new energy will create jobs.”
 
Innovative new smart grid technologies are already springing up across the country, spurred on by competition. “Because we have organized markets, we are ahead in our ability to bring technology and demand response to consumers,” said Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, during a roundtable on the future of smart grid policy. Wellinghoff cited PJM Interconnection’s 9,000 megawatts of dispatachable demand and Plug-in Hybrid Electric Vehicle pilot program, as well as Constellation NE’s VirtuWatt technology.

America’s march toward a clean energy future through competitive markets got a big boost today when the U.S. Senate unanimously confirmed the nominations of Phillip Moeller and Cheryl LaFleur to the Federal Energy Regulatory Commission (FERC).
 
FERC has responsibility as the consumer watchdog for our national energy infrastructure and future, and for the past two decades or more has pursued a market-based policy agenda in the public interest. Both Moeller and LaFleur are exceptional additions to the Commission, and both Commissioners possess a wealth of experience and a keen understanding of FERC’s long-standing policies supporting competition in electricity markets.
 

Regional electricity markets are well-structured and well-regulated, and by delivering competitive results are providing real economic and environmental benefits to consumers, the Independent Market Monitors for the majority of regional transmission operator/independent system operator (RTO/ISO) markets said at a COMPETE-sponsored Capitol Hill policy briefing. These markets are creating innovation, new investment and competitive electricity rates – all the while ensuring system reliability, the monitors said.

During last week’s regular open meeting, staff with the Federal Energy Regulatory Commission presented their 2009 State of the Markets Report, and the outcome for energy consumers was profound.  Prices for natural gas were down by 50 percent across the country, and as a result electricity rates declined proportionately in the organized competitive markets, where gas is a key generation fuel. Costs for both natural gas and electricity were at the lowest levels seen since at least 2002 – even earlier in some regions, FERC staff reported.