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NERC’s CEO now concedes that the reserve margin and 1-in-10-year loss of load event criteria are no longer adequate to assess resource adequacy and system reliability.  New tools and metrics are now needed.  The problem is not that the existing metrics are unreasonable — it is how these metrics are currently used.   In most cases reliability metrics focus on the read more…

For the bargain price of $130 billion per year, the US can achieve the President’s carbon removal target with currently available technology.  The question is where should this technology be deployed for maximum effect and economy?  The US is not the largest carbon emitting nation, and our carbon emissions have declined.  Further, we all live in the same atmosphere. Reducing carbon read more…

We are, once again, being warned that cold-weather events could seriously impact grid reliability during this upcoming winter.  While ERCOT, PJM, MISO, and SPP may report more than adequate reserve margins on paper, when you consider the combination of needle winter peaks, early and accelerated retirement of legacy (coal and gas) generation, and/or generators reliant on just-in-time gas or mother read more…

It’s been a while since my last post.  However, this article was too good not to share.   For those familiar with the utility space, unlike competitive firms, a utility’s authorized earnings (i.e., rate base times rate of return) are an input in determining rates rather than the result of net revenues exceeding operating expenses.  Rate base growth, thus, is the key read more…

In a prior blog, I observed that EPA’s “go-it-alone” policies to force carbon emission reductions from existing power plants would likely have untended consequences, such as less reliable, less affordable electricity.  I also questioned EPA’s reliance on nascent carbon capture technology to bolster its claim that many existing plants can remain in operation.   These concerns were affirmed in the comments read more…

Regulation plays an important role in determining the cost and quality of utility services. Thus, participating in the regulatory process is an essential strategy for pro-actively managing your company’s electricity and natural gas costs.  All regulatory commissions determine: (1) the utility’s overall revenue requirement or cost of service to provide the utility a reasonable opportunity to earn a reasonable return read more…

In last week’s blog, I reported that the EPA had proposed a rule requiring the use of carbon capture and hydrogen for new and existing power plants.  I also observed that neither technology has yet to be successfully deployed at scale, and neither can be characterized as the best available technology.  If adopted, the proposed rule would make it all read more…

With the recent harsh winter storm disruptions in its rear-view mirror, NERC issued its first ever top-level call to action on winter reliability (see article 1 below).  This level 3 action (the highest alert level) calls on generation and transmission owners to report their winter weatherization plans by October 6.  With the continued retirement of dispatchable generation, it is no read more…

Continuing from my last post regarding poor governance, both the EPA and Federal Appeals Court have taken recent actions that will affect grid reliability and future electricity costs.   With respect to the EPA, on April 5, the EPA moved to strengthen a mercury pollution rule for coal-fired power plants on the assumption that the vast majority of affected generators are read more…

It is unfortunate, if not shameful, that an important government agency is implementing rules that could seriously compromise the reliability of the electricity grid.  Yet, it is clear that EPA considered only the improvement in air quality and ignored the downstream impact of its “Good Neighbor” rule — higher costs and diminished reliability of electricity – in determining that the read more…