Electricity Policy

Sat08272016

Last updateThu, 18 Aug 2016 9pm

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It Takes a Portfolio: A Broad Spectrum of Policies Can Best Halt Climate Change

It Takes a Portfolio: A Broad Spectrum of Policies Can Best Halt Climate Change

 By Jeffrey Rissman

Market failures, political barriers, and other challenges help illustrate why many policies affect only limited segments of the economy. A broad spectrum of policies designed to overcome these market flaws can better arm policy makers with the tools they need to tackle climate change.
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olitical consensus is coalescing around the urgent need to reduce greenhouse gases and mitigate the worst impacts of climate change, but little agreement exists on which policies should be used to reduce emissions.  Regulatory policies like the Clean Power Plan and vehicle fuel economy standards require states or businesses to satisfy certain performance outcomes, while “market-based” policies incentivize emissions reductions by economic means, primarily taxes and subsidies.  Both types of policy are needed to make the transition to a clean energy system with superior economic outcomes.

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Charge Without a Cause? Assessing Electric Utility Demand Charges on Small Consumers

Charge Without a Cause?  Assessing Electric Utility Demand Charges on Small Consumers

 By Paul Chernick, John T. Colgan, Rick Gilliam, Douglas Jester, and Mark LeBel

Imposing demand charges to which customers cannot properly respond and that have no relationship to controlling utility costs would be ineffective and punitive. There are simpler, better means to achieve desired objectives.

Introduction & Overview

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here has been significant recent attention to the possibility of including demand charges in electricity rates charged to residents and small businesses. Electric utilities historically have served these small customers under a two-part rate structure comprised of a fixed monthly customer charge that recovers the cost of connecting to the grid and an energy charge (or charges) that recover all other costs. Much of this attention to the issue of demand charges for small customers has been initiated by electric utilities reacting to actual or potential reductions in sales, revenue and cost recovery. 

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Bill Effects of Demand-Based Rates on Commonwealth Edison Residential Customers

Bill Effects of Demand-Based Rates on Commonwealth Edison Residential Customers

 By Jeff Zethmayr

A frequent rationale for demand-based rates is the utility assertion that they should reflect customer cost-causation. More analysis is needed to test this assertion, incorporating data from utilities’ cost of service studies and comparing it to individual usage and bill effects.

 

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he tension between revenue security, fairness of cost allocation, and consumers’ control over their bills has long dominated the utility rate design policy discussion. Nationwide, many utilities have pushed for straight-fixed-variable (“SFV”) rate designs,  which increase the fixed portion of customers’ delivery bills. Consumer, environmental, and low-income advocates have resisted this push because higher fixed charges increase bills for lower-use customers, while lower SFV volumetric charges reduce incentives for energy efficiency measures.

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Curating the Future of Rate Design for Residential Customers

Curating the Future of Rate Design for Residential Customers

By Ahmad Faruqui and Wade Davis, with Josephine Duh and Cody Warner

It is time to make three-part rates the standard offering for all residential customers. Doing so will encourage better use of grid capacity, minimize cross-subsidies between customers, and foster adoption of advanced technologies. It’s a win-win-win opportunity. 
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n 2014, 87 percent of all electric utility customers in the U.S. were residential customers, some 129 million out of 147 million. While the typical residential customer uses a lot less energy than the typical non-residential customer, in the aggregate residential customers account for almost four-tenths of the electricity that is consumed in the country.  And since residential customers have lower load factors than non-residential customers, residential customers’ share of peak load is probably higher than four-tenths. Considering emerging trends and advancing technologies, it is more important than ever to price electricity correctly for residential customers.

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Solar Can Wreck the Economics of Competitive Power Markets

Solar Can Wreck the Economics of Competitive Power Markets

By Alex Gilbert

This paper assesses powerful effects of solar technology on electricity service, particularly in organized power markets. It projects solar’s disruptive effects on wholesale markets, on other resources in those markets, and even on other solar resources. Its provocative findings are noted below.

Power Markets Are Due for Massive Changes

 

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uring the last 20 years, the majority of the U.S. electricity system has shifted from the traditional vertically integrated model to competitive wholesale markets. The defining characteristics of these markets, competitive daily energy markets and dispatch, is about to collide with the rapid increase in solar generation, with uncertain consequences.

 

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Electricity Daily

Arkansas groups challenge DOE’s role in Plains and Eastern Clean Line HVDC line

Arkansas groups challenge DOE’s role in Plains and Eastern Clean Line HVDC line

August 19, 2016 -- Two Arkansas landowner groups have asked a federal court to halt the US Department of Energy 's involvement in  Clean Line Energy Partners ' Plains and Eastern Clean Line transmission project, saying DOE failed to obtain required state approvals and exceeded its statutory authority in joining the project. The groups challenged the DOE proposal to use eminent domain, where neces...

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Missouri PSC sees red over Great Plains merger bid; Kansas intervenors pile up

Missouri PSC sees red over Great Plains merger bid; Kansas intervenors pile up

The proposed $12.2 billion acquisition by Great Plains Energy , parent of Kansas City Power & Light , of Topeka-based Westar Energy became more complex Tuesday, as the Kansas Corporation Commission granted requests to intervene by Occidental Chemicals , one of the largest industrial electric consumers in the state; Midwest Energy , a utility that buys power from Westar; and two local chapters of the Intern...

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Blog: California’s cap-and-trade regime can be tweaked and saved. Is it needed?

Blog: California’s cap-and-trade regime can be tweaked and saved. Is it needed?

Prof. Severin Borenstein , who writes with enviable clarity, published a blog post Tuesday on the Energy Collective site that’s must reading for anyone who cares about a market-based approach to cutting carbon. He notes the California legislature is negotiating with Gov. Brown over whether and how to extend the California’s cap-and-trade program to reduce greenhouse gas emissions.  The program is t...

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Should financially-challenged nuclear plants be subsidized? A spirited debate

Should financially-challenged nuclear plants be subsidized? A spirited debate

Want to hear at least two sides of the argument that we should, in the interest of urgently reducing our carbon emissions, subsidize continued operation of existing nuclear power plants? The other side holds that nuclear power has enjoyed more than its share of subsidies and that there are economic options at hand that out-compete nuclear. The website The Conversation has hosted just such a debate...

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SolarCity‘s 2ndQ report reflects 2016’s wild ride, showing some ground gained

SolarCity‘s 2ndQ report reflects 2016’s wild ride, showing some ground gained

2016 has been a wild ride for SolarCity. The company’s independent board members approved Tesla's bid to acquire SCTY in an all-stock transition worth $2.6 billion. Last week's earnings call had some good news for the leading residential solar installer, as it beat analysts’ forecasts on revenue, earnings and installations, but still suffered a net loss of $250 million. In response to the latter—t...

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Mass. high court blocks plan to have electric customers fund new gas pipelines

Mass. high court blocks plan to have electric customers fund new gas pipelines

August 18, 2016 -- Massachusetts’ highest court has struck down an effort by electric utilities to charge their customers for costs of new natural gas pipelines, hampering their efforts to assure adequate supplies of the fuel on which Massachusetts and New England are increasingly dependent, and avert shortages. The Massachusetts Department of Public Utilities may not approve contracts that req...

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Editorials

Renewables or nuclear: What’s the vision?

Renewables or nuclear: What’s the vision?

The public policy community is solidly on board with the proposition that we must stop emitting greenhouse gases into the atmosphere. But it’s not enough that we simply reduce the level of emissions. Rather, as soon as practicable, we must curb fossil fuel emissions in every sector of our economy—in the transportation (now the chief emitter) and buildings sectors, as well as the energy sector.

That...

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Replacing Diablo Canyon with safer, more flexible options is a better choice

Replacing Diablo Canyon with safer, more flexible options is a better choice

Michael Shellenberger , an acclaimed environmentalist and co-founder of the pro-nuclear Breakthrough Institute , is determined to make Californians and the world see the error in a joint proposal’s plan to close the 2,200 Diablo Canyon nuclear plant. Shellenberger and his allies go so far as to claim that nuclear energy is “clean energy.”

There is a broad global consensus climate change must be checked ...

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Will distributed resources end the distribution natural monopoly? If so, then what?

Will distributed resources end the distribution natural monopoly? If so, then what?

The electricity industry seems to be plagued by a multitude of “interesting problems.” They’re problems that can’t—or at least shouldn’t –be ignored. While after nearly 40 years we are still grappling with the consequences of the energy supply sector of the industry becoming competitive, with passage of the Public Utility Regulatory Policies Act (as evidenced by several excellent panels in FERC’s t...

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What decided Diablo Canyon’s fate?

What decided Diablo Canyon’s fate?

As an outsider, weighing the things known and not known behind PG&E’s decision to retire its two-unit, 2,240-MW Diablo Canyon nuclear plant, shocking as it was, in the end it wasn’t surprising.

Among the things that are both known—and unknown—about the remaining years for California’s last surviving nuclear plant are these:

Relicensing . As the project’s existing licenses expire in November 2024 ...

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Rethinking the climate change challenge from a deeper, wider position

Rethinking the climate change challenge from a deeper, wider position

Cambridge University engineering professor M.J. Kelly has written a paper that challenges much of today’s accepted wisdom about the climate change threat.

It addresses that problem but also steps back from it to look into the abyss posed by a related problem: the need to supply a growing, changing world with energy and how best to do it—thoughtfully and conscientiously.

Reading the paper was unsettlin...

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America’s long fever dream of boundless nuclear power: What’s a country to do?

America’s long fever dream of boundless nuclear power: What’s a country to do?

America’s relationship with civilian nuclear power is curious: it’s like the story of the aging playboy who can’t let go of his alluring but high-maintenance showgirl. The two love each other, dreaming of what might have been and what might be. They can’t quite make the relationship work, but can’t let go either.

I don’t suggest this perhaps inapt metaphor idly, because I have great respect for tho...

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