electric distribution sector
DESCRIPTION
Electric Distribution Sector. RPM Explained. Constantly changing rules. Six years after RPM was implemented, we seem to have a major market reform every year. - PowerPoint PPT PresentationTRANSCRIPT
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Electric Distribution Sector
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RPM Explained
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Six years after RPM was implemented, we seem to have a major market reform every year.
These reforms seem to be driven not by the search for an optimum market but by the urging of one party or the other to obtain an advantage.
If the markets are not optimum then, by definition, someone must pay more and that is our customers.
CONSTANTLY CHANGING RULES
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There have been several challenges to the Self-Supply exemption both at FERC and the Circuit Courts in the past two years.
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MINIMUM OFFER PRICE RULE
AEPMountaineer- Sporn
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COST OF NEW ENTRY
Gross CONE vs. Net CONE
Shape of the Variable Resource Requirement Curve
Offer Mitigation Rock Springs
Essential Power
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Import Limit – Currently before the PJM Planning Committee
Requirement that external resources must continue to offer once they clear
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IMPORTS INTO PJM
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FERC ISSUES
SEAMs FTR ATC
Order 1000
Black PumpVatenfallGermany
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Incremental Auctions Price Floors Buying Out
Multi-Year Commitment Allowing resources to get
commitments for multiple years in the BRA
OTHER ISSUES
NCEMC Hamlet Power Plant
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OTHER ISSUES CONTINUED
Demand Response Comparability CSP Issues Day Ahead Markets
Renewables Capacity Values Storage
Ontario Hourly Wind Output Hourly by day August 2009
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Market participants often overreact to changes which may
Cause uncertainty Constrain Competition Impose Additional Costs on
Customers Time is needed to assess
the effects of a change Don’t assume than any
aberration is due to the last change and continually tinker with the market 10
Reaction to Market Changes
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RPM was intended to place a portion of the risk on generators and transmission owners leading to wiser decisions and better capital allocation due to normal market mechanisms.
Proposed changes to PJMs rules constantly seek to eliminate these risks
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RISK
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Many aspects of RPM where developed through hard-fought give-and-take negotiations which required sectors to give on certain issues to protect their critical issues
Some changes now seek to undo that compromise by eliminating negotiated provisions harmful to one group while maintaining the benefits to that group
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UndoingCompromise
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The Stakeholder Process Lends Dignity to What Would Otherwise be a Vulgar Brawl