If you were looking forward to watching the PSC evidentiary hearing via the Commission's webcast like I mentioned on the radio last week, change of plans.
There won't be an evidentiary hearing.
As I also mentioned, there will be a rate increase. It's only a matter of how much. The Staff of the Public Service Commission, your Consumer Advocate, Wal-Mart and the Energy Users Group have reached a settlement with FirstEnergy "in principle." The exact amount of our rate increase is still under wraps.
If FirstEnergy is settling, it probably means us ratepayers are gong to take it in the... wallet.
The Courier & Press began investigating this issue after receiving a call from a local business owner on Friday concerned that her bill had tripled without warning.
Vectren initially said that more bills than usual were estimated over the summer because the company switched meter reading contractors, and it was changing the readers’ routes.
“Without getting into specifics, there are challenges that happen with any contractor transitions,” Hedde said Tuesday morning. She added that the anonymous caller’s high bill was likely atypical.
“I don’t want to give the impression that that is normal,” Hedde said. “She is experiencing something hopefully that is an anomaly.”
But response to a Courier & Press’ Facebook post showed the issue was widespread. Hundreds of people replied to the post with stories of bills that were several times what they expected.
The Courier & Press characterizes the problem as affecting "thousands" of customers.
The Indiana Regulatory Commission doesn't seem to see this as a problem.
But mistake or no, customers whose bills were underestimated must pay up, said the Indiana Utility Regulatory Commission.
“They are responsible for it,” said Natalie Derrickson, a spokeswoman for the Indiana Utility Regulatory Commission. “At this point, if a customer feels like their bill was estimated and they have larger bills than they were expecting, their first step should be to contact Vectren. If the customer feels like the issue is not resolved, they should contact us.”
This utility failure probably couldn't come at a worse time of year for struggling families. No Christmas this year, kiddies, Mommy & Daddy have to pay the electric bill instead!
Seems to me that if the problem was caused by a contractor that did not live up to its legal obligations, then Vectren and/or the affected customers have a clear course of action. Unless... maybe Vectren isn't being honest about this and is scapegoating a contractor they no longer do business with?
You'd think the Indiana Regulatory Commission would at least want to get to the bottom of this.
At any rate, the Courier & Press wants to know what the people think -- Should utilities be permitted to estimate customers’ bills for periods longer than one month?
As we found out here in West Virginia when thousands of customers were abused in exactly the same fashion by FirstEnergy, meters should be read every month.
Just when we were ready to make Kevin Gates an official member of the Sodom on the Potomac Super Hero Club, he's folded his tent and disappeared.
Pretty disappointing, after the terrific fight Kevin and his brother Rich have been putting up, claiming to have been wrongly accused and harassed by FERC for years.
Powhatan Energy Fund has decided to take down its website at www.ferclitigation.com. And, while the site is down, Powhatan will be declining all new requests to speak with the media and requests to present at conferences.
about the security risks posed by our reliance on centralized generation and long-distance transmission by Rebecca Smith at the Wall Street Journal. Rebecca just hasn't been the same since she had a little talk with former FERC Commissioner Jon Wellinghoff about the attack on a California substation back in 2013. Wellinghoff has been doing the Paul Revere about the stunning insecurity of our electrical grid since the incident, and it looks like he's now recruited Rebecca to carry the torch.
Fear that utility companies remain vulnerable to hackers, terrorists and natural disasters has the Pentagon pushing construction of independent power grids at military bases across the U.S. ...
We should all be pushing for construction of independent power grids in our own neighborhoods, instead of more centralized generation (whether renewable or otherwise) and long-distance transmission. Gigantic, interconnected infrastructure is incredibly vulnerable simply because so many people rely on it. While independent power grids and local generation could also be subject to the same mischief that makes an interconnected grid vulnerable, if there are enough micro grids operating independently, there would simply be too many of them to effect large scale blackouts, whether purposefully or accidentally.
Increasingly, the Pentagon wants power from its own sources.
“The endgame is to be able to survive if the grid goes down,” said Paul Orzeske, who recently retired as president of Honeywell Building Solutions, the company helping build Fort Bragg’s microgrid.
For years, experts have recommended the U.S. military seek independence from commercial utilities. “Our grid is old and it’s reliant on technology that’s outdated,” said Michael Wu, energy program director for the Truman National Security Project & Center for National Policy, a Washington think tank.
But regional grid planners. regulators, and utilities all insist that we need more -- more generators and more transmission -- in order to make the system "reliable."
Someone's lying here.
Is a small, independent, diverse system more reliable?
Or is a large, interconnected and redundant system more reliable?
Can't have it both ways. Personally, my vote is with the military when it comes to reliability and safety.
I don't know about you, but I've had my fill of election season annoyances. The commercials, phone calls, mailings, and facebook accusations can stop now.... I've already voted.
I hope you do a little research on the candidates before you vote! Campaign finance reports are a good place to start:
Ohio-based FirstEnergy has been a busy little bee supporting certain candidates for state offices. But some candidates didn't take FirstEnergy's dirty money.
In the 16th District Senate race, Senator John Unger hasn't received any FirstEnergy money. However, his opponent, Larry Faircloth took $1000 from FirstEnergy's PAC. Faircloth also took money from Roach Oil (that benefits from high eastern panhandle gas prices). Campaign finance aside, Faircloth is also responsible for the 35% hike in Berkeley Co. sewer fees. Developer Faircloth filed a lawsuit seeking to invalidate developer impact fees for increases to sewage capacity. Due to loss of the impact fees, the sewer district had to file for an 11% rate increase. Larry Faircloth's personal financial interests seem to trump the interests of the citizens he wants to represent. I have reservations about whose interests Faircloth would serve if elected.
In the 67th District Delegate race, Delegate Stephen Skinner's campaign finance reports are FirstEnergy-free. That's not too surprising, since Delegate Skinner has taken an active role in criticizing FirstEnergy's bungling of estimated bills and recent rate increase request. His opponent, Pat Rucker, lists a $500 contribution from FirstEnergy PAC on her campaign finance report. Which candidate do you think would do more to protect you from FirstEnergy's money-grubbing, shoddy business practices? I didn't see Pat Rucker at the recent FirstEnergy rate increase hearings. She must support the company's request for a 17.2% hike in your electric bill.
In the 66th District Delegate race, Mountain Party candidate Danny Lutz has received no funding from FirstEnergy. However, his opponent, Frontier's representative Paul Espinosa seems to be pretty cozy with the FirstEnergy bigwigs in Akron. In addition to the obligatory $1,000 donation from the FirstEnergy PAC, FirstEnergy's boy also got another $1,000 donation from FirstEnergy CEO Tony Alexander. You'd think the Alexander family would have better things to do with their money than to toss it away on a West Virginia Delegate's race?
A vote for Unger, Skinner or Lutz is a vote AGAINST FirstEnergy! Don't forget to make yours count!
Section 1221 of the Energy Policy Act of 2005
directed the U.S. Department of Energy to complete a transmission "congestion study" every three years. The congestion study is supposed to lead to designation of "National Interest Electric Transmission Corridors" (NIETCs). A transmission project sited in a NIETC is subject to "backstop" permitting authority by FERC if a state fails to act on a permit application within one year, or lacks authority to issue a permit. It's a three-step process to federal electric transmission siting and permitting that should NEVER be allowed to happen.
DOE's initial attempts ran into a buzzsaw of opposition that ended up in two separate federal court decisions that effectively castrated Sec. 1221. But, hey, that Sec. 1221 mandate still exists, so DOE must still go through the motions.
And that's what they did, albeit 2 years past the 2012 due date. The DOE secretly opened their "draft" congestion study up for public comment (never mind the contradiction of a secret opportunity for public comment, we won't dwell there).
The public commented -- nearly 100 comments panning the report and warning against designation of any new NIETCs were submitted by interested "stakeholders."
But, a handful of industry players also found out about the secret study and submitted comments. So, let's take a look!
Utilities SDG&E, Southern Co., Duke, and Florida Municipal Power Agency filed self-serving comments about their own service territory, either pointing to "congestion" where they want to build lines, or cheering a DOE finding that there was no congestion in their region.
Regional transmission organizations Southwest Power Pool, NY-ISO and ISO-NE also filed comments. The general gist of their comments was that RTOs already have robust transmission planning processes and power markets that make DOE's congestion study a frivolous and unnecessary duplication of effort. And then they resorted to redline editorial corrections. I did get a kick out of ISO-NE's correction to add offshore wind to DOE's narrow resource focus:
The best onshore renewable wind resources (i.e., those with the highest potential
capacity factors) tend to be located far from load and sometimes in areas with less
transmission than desired for effective resource development. The best offshore renewable wind resources, however, are often located close to load centers, as is the case with New England.
Edison Electric Institute (EEI), the investor-owned utility lobbyist organization, told DOE to forget all about that NIETC stuff and to spend its time finding ways to streamline transmission permits on federal land. Yes... that's just what's missing from America's National Parks -- more and bigger transmission lines! Just think how sweet the Grand Canyon would look with a couple of huge transmission lines spanning it at its widest points! And wouldn't Old Faithful be much, much cooler if it erupted into an overhead transmission line and created even more steam and maybe an electric arc or two? Yeehaw.... idiots!
WIRES, the transmission developer's lobbying group just seems to want to get its paws on a whole bunch of congestion data. If DOE can't find or easily gather this data for WIRES's use in proposing competitive transmission projects, then WIRES thinks the DOE should pursue new legislation to obtain it, no matter how much providing this information burdens other utilities.
The American Wind Energy Association and Next Era Energy want DOE to allow transmission developers to do their own "congestion studies" and apply to DOE for designation of narrow "corridors" just wide enough for projects they want to build. That's just ridiculous!! A version of this bastardization of Sec. 1221 was proposed several years ago
, and was promptly disposed of by Congress. Not a good idea! DOE doing this study and designating corridors is bad enough without throwing wide the door to self-serving "studies" and corridor requests inspired, not by need for new transmission, but by corporate greed.
And speaking of corporate greed, I've saved the best for last. As expected, our heroes at Clean Line Energy just couldn't be left out of a process where it may benefit by using the government as its own personal land agent to take what it isn't granted by individual states.
Clean Line makes a bunch of obsequious comments that really don't do much but promote its own projects and display their self-centered stupidity.
Clean Line made much of this diagram:
All of Clean Line’s projects originate in a Type 1 Conditional Constraint Area, identified by DOE in the 2009 National Electric Transmission Congestion Study (“2009 Congestion Study”) and illustrated in Figure 2. The 2009 Congestion Study defined a Type I Conditional Constraint Area as, “an area where large quantities of renewable resources could be developed economically using existing technology with known cost and performance characteristics – if transmission were available to serve them.” The 2009 Congestion Study also noted, “Construction of major new transmission projects would enable development of thousands of MW of new renewable generation” within these areas.
Hey, guess what, Clean Line? The 2009 Congestion Study is no longer in effect and, in fact, was one of the straws that broke the DOE's back in Federal court. Issuing a new report filled with old data is probably not a good plan. And, hey, look at Figure 2 -- wind in those Type II Conditional Constraint Areas is conveniently located near all the big load centers that YOU are trying to reach with YOUR Type I projects. Thanks for bringing up and illustrating just how worthless your projects really are!
Clean Line tells a HUGE lie:
Clean Line has engaged with thousands of local stakeholders in eleven states, where its five projects are actively under development.
Sort of sounds like Clean Line is having a great time making new friends, right? In fact, Clean Line has inspired record opposition in every state it's entered, where "thousands of stakeholders" have spoken out against the project and participated in opposing Clean Line applications in the state permitting process. Landowners routinely complain that they were not engaged by Clean Line, but found out about the project from neighbors and friends. Clean Line's "public participation" process has been one gigantic failure. Failure to properly consult with all stakeholders was a problem in DOE's last NIETC designation, and it's also the reason Clean Line is facing record opposition. Ignoring landowner stakeholders does NOT nullify them, it only enrages and engages them!
Clean Line rumbles on about demand for its projects from unbuilt wind generators. Note, Clean Line doesn't mention any interest from load serving entities, most likely because there isn't any! And Clean Line's price for "all in" delivery includes the production tax credit that expired LAST year.
Clean Line even elects itself to speak as a champion for you struggling farmers!
These are real projects, many of which have land leased for wind turbines from
farmers seeking new sources of income, as drought has made traditional farming livelihoods uncertain. Wind power represents new hope for drought-resistant income and economic development in regions of the country otherwise struggling with diminishing populations.
Looks like you all should give up farming and sit on the porch, watching the turbines turn and counting your cash. Where's our food supposed to come from? Make sure Clean Line gets at the end of any buffet line...
The next step is for DOE to "review and consider" comments on the draft study, and to prepare and release a final version of the study. Watch this website, because it's likely to be another secret public process from our taxpayer-funded U.S. DOE!
Clean Line Energy Partners thought their idea for a series of gigantic HVDC overhead transmission lines to transport wind power across the U.S. was cutting edge back in 2009. Now it's just more of the same old, same old centralized generation/long-distance transmission network that is fast being overtaken by locally-sourced renewables and distributed generation.
It should come as no surprise that Clean Line investor and executive Jayshree Desai tried to downplay the viability of distributed generation at the recent American Wind Energy Association Finance Conference in New York, while singing the praises of industrial-scale wind farms and thousands of miles of new high-voltage transmission. It's where her bread is buttered, after all.
Large-scale wind farms paired with new transmission lines -- not distributed solar generation -- is the cheapest way for the US to decarbonise its electricity system, claims an executive at Clean Line Energy Partners.
Jayshree Desai, executive vice president at Clean Line Energy Partners, also believes that over the next few years the cost curve for wind will bend downward more rapidly than for PV, after solar’s spectacular price decline in recent years. Large-scale wind farms paired with new transmission lines -- not distributed solar generation -- is the cheapest way for the US to decarbonise its electricity system, claims an executive at Clean Line Energy Partners.
But Clean Line won't "decarbonize" anything because wind is a variable resource that cannot be depended on as baseload power. Due to its variability, any power injected by a "clean" line must be backed up with baseload fossil fuel generators that must constantly ramp up and down to equalize variable generation with load.
Desai thinks her Plains & Eastern Clean Line will be under construction in 2016 (if only the U.S. Department of Energy steps up to hammer resistant landowners with federal eminent domain). I don't think so. Vocal, forthright opposition to the line in Arkansas and Oklahoma is just now taking off, after many years of Clean Line keeping its plans secret from affected landowners, and it's going to be a rocky road ahead.
When the question was posed at the conference whether we need new, big transmission projects in the face of distributed generation's meteoric rise to prominence, Desai was quick to criticize distributed generation and tout her projects at prices much lower than the company has admitted in other venues. Clean Line keeps lowering the "expected" price of its product at the same time it is experiencing costly delays and setbacks in the permitting arena. This doesn't compute. The cost of building these lines just keeps getting more expensive by the day, and the lines themselves are Clean Line's only product. Clean Line's estimate of the price of wind generation that it will not own or construct keeps falling as the cost of building the line rises. Desai claims as yet unbuilt wind will be priced at $.02 kWh, however this price includes the federal production tax credit, which expired last year and has yet to be renewed. The production tax credit is a taxpayer financed subsidy for big wind of 2.7 cents per kWh, therefore Desai's real generation price without the expired credit is 4.7 cents per kWh. She believes that Clean Line can ship that wind to several midwest injection points for 2 cents per kWh. That's a total of 6.7 cents/kWh delivered. And that's delivered to a midwest substation -- if you're not there, you're going to need to pay additional transmission costs to get it to your load.
Someone needs to check her math -- just a few years ago, Clean Line's capacity cost estimate was 2.5 cents per kWh. How did it get cheaper when the company has added several years of permitting snafus, thousands of resistant landowners who have dug in their heels for a contentious eminent domain battle, and a whole bunch of promises to use certain "local" vendors to build its projects in certain states, instead of putting labor and supplies out for bid to get a better price? It doesn't add up.
Desai thinks distributed solar isn't viable:
“I’m a supporter – I have nothing against [distributed generation]”, she said, speaking this week at the AWEA Finance conference in New York. “But the math is just not right.”
Desai argues that the true cost of integrating distributed solar into the grid is not being accounted for – a line increasingly employed by electrical utilities keen to curb the growth of rooftop solar.
“It’s heavily subsidised, not only at the federal level, but at the transmission and distribution [level too],” she says. Given those subsidies, “of course DG looks so good”.
Well, isn't that the pot calling the kettle black by Miss Production Tax Credit Subsidy?
When is the true cost of integrating midwest utility-scale wind gong to be accounted for? What is the true cost to each individual landowner crossed? How many farm businesses will face increased costs and lower yields once Clean Line has tossed them a one-time market value land payment to "compensate" them for their losses in perpetuity? How many homes will lose value due to proximity to a "clean" line? How much future land use potential is foregone once a "clean" line is in place?
The argument about grid fees for distributed solar does need to be solved, though. And it's not going to be solved if both sides continue to dig in their heels. DG fans who insist there is no value for them in being connected to the distribution system should try disconnecting for a day or two. The value of being connected to sell excess and purchase power when needed would quickly become obvious. Those who claim they should be charged nothing for using the distribution system as their own personal battery back-up need to get over themselves and get this done. They're only hurting themselves the longer this debate goes on.
But not everyone at the conference agreed with Desai. In fact, her opinion pretty much got shredded.
Kris Zadlo – a multi-decade veteran of the transmission sector, and currently vice president at Invenergy – believes distributed generation will “take a big bite” out of the electricity transmission sector in the years ahead.
Zadlo says that being able to cut the transmission portion out of the picture entirely is a big advantage for distributed generation. “And it’s not only about cost, but also about control,” he says.
“We can’t underestimate that what DG allows people is their own peace of mind, control of their own destiny. What sort of premium is that worth to the customer?”
Indeed! Let's cut transmission out of the picture.
I wonder what effect this debate had on Desai's efforts to find new investors for her Clean Line projects? At the ICC evidentiary hearings in Illinois last year, it was revealed that Clean Line would be pretty much out of money by now. Who's willing to dump more money down the Clean Line rat hole? The company is making little progress, in fact, they seem to be regressing on a permitting level, with prospects of future eminent domain authority in several states getting dimmer by the day.
I guess we can't blame Jayshree for letting her desperation show.
- The highway system was built using public money, for the benefit of the public. The highways are operated by governments, and tolls for use are poured back into the highway system for the benefit of the public. However, the electric transmission system is built using private money, for the benefit of investors. The grid is operated by utilities, and tolls for use go into the utility's pockets for the benefit of stockholders. Highways are not-for-profit enterprises. Electric transmission is a for-profit enterprise.
- The highway system "binds the massive country together into a single, integrated network" so that we may travel anywhere. However, it is inefficient, costly and wasteful to "bind the massive country together into a single, integrated electric market." Electricity is unlike other commodities because it must be used the instant it is made. It cannot be stored for later sale or use. Transporting it long distances is like transporting water through a leaky pipe -- much is lost along the way, simply wasted. The longer the distance, the more electricity wasted. While it may be useful to travel long distances via highways, it is not useful to transmit electricity long distances. The most cost effective, efficient, safe and reliable electrical system is one where electricity is generated at or close to its point of use.
- People were willing to make way for highways on their land because they could use these highways, and the government wasn't making a profit by operating the highway. How come the media never compares transmission lines to highways with no on or off ramps for local use? People are NOT willing to make way for long-distance electric transmission lines because they may not directly use the transmission line, and the transmission line is a profit center for its owner. If a profit is to be made, the landowner should be paid appropriately in line with the continued profits, not tossed a one-time "market value" pittance for the use of his land in perpetuity.
- Eminent domain was used to build the interstate highway system because it was for "public use." Eminent domain was also used to build the transmission and distribution system that electrified our country because it was for "public use." The key here is that both were for "public use." But now transmission is proposed for other reasons such as economics, public policy, or simply as a way to make money shipping electricity to new markets. Is this really a "public use," or is it a slide down a slippery slope? Where does "public use" stop and "private profit" begin?
Renewables are ready for harvest near population centers. We don't need a series of vulnerable "toll roads" to transport them coast-to-coast. This is simply the utility industry's latest attempt to dig in a toe-hold that will keep you captive for many years to come.
Just say "no" to electric "highways" and uninspired journalism.
I got an email yesterday from DOE's Office of Electricity Delivery and Energy Reliability (OE) with a link to DOE's new Section 1222 FAQ
. FAQ stands for "frequently asked questions." This is supposed to be a list of the questions about Section 1222 that you all have sent to Energy Secretary Ernest Moniz lately. Instead of actually answering your specific questions though, Ernie's staffers first sent out a form letter response
The form letter encourages the hoi polloi and affected landowners to make comment on the Environmental Impact Statement (EIS). It insinuates that the public's only avenue for participation in a process that could ultimately condemn and take their property via eminent domain is through the EIS. This is preposterous.
The EIS simply decides where to put the transmission line to cause the least environmental damage. It does not prevent environmental (or historic, cultural, and socioeconomic) damage. Damage is allowed, as long as the company perpetrating it makes payment for "mitigation." In other words your land and environment is for sale to the highest bidder. Confining your comments to the EIS is a losing, feel-good way to contain you and stop you from causing a ruckus until after the decision is made. By that time, it will be too late.
During any state jurisdictional transmission permitting process, affected landowners may intervene and participate in the hearing process, providing evidence and pleading their case to the Public Service Commission who will ultimately make the decision on permitting and siting. The DOE's Section 1222 "program" doesn't provide you landowner stakeholders with any due process to participate in the decision making.
Instead, companies standing to profit from Sec. 1222 were having their own little private party with DOE, urging DOE to hurry up and sign up to be Clean Line's land agent.
Due process? No. Landowners were being excluded. So, the landowners crashed the party. And the best DOE could offer them is this unhelpful FAQ?
A couple of affected landowners who looked at the FAQ last night has more questions than answers. Everything from "what is OE?" to "what ever happened to Clean Line's Grain Belt Express Sec. 1222 application?"
What are the statutory requirements for a project under Sec. 1222? DOE skips over this while patting you on the head and telling you not to worry about all that complicated stuff:
The DOE will conduct a thorough review that includes making all required statutory findings as well as consideration of the proposed project’s environmental impacts, the project’s technical and economic feasibility, and whether the project is in the public interest.
What are the decisional guidelines? Or is DOE just making this crap up as they go?
What is "other due diligence?"
DOE will decide whether to participate in the proposed project, a decision which would include route selection, once all environmental reviews and other due diligence have been completed. The earliest a decision could be made is at least 30 days after issuing the Final EIS, which is not expected before 2015.
How can you participate in the decision making process outside the EIS? How should landowner stakeholders be consulted in this process? Where's the due process?
Issues Not Addressed in the EIS: Before DOE conducts its review of all of the factors discussed above, the applicant will be required to submit further information and update its original application. Once DOE receives the updated information, and deems the application complete, it will provide notice that the application is available for public review through a notice in the Federal Register and an announcement on the OE website. Publication of this notice in the Federal Register will begin a 45-day public comment period. The notice will describe how to comment on the application for the proposed project. All comments submitted during the comment period will be considered in the DOE’s ultimate decision as to whether to participate in the proposed project under the Section 1222 program.
Oh, now I know they're just making the rules up at they go. Updated application? Why? So that Clean Line can address any shortcomings and make its application a little more legally bulletproof? A "do-over," as we used to call it on the playground. Where is this 45-day comment period written into the statute (hint: it's not -- they just made it up!)
So, what to do? Keep asking questions! Submit your additional questions here and encourage Angela to flesh out her confusing FAQ. And be sure to ask her... "Where's the due process for affected landowners?"
"It's evident that the mandatory capacity markets are not delivering benefits to electricity customers. They are not even markets," said APPA President and CEO Sue Kelly. "Billions of dollars are flowing from the pockets of bill-paying customers to generators and capacity providers, and our study shows that the vast majority of these dollars are being spent to prop up a market structure that does not work. At some point, we just have to stop the music."
APPA has been issuing reports for years attacking the capacity markets in PJM, and other east coast RTOs.
The capacity market makes payments to generators to ensure their availability to meet demand. It's supposed to supplement the earnings of generators to act as an incentive to build new generation to supply a robustly competitive market that saves consumers money.
Capacity payments are a part of your electric bill, albeit a small part, but collectively they cost consumers millions.
Regional transmission organizations cannot order new generation to be built in order to supply needed capacity. Instead, they created this screwball market that is supposed to provide financial incentive for new generation to develop where electricity prices are high. It doesn't work, says APPA.
The APPA study underscores a central flaw in the mandatory capacity markets -- they do not support the stable long-term financial arrangements required to build new power plants. As the electricity industry faces new challenges from environmental regulations, baseload retirements, and an increased reliance on natural gas, it is crucial that the RTOs and the Federal Energy Regulatory Commission (FERC) revisit the mandatory capacity markets paradigm, APPA says.
So, are capacity markets just a consumer funded give-away to for-profit generators?
Look at what happened when an oversupply of cheap gas generation flooded PJM's market. Capacity prices tumbled and a lot of old, inefficient generators were retired because they could no longer compete. Some plants that couldn't compete were "sold" into the generator's regulated affiliate distribution companies, such as FirstEnergy's Harrison or AEP's Mitchell, where ratepayers will pick up the tab for the plant's operating costs and become speculators in PJM's capacity market. In the Harrison case, the WV PSC conditioned its approval on the market price of Harrison's excess capacity being high enough to cover the merger acquisition premium being charged to customers in West Virginia.
PJM pretends its capacity market encourages development of sufficient generation but hedges that bet by ordering new transmission lines to supply electricity to constrained or expensive load pockets long before local generation even has a chance to develop.
So, what's APPA's solution?
APPA encourages approaches to resource development that incorporate long-term planning, bilateral contracting, utility ownership, and demand-side approaches, and continues to advocate that the FERC mandate a transition from mandatory capacity markets to voluntary residual markets, where states and local public power and cooperative utilities will be able to procure the capacity they need through bilateral contracts -- allowing states and utilities to determine the optimal mix of resources and structure their portfolios to lower costs, maximize reliability and be good environmental stewards.
Not sure how I feel about all that, but it's gotta be better than this