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Electricity Regulation and Markets: Federal and State Roles

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​In a briefing for the National Caucus of Environmental Legislators, Dr. Carl Linvill provided an overview of electric transmission regulation and markets. Jeff Ackermann discussed unique considerations for Western states.

Harness Disruption or Be Disrupted

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​During a panel at the National Governors Association’s annual Governors’ Advisors’ Energy Policy Institute, David Littell presented on the importance of distribution and transmission planning in an era of disruptive technology.​

Regional Operational Centres: A review of the Commission’s proposal and recommendations for improvement

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Close coordination of Europe’s power networks on a regional basis is important, as illustrated vividly in November 2006, when Europe came close to experiencing a widespread blackout. Since that time, Transmission System Operators (TSOs) have voluntarily worked together to increase regional coordination. In its ‘Clean Energy for All Europeans’ legislative package, the Commission has proposed to further increase regional cooperation within the Internal Electricity Market. Specifically, the proposed Electricity Regulation will create Regional Operational Centres (ROCs) that build on the framework established by Regional Security Coordinators through EU Network Codes.

The Commission’s proposal to create ROCs is a step forward in establishing an institutional framework for regional system operation and optimal use of interconnectors, and will also help to increase economic welfare at both the regional and European level. RAP and Client Earth recommend the following improvements to the Commission’s proposal:

  1. ROCs should be given a bigger role in risk-preparedness in recognition of the fact that ROCs will, in time, develop the regional knowledge, necessary expertise, and analytical capability that will allow them to identify regional crisis scenarios more effectively than ENTSO-E or individual Member States. We therefore suggest that the ROCs should be responsible for identifying crisis scenarios.
  2. The Commission’s proposal should anticipate that, ultimately, ROCs should oversee the real-time operation of Europe’s regional transmission networks in addition to providing near-real-time analysis and guidance. While both the TSOs’ regional security coordination initiatives, later formalised as Regional Security Coordinators, and the Commission’s ROC proposal recognise the need for near-real-time transmission planning activities to be carried out on a regional basis in the interests of increased market efficiency, neither addresses the eventual need to take a similar approach to real-time activities.
  3. A strong governance structure is imperative for the ROCs to function as intended. Suggested additions to the governance framework include ensuring independence, establishing a clearer mission for the ROCs, and empowering the Agency for the Cooperation of Energy Regulators to exercise stronger oversight of the ROCs. These steps should ensure that ROCs operate freely from any national bias that would be in conflict with the interests of all consumers in the region. We also recommend including a legal mechanism for promoting transparency, public scrutiny, and meaningful participation of stakeholders.

These recommendations will allow the Commission’s proposed Electricity Regulation to fully optimize the transmission system in the interests of market efficiency and ensure a least-cost transition to a decarbonized power system.

Regulatory Approaches to Grid Resiliency and Security

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Ensuring a stronger grid that is capable of withstanding a catastrophic event, or alternatively a grid for which outage durations can be minimized in such an event, involves several steps. First is prevention: identifying the grid’s weaknesses and how to mitigate them. Second is recovery: steps to ensure quick restoration of service after a major event. Third is survivability: measures taken to encourage and safely enable customers, neighborhoods, campuses, and communities to physically isolate themselves from a disabled wider grid system during an outage. All of these options require regulatory leadership in terms of authorizing inquiries into grid resiliency, approving cost recovery mechanisms, and designing rates that encourage innovative solutions. This paper offers options and recommendations for identification of grid weaknesses and solutions; investments in software and cloud-based information data systems; investments in hardware and assets to strengthen reliability; and rate designs that complement these policies.

New Hampshire Grid Modernization

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David Littell reported on the recommendations of the NH Grid Modernization Customer/Utility Data Management Task Force during a working group meeting in Concord, NH.

Regulatory Tactics for Electric Peak Management

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At a workshop for the Arizona State government, Richard Sedano provided an in-depth look at how electric peak can be managed using a variety of regulatory tools to oversee costs and resources and to ensure success with other social objectives.