Federal Energy Research Articles

Their Boot in Our Face No Longer? Administrative Sectionalism and Resistance to Federal Authority in the U.S. South

What explains state agency resistance to actions taken by their federal counterparts? And do sectional tensions make state bureaucratic nonacquiescence particularly likely in the U.S. South We theorize that state resistance to federal administrative policy is more likely among Southern state bureaux due to administrative sectionalism. We argue that state agencies can and do resist federal administrative orders independent of other political constraints. This study is among the first to consider the policy consequences of sectionalism in state bureaucracies. We test our claims by employing a mixed methods approach that analyzes each instance of litigation and intervention by state bureaucrats in opposition to actions and orders by the Federal Energy Regulatory Commission (FERC) from 2010–2017. We find that, all else equal, state agency resistance to federal utility policy is more than four times as likely among Southern utility regulators. This research has important normative implications for administrative politics as it suggests agencies with putatively apolitical policy jurisdiction have political preferences driven by sectional tension.

Local Government Voices in Wholesale Market Issues: Engagement Approaches for Decarbonization

Many U.S. cities and counties are looking to expand clean energy across their communities and achieve their decarbonization goals. However, these cities don’t currently have the information they need to engage on renewables in wholesale energy markets. The lack of local government voices at the wholesale market level is a missed opportunity to remove barriers to renewable energy. This paper presents three main avenues for local governments to get involved in wholesale energy market issues concerning renewable energy: through public statements, at the Federal Energy Regulatory Commission (FERC) level, and at the Regional Transmission Organization (RTO)/Independent System Operator (ISO) level. In many cases, working collaboratively can help local governments overcome barriers like limited capacity, expertise or funding.

Electricity Market of the Future: Potential North American Designs Without Fuel Costs

Electricity markets in the united states and Canada have evolved since their inception in the late 1990s and early 2000s. Not all states and provinces moved toward restructured organized electricity markets, but rather those that have belonged to markets operated by independent system operators (ISOs) and regional transmission organizations, with designs developed through stakeholder processes and approved through state, provincial, or federal agencies, such as the Federal Energy Regulatory Commission (FERC).

Cost factors and statistical evaluation of gas transmission pipeline construction and compressor-station cost in the USA, 2014-2019

The costs of constructing pipelines will vary widely from area to area depending on the length and diameter of the pipeline, population density, the terrain, number and type of crossings, right of way requirements, regulatory conditions, time of construction and the market conditions of equipment and materials. From 2014-2019, 2,063 miles of gas transmission pipeline and 1.9 million horsepower compression regulated by the Federal Energy Regulatory Commission were installed in the USA at a unit cost of $5.72 million per mile and $3,030 per horsepower. In this paper, pipeline construction cost factors are described and gas transmission construction and compressor-station cost statistics and regression models are evaluated. Aggregate metrics are the most stable and reliable statistic and probably the most representative, but for small samples significant restrictions apply. There are large cost deviations in pipeline construction compared to compressor-stations reflecting differences in material and service cost. Route length and line diameter are the only variables needed to develop robust linear models of pipeline construction cost. [Received: January 13, 2020; Accepted: January 13, 2020]

How has external knowledge contributed to lithium-ion batteries for the energy transition?

SummaryInnovation in clean-energy technologies is central toward a net-zero energy system. One key determinant of technological innovation is the integration of external knowledge, i.e., knowledge spillovers. However, extant work does not explain how individual spillovers come about: the mechanisms and enablers of these spillovers. We ask how knowledge from other technologies, sectors, or scientific disciplines is integrated into the innovation process in an important technology for a net-zero future: lithium-ion batteries (LIBs), based on a qualitative case study using extant literature and an elite interview campaign with key inventors in the LIB field and R&D/industry experts. We identify the breakthrough innovations in LIBs, discuss the extent to which breakthrough innovations—plus a few others—have resulted from spillovers, and identify different mechanisms and enablers underlying these spillovers, which can be leveraged by policymakers and R&D managers who are interested in facilitating spillovers in LIBs and other clean-energy technologies.

Building a New Grid Without New Legislation: A Path to Revitalizing Federal Transmission Authorities

New long-distance, high-voltage transmission will be vital if the United States is to integrate the renewable generation needed to decarbonize the electric system at sufficient scale and at reasonable cost. Congress would ideally take action to address the regulatory and economic barriers that currently prevent long-distance high-voltage transmission from being developed at the necessary speed and scale. But until Congress acts, the U.S. Department of Energy and the Federal Energy Regulatory Commission should use the existing authorities they have to advance transmission development. However, it has become conventional wisdom that development of new long-distance high-voltage transmission projects are hopeless without new legislation because opponents can exploit veto points created by state laws and state-level institutions involved in transmission siting decisions. As this article explains, that conventional wisdom is wrong. Congress has already enacted authorities that the federal government can use to counteract siting-related obstacles. To date, those authorities have either not been used or have been used unsuccessfully. In part, this is the result of unfavorable judicial interpretations of those authorities, but those interpretations are not fatal. Given the urgent need for energy system transformation, now is the time for the Department of Energy and the Federal Energy Regulatory Commission to revisit the authorities that they have been given. This article recommends steps for those agencies to take now that would allow them to side-step the obstacles and revitalize the provisions Congress already adopted in order to facilitate transmission system development.

Carbon Pricing in Wholesale Electricity Markets—Options for Fossil‐Fuel Generators

On October 15, 2020, the Federal Energy Regulatory Commission (FERC) announced in a proposed policy statement that it had jurisdiction over carbon pricing mechanisms within the wholesale electricity markets. In that same policy statement, FERC also confirmed it had the authority to approve such rules if brought forward by regional transmission organizations (RTOs) and independent system operators (ISOs).

In Reply to the Letter to the Editor Regarding “Tactile Skill-Based Neurosurgical Simulators Are Effective and Inexpensive”

Coordination costs in a wholesale electricity market are a relevant public policy consideration. The mitigation of coordination costs, all else equal, should increase participation in the marketplace. Since Federal Energy Regulatory Commission (FERC) Order 888 was issued in 1996, the level of trading activity in bulk electricity markets has increased significantly. In 1999, FERC issued Order 2000 to advance the role of regional transmission organizations (RTOs) in the restructured marketplace for wholesale electricity. RTOs have the potential to reduce the coordination costs, while also having the countervailing effect of causing market participants to incur compliance costs. This paper utilizes the diversity of the United States electricity market and a panel data set representing electric utilities for the period 1990–2009 to study the effects that RTOs have had on wholesale electricity exchange. The paper finds that the presence of a transparent wholesale marketplace for electricity has the effect of increasing participation, but this participation is uneven across types of electric utilities. Greater participation is seen for investor-owned and larger utilities. The results have important implications for policy aimed at wholesale markets and the transmission organizations, as the opportunities afforded by transparency may not be uniformly distributed across all market participants.

Exactly how inefficient is the PJM capacity Market?

A common feature of electricity markets is the need to assure an appropriate amount of generating capacity to satisfy demand at any given moment. Some regional markets hold a capacity auction which compensates generation facilities for providing power at some point in the future. These auctions are intended to efficiently price capacity via competitive bidding. However, the Pennsylvania-New Jersey-Maryland Interconnection (PJM) regional transmission organization (RTO) has been in litigation before the Federal Energy Regulatory Commission (FERC) over high prices and a lack of competition in their annual capacity market auctions. A peculiar feature of the PJM RTO is its segmented capacity market, where pivotal suppliers have successfully petitioned to separate from the larger market and create captive Locational Deliverability Areas (LDAs) in which they have a dominant market share. We analyze the competitiveness of the market, the growing capacity margins, as well as the PJM LDA market concentration via Hirschfield-Herfindahl Index (HHI), 4-Firm Concentration Ratio (CR4) and Three-Pivotal-Supplier (TPS) test. We find that many LDAs do not operate competitively and have a pivotal supplier with market power, able to set prices unilaterally. In addition, we find that although reserve margins are inordinately high in the PJM market, they are rising along with prices, an outcome that is only seen in monopolistic markets.

Author Correction: Federal energy R&D: Startups supported by ARPA-E were more innovative than others but an investment gap may remain

Author Correction: Federal energy R&D: Startups supported by ARPA-E were more innovative than others but an investment gap may remain

A Cross-Domain Approach to Analyzing the Short-Run Impact of COVID-19 on the US Electricity Sector.

The novel coronavirus disease (COVID-19) has rapidly spread around the globe in 2020, with the US becoming the epicenter of COVID-19 cases since late March. As the US begins to gradually resume economic activity, it is imperative for policymakers and power system operators to take a scientific approach to understanding and predicting the impact on the electricity sector. Here, we release a first-of-its-kind cross-domain open-access data hub, integrating data from across all existing US wholesale electricity markets with COVID-19 case, weather, mobile device location, and satellite imaging data. Leveraging cross-domain insights from public health and mobility data, we rigorously uncover a significant reduction in electricity consumption that is strongly correlated with the number of COVID-19 cases, degree of social distancing, and level of commercial activity.

Paying for performance: The role of policy in energy storage deployment

Energy storage has long been viewed as a solution to the growing challenge of intermittent electricity supply. However, energy storage deployment remains limited despite falling costs. One reason for this is current market rules that inadequately compensate storage for the value it can provide. A recent policy change in the United States (FERC Order 755) seeks to rectify this by requiring grid operators to compensate providers of frequency regulation services based on their speed and accuracy. This seemingly subtle change has a beneficial effect for fast-acting storage resources. Using a difference-in-differences method, exploiting the fact the Order covers only a subset of U.S. electricity regions, we find the order increases the likelihood projects are built to provide frequency regulation services by about 37%. While cost barriers remain to widespread storage deployment, our results suggest improving market rules to properly reflect the value of storage can overcome many regulatory barriers impeding investment. • In 2011, Federal Energy Regulatory Commission (FERC) introduced Order 755. • Order 755 modified compensation for ancillary services based on speed and accuracy. • This seemingly subtle change had a beneficial effect for fast-acting storage resources. • The Order caused new investments in energy storage that provide frequency regulation. • Lifting market barriers to properly reflect the value of storage can unlock its investment.

Costs of mitigating the environmental impacts of hydropower projects in the United States

Developers are required to mitigate the environmental impacts of hydropower projects in the United States (U.S.) but there is very little accessible information on the associated costs. This study compiles and analyses a dataset of environmental impacts mitigation costs for 182 hydropower projects based on documents obtained from the U.S. Federal Energy Regulatory Commission (FERC). The analysis shows that environmental costs vary wildly across hydropower project classes and mitigation measures, even when normalized by plant capacity. Capital costs per kilowatt are generally higher for relicensed conventional hydropower plants, and lower for new and relicensed pumped storage hydropower plants, relative to other project classes. Smaller plants tend to spend a higher share of total project costs on mitigating environmental impacts than larger plants, and measures related to Aquatic Species, Project Operations, and Recreation have the highest capital cost per kilowatt. These findings mean that environmental costs could become a key decision variable for new hydropower developments in the U.S. due to the small scale of most of the remaining potential and the increasing stringency of environmental requirements. Therefore, technologies to reduce the environmental impacts and costs of hydropower would be important for future project developments.

Integrating Net Benefits Test for Demand Response Into Optimal Power Flow Formulation

In 2011, the Federal Energy Regulatory Commission (FERC) mandated that demand response (DR) procurement pass a net benefits test (NBT) in Order 745 to ensure that the benefits outweighed the costs. Without NBT, DR procurement could result in losses to consumers considering payments for energy and DR services. Current NBT implementations are monthly. However, this neglects to consider two important issues: (a) generator supply curve and demand changes on an hourly basis thus altering the maximum DR quantity that can be dispatched considering NBT; and (b) system-wide implementations don't consider locational marginal prices, line flow limits, and network congestion. Both of these issues can severely distort proper implementation of the NBT. However, FERC allowed the NBT be applied monthly and system-wide in recognition of computational difficulties and lack of methods, and FERC called for research in real-time implementations of NBT. Our work responds to this call. To address these two shortcomings, we propose a new optimal power flow (OPF) formulation in which NBT is implemented into a real-time or near real-time dispatch OPF model and considers the network model in its entirety. Our proposed methodology is applied to a 4-bus test system, a 118-bus modified IEEE system, and a real Ontario system. We demonstrate that the embedding of NBT into real-time OPF formulation yields maximum benefits to remaining consumers when compared to conventional DR formulations.

How to treat energy storage as a transmission asset?

ABSTRACT For energy storage to be part of the transmission solution, storage developers need to work with transmission owners and follow the Regional Transmission Organization (RTO) transmission planning protocols. Federal Energy Regulatory Commission (FERC) Order 841 mostly treats Electric Storage Resource (ESR) as a generation asset. To date, no FERC order lays out a path for treating energy storage as a transmission asset. One of FERC-jurisdictional RTOs – Midcontinent Independent System Operator (MISO) – has sent a “storage as a transmission-only asset” proposal to FERC, which FERC did not reject but did not approve either. This MISO filing begs the question – how to treat energy storage as a transmission project? The industry needs to understand how RTO cost allocation works for new and existing transmission projects. To appreciate cost allocation, stakeholders need to grasp the fundamentals of transmission project categories. Because to put together a business case for storage, modeling is essential. And modeling for reliability and economic projects vary. Getting into the weeds of transmission planning is what it takes to treat storage as a transmission asset.

Assessing the potential of battery storage as a peaking capacity resource in the United States

In 2018, the United States Federal Energy Regulatory Commission established an order requiring all energy market operators in their jurisdiction to allow storage resources to participate as capacity resources. In response to the order, each market operator specified a minimum duration for storage resources to meet or exceed to qualify as peaking capacity. In this work, we assess the impacts of minimum storage duration requirements on energy storage buildout and system operation through 2050 in the United States electricity grid. We also investigate the role that future capital cost reductions play in energy storage deployment in the United States. We use a national-scale capacity expansion model and allow the model to choose from a suite of competing technologies, including battery storage devices of various durations as it builds out a least-cost system. We consider scenarios different minimum storage durations and storage cost projections. We find there is substantial economic potential – greater than 100 GW in some cases – for storage with durations of ten hours or less to provide peaking capacity in the United States. We also find that storage deployment is sensitive to minimum storage duration requirements. Longer requirements reduce the amount of storage deployed. Shorter requirements lead to more deployment, but if they are not adjusted to account for the declining capacity credit of storage, there is greater risk for instances of unserved energy. Our results indicate that the design and implementation of duration requirements can have substantial impacts on storage deployment and broader system reliability.

Privileged Accounts in the Debate over Coal-Fired Power in the United States

This paper builds on Freudenburg’s concept of “privileged accounts” and Hajer’s work on the discourse of environmental policy by analyzing the debate over coal-fired power in the United States before and after the 2016 presidential election. A mixed-methods analysis of qualitative interviews with federal energy policy actors shows that anti-regulation narratives were central to the discourse. Results highlight shifts in pro-coal narratives as members and supporters of the coal industry adapted their discursive strategies to align with political and market transitions: whereas respondents used varied narratives during the pre-election period, the core arguments in the post-election period revolved around a more cohesive set of narratives about legal opposition to regulations and the importance of coal as a source of affordable, reliable energy. Additionally, the themes of climate denial and coal jobs—documented as dominant in previous research—were relatively rare and remained peripheral to the central discourse coalitions identified in this study.

Impacts of storage dispatch on revenue in electricity markets

Abstract As electricity storage deployments grow—due to decreasing costs and increasing grid flexibility requirements—market frameworks governing their dispatch and remuneration are a growing area of interest and importance. For example, the recent Federal Energy Regulatory Commission Order 841 instructs independent system operators to remove barriers of entry for storage assets. This paper reviews electricity market rules to inform an accurate representation of storage bidding behavior in day-ahead (DA) and real-time (RT) electricity markets. Storage dispatch strategies are explored using production cost and price-taker models to address two related research questions: (1) will storage assets receive the highest remuneration by bidding into DA markets, bidding into RT markets, or redispatching bids in both markets and (2) how accurate must forecast information be for a redispatch strategy to improve remuneration? Results show that with sufficient ability to forecast prices, redispatching a DA schedule in the RT takes advantage of both markets: a longer dispatch horizon as well as more volatile prices.

Key to Understanding Pipeline Regulation: Respecting Differences Between Oil and Gas

In the current chaos of dealing with very low oil and natural gas prices, and amid concerns about supply and amounts to be produced and be available at decent market prices, reliable infrastructure to transport these supplies has emerged as a key element. Natural gas and oil pipelines span the nation and have many similarities in their purpose—to transport energy from where it is produced to where it is needed, balancing production markets with consuming and export markets. Both are regulated by the same agency, the Federal Energy Regulatory Commission (FERC). But the similarity ends there.

Why the vision of interregional electric transmission development in FERC Order 1000 is not happening

The Federal Energy Regulatory Commission (FERC) on March 19, 2020 announced a Notice of Proposed Rulemaking (NOPR)iiFERC Docket RM20-10-000. to further investigate how financial incentives might be used to encourage development of high-voltage electric transmission in the United States. An extension of previous efforts in FERC Order 679 issued in 2006, the NOPR-proposed incentives would consist of up to 250 additional basis points of equity return to be allowed on qualifying transmission projects. The NOPR was published in the Federal Register on April 2, and public comments were due back to FERC by July 1.Such incentives, if adopted, would be helpful to address prior FERC business that is yet undone. Issued in 2011, FERC Order 1000, “Transmission and Cost Allocation by Transmission Owning and Operating Utilities” among other things envisioned coordinated planning of interregional transmission developments spanning between individual Regional Transmission Organizations (RTO) and Independent System Operators (ISO), the operators of the FERC-regulated organized wholesale markets. In addition to traditional goals of generator interconnection and service reliability, the purpose of such interregional transmission development was to support public policy goals including renewable energy development, and lower costs for consumers.But little or no such interregional development has happened since Order 1000. Why? The authors have spent the last several years promoting development of one such interregional transmission project. While the effort is ongoing, the on-the-ground experience to-date clearly shows the reasons why interregional development envisioned by FERC Order 1000 is not happening. The authors offer solutions to the issues, including how the new FERC NOPR for transmission incentives can be helpful.