Public Power - September 2008 - (Page 24)

What’s Good About RTOs? ternate, uncongested transmission route to get to the load. Meanwhile, by paying a congestion fee, the load-serving utility is sending the RTO more money than the RTO owes to the generator. The congestion money has to be returned to market participants. The vehicle for doing this is a “financial transmission right”—known to industry junkies as “FTR.” In the MISO market, a power buyer holding FTRs typically does not get 100 percent of the FTRs face value; it is usually about 80 percent of that, Stuart said. “In contrast, in the old days, I had a physical right to transmission,” he said. “Non-firm power would be removed from transmission lines so I received the value of my low-cost resource. Congestion was not a problem from that standpoint.” Now, all generation has equivalent exposure to congestion, obtaining FTRs is not guaranteed and FTRs are pro-rated. “All this creates greater price risk,” Stuart said. Settlement is also complex. WPPI and other wholesale power buyers compile shadow calculations of each buyer’s transactions in the MISO markets to help assure they are not over-paying. As complicated as the RTO markets are, they also provide some benefits and “we’re not going back,” to a non-RTO structure, said Stuart. “Doing so would be problematic.” WPPI, for example, could not deliver its wind power under the old transmission regime because transmission rights then were physical. Now that transmission rights are financial, remote wind generation can be fed into the grid and melded regionwide. WPPI gets the renewable energy into its portfolio, but can take advantage of better wind sites, which are located away from the load centers. Membership in MISO has also enabled WPPI to serve new members. RTOs are also charged by FERC with assuring that generating capacity in the region is adequate to meet electricity needs. Insiders call it “resource adequacy.” In MISO, most states are still regulated and utilities have an obligation to serve. In deregulated areas, the market is supposed to determine electric needs. That, says Stuart, remains to be seen. Skeptics claim that money theoretically targeted for constructing new generating facilities is in fact going to shareholders. On the good side, WPPI’s system operators like the RTO transmission functions. Central dispatch of generation and transmission is working well. Transmission loading is more efficient with an RTO. With a coordinated system, the lines can be loaded closer to their capacity. In the old days, lines were typically loaded with a larger cushion to guard against a transmission overload caused by flows from adjacent systems. With the coordinated system, MISO can see what is going on across all segments of the transmission system. It can respond to unexpected contingencies by telling generators to ramp up or down. MRES’s Wahle is disappointed that MISO is not assuming a prominent role in expanding regional transmission capacity. Congestion costs within MISO are high and Many AMI networks can never work as promised. Only a Smart Network can comprehensively secure your entire network, scale by design from thousands to hundreds of thousands of endpoints, simultaneously manage itself and control IT costs, and support future applications. With EkaNet™ Smart Networks, electric, gas, and water meters will always live up to expectations, and enable utilities to: • Create efﬁcient, ﬂexible and scalable Smart Grid solutions • Deliver a better overall customer experience • Improve meter to cash efﬁciency 1-877-eka-knows AMI . AMR . Fixed . Mobile . Metering . Submetering PUBLIC POWER . www.ekasystems.com 24 SEPTEMBER 2008 http://www.ekasystems.com

Table of Contents Feed for the Digital Edition of Public Power - September 2008

Public Power - September 2008 Contents Perspective 10 Questions What’s Good About RTOs? Capturing Coal’s Carbon Carbon Safety Valves Greater Glass, Greater Savings Getting Customers to Embrace Compact Fluorescent Lights LEEDing Green Kansas City Shows How to Build Green For Governing Boards Safety Community Broadband Hometown Connections Parting Shot

Public Power - September 2008

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