load, according to Brattle, adding, By comparison, large C&I customers show a peak load that is only marginally above

off-peak loads. In view of these difculties, Brattle says, . . . it would likely take several years before a sufcient level of demand response could be achieved. Clearly, Brattle reports main authors, including lead author Sam Newell, have a soft spot for markets. Looking at the ve options considered, they state, Energy-only with market-based reserve margin is theoretically the most efcient option because it allows customers to choose the level of supply based on prices and their value of avoiding curtailment, without having to pay for costly reserves they may not want. The report, in parts, reads like classic economic textbooks on market design. We believe that energy-only, perhaps with rare backup procurement of short-term resources as needed to support a very minimal reserve margin, might be the most aligned with the Commissions demonstrated philosophy to let markets work, the report stated, cautioning about the need to manage public expectations about reliability implications and the potential for periodic high spot prices. The bottom line? Energy-only will deliver less reliability than the current (ERCOT) target until more price-responsive demand is developed. Concerned about the hot summer months parts of Texas have experienced triple-digit temperatures in Fahrenheit already the regulators decided to do the easiest and safest thing by raising the wholesale market cap to $4,500/MWh from the current $3,000, already the highest in the U.S. Even higher caps, as high as $9,000/MWh, cannot be ruled out if the new cap encourages more investment in peaking capacity. In making the announcement in late June, Donna Nelson, the chairwoman of the Texas Public Utility Commission, said, We cannot ignore the situation and move blindly forward, hoping we will have enough electricity. The decision is not expected to have a noticeable or immediate impact on retail consumers, since most competitive retailers buy energy under long-term contract from generators. July 2012, Vol. 25, Issue 6

Only customers who buy directly from the wholesale market on real-time prices would be affected by the offer cap price rise. These customers are typically sophisticated and one would assume know what they are buying. The decision, however, is not likely to help with this years peak demand, expected in July or August, and perhaps not even for the next couple of years, as it takes at least a few years for new generation to be nanced, permitted, and built. Energy-intensive industrial users, who opposed the rise of the wholesale cap, reckon the decision would add to energy costs. The higher cap, had it been in place last year, would have added an estimated $4.7 billion to the states annual electricity bill. The next two months will be critical, especially if it turns out to be very hot.&
http://dx.doi.org/10.1016/j.tej.2012.07.007

Electric Vehicles: A Blessing, but Only Up to a Point

Electric vehicles (EVs), as everyone knows, can be a blessing in reasonable numbers. They can be charged overnight when plentiful baseload generation is available at low costs or better yet, when wind is blowing hard with little demand on the network at night and during early morning hours. In the latter case, a eet of EVs can run on carbon-free and essentially free renewable energy. In many regions, too much wind is available during off-peak hours at negligible or even negative cost. Taking the scenario one step further, some of the EVs can potentially sell some of their excess energy back to the grid during the afternoon peak hours when prices are high, the socalled vehicle-to-grid (V2G) technology. But too many EVs charging at the same time and at the wrong time is an entirely different story, as was discussed during a forum organized by the Pennsylvania Public Utility Commission (PPUC) in early June 2012 to examine the effect of EVs and alternative fuel vehicles on utility infrastructure. 1040-6190/$see front matter 5

Among the speakers at the forum was Terry Boston, CEO of the PJM Interconnection, the biggest organized market operator in the U.S. His message was a stereotypical good news-bad news story. He said the PJM grid, with a few extra bells and whistles, could conceivable recharge as many as 25 million EVs if the charging is properly synchronized between midnight and 7 a.m. But if all of those (drivers) came home at 5 p.m. and plugged in (their EVs), we would have a voltage collapse. How many EVs would it take to break the PJM system? Boston said if a million EVs had attempted

to tap into the PJM network on a hot day similar to July 21, 2011, . . . when the grid labored under record loads, a massive blackout would have occurred. PPUC chairman Robert F. Powelson, rhetorically asked, Should we be worried? . . . Who pays for it? Thats a question as you make upgrades to the distribution system. EVs have not arrived in large enough numbers to collapse the network, but one has to prepare for the days when they do.&
http://dx.doi.org/10.1016/j.tej.2012.07.008

Net Metering: Growing, Worrisome Trend

Continued from page 1

A few years ago, both the 33 percent new renewable goal and 12 GW of solar PVs would have been regarded as visionary but not in any way realistic. California has already passed the 20 percent new renewable target and there is optimism that the 33 percent target can also be met by 2020 as required. But what about the solar rooftop PVs or more broadly speaking, any type of distributed generation (DG), also called on-site generation or customer-side generation all referring to anything that produces electricity or some other form of energy such as hot water on the customer side of the meter? How likely are the types of numbers thrown around with regularity by the likes of Gov. Brown? The short answer is that a lot more is possible, and the ultimate number critically depends on:  The prevailing grid-supplied retail electricity rates which are broadly rising;  The cost of on-site generation which is broadly dropping; and  The prevailing net metering regulations which, as well explain, have had some unintended consequences.
6 1040-6190/$see front matter

In high-cost places like Germany or California, the juice provided by the grid is already expensive and likely to become even more costly over time. In the case of Germany, the countrys decision to shut down its perfectly safe operating eet of nuclear reactors prematurely by 2022 and partially replace them with more renewable generation is likely to lead to higher prices and your guess is as good as ours as to exactly how much higher. The story is much the same in California, not because its nuclear plants are being phased out, but because of the growing renewable component, grid modernization, the effect of the climate bill, and other factors all contributing to rising electricity prices. Making matters worse as extensively noted in the past in this space are the rising tiered pricing that makes grid-supplied electricity progressively more expensive as consumers use larger volumes. Already, many nd it cost-effective to invest in DG as well as energy efciency improvements to avoid the excessively high top residential tiers. By all indications, the top tiers in California will become more expensive, perhaps as high as 50 cents/kWh for heavy users by 2020, if not sooner. The Electricity Journal