Views Opposing Capacity Markets
Views Opposing Capacity Markets
Any opinions voiced in the articles linked below are those of the article authors only, and not necessarily endorsed by Competitive Assets
- Feb 19, 2014: Will The New Texas Power Report Change The Game?
- Feb 19, 2014: Proposed “Electricity Tax” Sends Wrong Message To Texans—Old And New
- Feb 20, 2014: Texas Capacity Market Supporters Know What Future Energy Market Prices Will Be to Make Claim on Cost of Capacity Market; Except They Don’t Know What Future Energy Market Prices Will Be, Which is Why They Need a Capacity Market
- Battle for Future ERCOT Electric Market is Heating Up
Copyright 2014 by Competitive Assets, LLC. All rights reserved
The war of words is heating up in the ongoing effort to address resource adequacy concerns in Texas. A group, Texans for Reliable Power, is running radio ads, noting that: “A new report says rolling blackouts could be 10 times more likely in a few short years,” and that a capacity market is the answer. The ad asks its listeners to contact legislators to tell them “you don’t want to be left in the dark and to act before the crisis.” The list of supporters on the group’s website includes several former FERC commissioners. The ads come after a couple of setbacks for capacity markets proponents, as explained in a subscription-only article in the Sunday’s Austin American Statesman, Texas blackout debate – doing nothing is now an option. It notes recent developments, including: (a) ERCOT’s new Load-Forecasting Methodology (also, ERCOT Board’s update), which lowers peak demand (e.g., by 4,000MW in 2016); and (b) the Brattle Group’s report, which “determined that the existing wholesale market should create ‘sufficient reserves’ for years,” barring unforeseen political reactions. The article quotes Senator Fraser, “There is no crisis;” Commissioner Marty: “We’re getting information now that suggest we have room to breathe;” and Chairman Nelson: “I think it’s time for us to turn it over to the legislature.” This may have been the first time the Chair publicly suggested turning the matter over to the legislators. The next phase in the debate may be a struggle over numbers; for example, how much additional cost would a capacity market and/or mandated reserve margin impose on consumers vs potentially lower energy prices sometime in the future.
- Feb 8, 2014: Copelin: Texas Blackout Debate — Doing Nothing Is Now An Option
- Feb 5, 2014: ERCOT Energy-Only Market Expected To Support Average Reserve Margin
- Electricity Capacity Markets Are Nothing To Advertise About
Copyright 2014 by Competitive Assets, LLC. All rights reservedOn 1/20/14, the Austin American Statesman published an op-piece from the Texas Public Policy Foundation, arguing against the recent advertisement by a pro-capacity-market group, Texans for Reliable Power, that Texas is running out of generation capacity. In what is yet another salvo in the ongoing struggle for public opinion on the pros and cons of the two types of electric markets, the author, Kathleen Hunker, explains what happened when ERCOT declared Energy Emergency Alert during the recent cold spell. She looks at regions that have a capacity market and concludes that it does not protect customers against unplanned outages and potential shortages in extreme weather.
- Jan 21, 2014: Behind Texas Electric Grid Emergency Alert, a Power Plant Failure, Not Demand
- Jan 21, 2014: Unplanned Generation Outages DOUBLE After Introduction of Capacity Market; 13% of Total Capacity Supply Obligation Offline During Heatwave
- Jan 21, 2014: What Billions in Capacity Payments Buy: Shoestring-Operated Generators Unable to Run Because No Staff is Present
- Jan 21, 2014: Seven Years Later, Capacity Market Conceded by RTO To Be A “Failure”
- Jan 14, 2014: NRG’s David Crane Envisions Energy Future of “Choice,” “Self-Determination”; Yet Company Favors Top-Down Capacity Mandates from Gov’t
- Jan 8, 2014: Texas Oil Lobby Takes On Electric Power Generation Lobby
- Jan 8, 2014: Oil And Gas Industry Says No On Capacity Market Proposal
- Jan 7, 2014: Texas Power Companies Want More $$
- Jan 6, 2014: Texas Oil & Gas Producers Criticize Skeletal Nature of Capacity Market Proposals; Point to Prolonged Nodal Implementation As Indicative of Pitfalls
- Dec 31, 2013: FERC Accepts PJM’s Streamlined Emergency Demand Response Registration Process
- Dec 28, 2013: New England, With Capacity Market, Seeing More Retail Energy Suppliers Default than “Volatile” Texas Energy-Only Market
- Dec 27, 2013: PJM Reports “Poor Generator Response” Led to “Operational Issues” on Day Firm Load Shed
- Dec 19, 2013: Noble Americas Retail Provider Warns Capacity Market in Texas Will Lead to Customer Dissatisfaction with REPs, Competition
- Dec 17, 2013: H-E-B, Shell Oppose Texas Capacity Market
- Dec 17, 2013: Latest Six-Year Fixed Product from FirstEnergy Solutions Reinforces How Capacity Market Skews Playing Field in Retail Market
- Dec 17, 2013: NRG to Receive Subsidized, State-Arranged Contract to Repower New York Capacity
- Dec 16, 2013: Keep Capacity Markets For Electricity Out Of Texas
- Dec 9, 2013 On State’s Power Grid, Which Bogeyman Are We Fighting?
Copyright 2013 by Competitive Assets, LLC. All rights reservedThe Austin American Statesman published an article titled “On state’s power grid, which bogeyman are we fighting,” which summarizes many of the difficult issues in the current debate about resource adequacy. Two of the main ones are clarifying the 1-in-10-years event and agreeing on a reliability standard.
- Dec 6, 2013 Democrat Candidates for Governor and Lt. Governor Weigh in the ERCOT Electric Market Change Discussion
Copyright 2013 by Competitive Assets, LLC. All rights reserved
Texas Senators Wendy Davis and Leticia Van de Putte, running for Governor and Lt. Governor, respectively, waded into the discussion about a potential capacity market in Texas, by filing comments in Project No. 40000 (Davis and Van de Putte), related to resource adequacy. Both urged the Commission to conduct a cost/benefit analysis before proceeding any further in its decision-making process. Senator Davis suggested that the analysis focus on these points:
- What would the impact be on the costs of electricity to the average residential ratepayer, the average commercial ratepayer, and the average industrial ratepayer?
- What guarantee can be provided that switching to a capacity market will result in the construction of new generation, eliminating the specter of future capacity shortfalls?
- What might the impact to our state’s economy be were such a shift to occur, measured particularly by potential impact to the costs of doing business in the state and the subsequent impact that might occur to our state’s continued ability to attract and grow business? In this regard, I am particularly interested in determining the potential impact that added costs might have to the energy production sector of our state’s economy.
- The next step in this project will be the filing a comments on 12/16/13, and a workshop on load forecasting on the same day.
- Dec 4, 2013: In Texas, Reliability Concerns Pit Manufacturers Against Generators
- Dec 3, 2013: The $4 Billion Texas Electric Bill
- Dec 2, 2013: Debate Over a Changing Texas Energy Market Heats Up at Senate Natural Resources Committee Hearing
- Nov 26, 2013: Texas Regulators Warned Against Power Capacity Market Without Legislator Support
- Nov 26, 2013: Industry Group Proposes Alternative To Capacity Market In Texas
- Nov 26, 2013: Industrial Group Calls Power Plan Too Costly
- Nov 25, 2013: Manufacturers Strongly Oppose Moving Texas Power to a Capacity Market
- Senator Fraser Tells PUCT, “Slow Down!”
Copyright 2013 by Competitive Assets, LLC. All rights reserved
- Amid accusations of “agency creep,” the Chair of the Senate Committee on Natural Resources reprimanded the PUCT at the 11/25/13 hearing about getting ahead of itself and “putting the cart before the horse” in its deliberations about resource adequacy and mandated reserve margin. Senator Fraser asked the Commissioners to slow down, reminding them that the change to a capacity market would be major, and that the legislature also has an opinion on the matter. The Committee then heard from various stakeholders, mostly in opposition to a potential capacity market. To read a complete summary of the hearing, please subscribe to Texas Electric Watch. If you are interested in purchasing this TEW issue (including the supplemental issue), please click here. If you are interested in subscribing the Texas Electric Watch, please click here or call Competitive Assets at 512-581-0151.
- Nov 25, 2013: On Market Decision, Lawmakers Question PUC’s Authority
- Nov 25, 2013: Lawmaker Says Texas Agency Moving Too Fast To Reform Power Market
- Nov 25, 2013: Texas House Representative Turner: A Windfall For Power Dealers
- Nov 25, 2013: Texas Manufacturers Criticize Proposed Changes To Power Grid
- Nov 25, 2013: Wal-Mart, Valero Oppose Texas Capacity Mandate, Would “Increase Costs and Harm Texas Economy”Nov 25, 2013: Opinion: Capacity Market Facing 1,000 MW Deficit of Existing Resources
- Nov 25, 2013: Latest New England Capacity Market Mess Shows Fantasy of “Texas-Style” Capacity Market
- Nov 25, 2013: Pressure Mounts Against Corporate Welfare For Texas Electric Industry
- Nov 21, 2013: Texas Employer: Capacity Market Would be “Serious Mistake”, Endanger Economic Prosperity
- Nov 21, 2013: Opinion:Texas Cities Best in Job Creation, Economic Strength (Despite Generators “Talking Down” Texas Business Climate; Capacity Market States Again Absent from Rankings)
- Nov 19, 2013: Municipal Groups Knock Proposed Changes In Texas Power Market
- Nov 19, 2013: Texas Coalition for Affordable Power: Capacity Market for Electricity Would Result in Higher Bills, More Regulations
- Nov 18, 2013: More Texas Economic Engines (TI, Oil Producers) Line Up Against Capacity Market
- Nov 18, 2013: Texas Capacity Market Supporter Warns Customers of Added Costs from ISO-NE’s Need to Procure “Backup Generation” (Capacity Market Not Providing Reliability)
- Nov 15, 2013: Drivers of Texas Economic Growth Say Mandating a Reserve Margin Premature
- Nov 13, 2013: Texas REP: NRG’s Actions Show Energy-Only Market Driving Investment in Capacity; REP Also Says Legislature Did Not Intend for ERCOT to Run “Capacity” Market
- Nov 7, 2013: Opinion: Texas Capacity Market Supporter Continues to Call New Capacity Investments in PJM Capacity Market “Questionable”, Again Says New Plants “Unlikely to be Completed”
- Nov 5, 2013: Bennett: Idea For ‘Capacity Market’ In Electricity Would Hurt Us All
- Nov 4, 2013: This Electricity Market Change Could Cost Texans Billions and Pollute the Air
- The Perils of Forecasting Texas Electricity Needs
Copyright 2013 by Competitive Assets, LLC. All rights reserved
On 11/3/13, the Austin American Statesman published an article (subsc. only) describing the difficulties and coming changes in energy forecasting at ERCOT. The author notes that the longer the term of the load forecast, the less certainty there is. For example, the reserve margin changed from 14.48%, as predicted in December 2010, to 7.64% in 2011, 10.9% in 2012, and then to 13.8% in 2013. The December 2013 report on Capacity, Demand, and Reserves (CDR) will use a revised methodology for load forecasting, which is expected to be more accurate.
- Oct 28, 2013: Electricity, But At What Cost For Texas?
- Oct 28, 2013: Opinion: New York ISO Seeks Phase-In of New Capacity Market Zone to Mitigate “Rate Shock” — 25% Increase in Retail Rates Projected from Capacity Market!
- Oct 28, 2013: Government Knows Best: Texas Capitulates to Capacity Owners, Adopts Mandated Reserve Margin
- Oct 28, 2013: Opinion: Alternatives to Texas Capacity Auction? Many Superior & Viable Options Exist, But Don’t Bet on Them
- Oct 24, 2013: Opinion: Investors Say They’re Willing to Take on Risk of Texas New Build — Then Advocate Market Design Eliminating Any Substantive Risk
- Oct 23, 2013: Opinion: Texas Capacity Owners Misrepresent Position of Independent Market Monitor in Pushing for Capacity Market
- Oct 23, 2013: Opinion: Texas REP: Capacity Market Would Allow Capacity-Owning REPs to Put Me Out of Business
- PUCT Should Make the Right Call
Copyright 2013 by Competitive Assets, LLC. All rights reserved
On 10/21/13, the Austin American Statesman published an opinion piece by Kathleen Hunker of the Texas Public Policy Foundation, arguing against a mandated reserve margin and capacity market in Texas. Calling it a “corporate redistribution scheme,” she says that generators want such “radical transformation” because it is necessary to maintain a reliable supply of electricity. In her view, however, there is no energy shortage and the energy-only market is working well: “In fact, the transition to competition has been so successful that the market has too much electricity today – which is one reason prices are so low.” At the end, the author reiterates that “the PUC should not rush into a decision to mandate a reserve margin. In fact, it should not adopt a mandatory reserve margin at all. Projections of future reserves in a capacity market would be no more reliable than projections today, but the cost of poor projections for consumers would be significant.”
- Oct 9, 2013: Report: Correcting for Load Forecast Errors “Debunks” Myth ERCOT Facing Resource Adequacy Shortage
- Oct 8, 2013: Resource Adequacy Hype Doesn’t Fit the Facts
- Oct 8, 2013: 2011: Calpine Says “Far Too Soon” to Know Whether PJM Capacity Market A Success or Failure — Says Capacity Market Has “Proven Track Record” One Year Later
- Oct 8, 2013: Opinion: Texas Market Monitor: “Not Sure” Any Capacity Market a “Good Facilitator” of Decision to Invest
- Oct 8, 2013: Opinion: Texas Energy Consultant Details Innovative Generation Development Under Current Market Design
- Oct 8, 2013: Texas Representative Sylvester Turner Files Comments with PUCT before Today’s Resource Adequate Workshop
- Oct 7, 2013: Moravec: Perils Of This Electricity Plan in ERCOT
- Oct 3, 2013: Opinion: With 30 States Having No Electric Choice, Compete Coalition Decides to Air Ads in — Texas?? (Compete “Reliability” Radio Ads Warn of Texas “Power Shortages”)
Oct 2, 2013: Texas Public Policy Foundation Releases Paper Examining Capacity Markets: Reliability Concerns Do Not Warrant The Heavy Regulation Of A Capacity Market
- Oct 1, 2013: Opinion: Exelon SVP: PJM Capacity Market a “Recipe” for What Can Happen in Texas
- Sept. 25, 2013: Texas Industrials Pose Alternate Plan to Steer Talk Away From Capacity Market
- Sept. 24, 2013: Texas Industrial Customers: New Generation Being Built in Texas Belie Claims of Impending Disaster
- Sept. 24, 2013: Opinion: Parent of Texas REP Says Electricity “Essential Part of Life”, Texans “Deserve Electric Service 100% of the Time” (Will REP Cease Disconnects for Non-Pay?)
- Sept. 24, 2013: Opinion: Texas Customers Universal in Opposition to Mandated Reserve Margin, Capacity Market
- Sept. 26, 2013: Opinion: Capacity Owner CFO: Experience in PJM Capacity Market Has Been Like “Whack-A-Mole”; Warns “Steel in the Ground” Being Replaced by New-Build Generation That “May Not Be There”
- Sept. 12, 2013: Opinion: Paying for Mandated Reserve Margin, Capacity Market Can’t Save Customers in Ohio, Pennsylvania, Michigan from Involuntary Load Shed, Outages due to Lack of Available Supply
- Sept. 12, 2013: Opinion: With Blackouts in Capacity-Market Dependent PJM, Texas Has Its Answer on Whether It Needs Mandated Reserve Margin
- Sept. 11, 2013: Opinion: Mandated Texas Reserve Margin Would Waste Investment in Smart Meters; Make Customers Subsidize REP R&D
- Sept. 10, 2013: Opinion: Economist: “Vast Majority” of Capacity Market Payments in RTOs Go To “Resources That Are Economic” That Will “Operate The Same” Regardless of Capacity Payment
- Sept. 5, 2013: Report: Real-Time Co-Optimization in ERCOT Would Cost Less Than 1% of Annual Capacity Market Costs
- Sept. 5, 2013: Opinion: Arizona Commissioner Frustrated with Polarization of Retail Choice Investigation, Suggests Hearing and Issues Supplemental Questions — Texas Capacity Issues to Take Center Stage
- Sept. 3, 2013: Generation Owner: PJM Capacity Market “Deeply Flawed,” and “Needs to be Fixed on Many Levels”
- August 28, 2013: Opinion: Study: Texas Capacity Market to Cost $4.7 Billion Annually
- August 26, 2013: Opinion: FERC Staff Report Confirms Capacity Market Designs Not Ready for Prime Time, Texas Implementation
- August 20, 2013: Opinion: Competitive Suppliers in Arizona: Outlook for Dire Resource Adequacy Consequences in Texas “Wholly Overstated”
- August 15, 2013: Power: Capacity Payments Wrong Tool to Fix a Real Problem
- August 9, 2013: Big Users in Texas Oppose Major Change to Stretched Power Market
- August 9, 2013: Opinion: NRG CEO Admits Merchant Build “Nearly Impossible” in Any Market, Including Capacity Markets, As Texas Chair Nelson Says Capacity Market Warrants Exploration
- August 9, 2013: Big Users in Texas Oppose Major Change to Stretched Power Market
- August 7, 2013: Opinion: FirstEnergy CEO Says PJM Capacity Market Has “Fundamental Flaws” Which “Impede Investments,” “Impact Reliability”
- August 2, 2013: Direct Energy Now Sees Market Purchases, Not Generation Ownership, as Best Mechanism to Manage Texas Super-peaks, Weather Risk
- August 2, 2013: Opinion: Centrica Exec’s Comments Highlight How Capacity Market Would Put Independent Texas REPs Out of Business
- July 26, 2013: Calpine Exec Says Not All New Capacity Clearing PJM Capacity Market Likely to Get Built
- July 26, 2013: AEP CEO: Treatment Under PJM Capacity Market is “Socialism”
- July 16, 2013: Tony Bennett: ‘Capacity Market’ Means Electric Tax for Texans
- July 12, 2013: Opinion: Capacity Markets: Encouraging Gold-Plating of the Electric System
- July 8, 2013: Opinion: Texas Should Say No to Electricity Tax On 7/7/13, the Austin American Statesman published an opinion piece by Tony Bennett, the president of the Texas Association of Manufacturers, titled “Bennett: Texas Should Say No to Electricity Tax ” (subscription only). In it, he warns against “an ill-conceived push to switch Texas from a competitive, deregulated-electricity market to a capacity market,” which will create a tax on everyone with a meter. He also cautions that “a shift to capacity market would threaten competition, choice, and access to affordable, reliable energy in Texas for everyone.”
- July 3, 2013: Opinion: Language in Op-Ed by NRG Could Have Unintended Consequences
- July 1, 2013: Capacity Market No Longer Designed to Clear at Lowest Cost
- June 25, 2013: Forbes Calls a Texas Capacity Market What It Is — “More Regulation”June 24, 2013: Capacity Markets, The Reality: Paying for Resources That Don’t Respond When Needed
- June 21, 2013: Capacity Markets: Efficient As Buying a 40-Year Clunker
- June 18, 2013: Capacity Markets Harming Retail Choice? New England States Seeking to Buy Large Hydro due to Frustration With Wholesale Market
- June 18, 2013: FERC Technical Conference on Capacity Markets: Relevance for Texas?
- June 12, 2013: Opposite View to NRG’s June 11 Op-ed
- April 22, 2013: TEPA’s Roylance Seeing Greater Demand Response Offers from Texas REPs, Calls Capacity Market Inconsistent with Customer Choice
- April 10, 2013:Texas Electric Deregulation Has Failed??
- April 1, 2013: Environmental Defense Fund Releases “The State of the Energy Crunch in Texas” Report
- March 22, 2013: Shock: Brattle Says Energy-Only Market Sustainable From a Resource Adequacy Perspective
Posted by CompetitiveAssets on October 3rd, 2013