A Critique of the Resource Adequacy Requirement Proposed in FERC’s SMD NOPR
✍ Scribed by Hamish Fraser
- Publisher
- Elsevier Science
- Year
- 2003
- Tongue
- English
- Weight
- 83 KB
- Volume
- 16
- Category
- Article
- ISSN
- 1040-6190
No coin nor oath required. For personal study only.
✦ Synopsis
Market Design Notice of Proposed Rulemaking (SMD NOPR) 1 states that ''the development of structurally competitive markets is the Commission's long-term goal'' but that because of ''two significant structural flaws'' the ''Commission cannot rely on the interaction of supply and demand in all instances to ensure that prices are competitive and thus just and reasonable.'' The structural flaws are ''the lack of priceresponsive demand, and generation concentration in transmission-constrained load pockets. '' 2 It is true that the lack of adequate price-responsive demand is a serious problem and can prevent a market from being workably competitive. 3 With adequate price-responsive demand, structural competitive concerns can be limited to instances of transmission-constrained load pockets in which generation is overly concentrated.
However, despite diagnosing that a lack of demand response is the heart of the problem, FERC did not prescribe measures in the NOPR to make demand response come about. Rather, it proposed several ''band-aid'' measures to April 2003