newenglandelectricutilitysystem

8/7/2019 NewEnglandElectricUtilitySystem

1/34

New England Power SystemNew England Power System

Massachusetts Technology

Collaborative


2/34

Before DeregulationBefore Deregulation

Electrical utilities established as verticallyintegrated natural monopolies serving captivemarkets

Regulated retail prices allow utilities to recovercosts of adding new plants from customers

Regulators and utilities determined allowable

expenses, which determined customer rates Annual reviews by regulators designed to control

costs

Sharp retail price differences from state to state


3/34

Electricity ProvidersElectricity Providers

Investor Owned Utilities Municipal Systems

Rural Cooperatives Federal Systems (TVA, e.g.)


4/34

MA Restructuring ActMA Restructuring Act

Passed by MA Legislature in 1997

Opened MA Electric Utility Industry to Competition

Renewable Energy Trust

Renewable Portfolio Standard


5/34

What Is Deregulation?What Is Deregulation?

Allows electric generators & marketersbesides local utility to compete to sellelectricity

Retail prices are deregulated to reflectconditions in the wholesale market

Distribution remains regulated About half of U.S. states have at least

partially deregulated electricity markets


6/34

Renewable Portfolio StandardRenewable Portfolio Standard Administered by Division of Energy Resources

Requires that electricity suppliers provide retail customerswith minimum levels of electricity generated from "new"renewable energy sources

Facility must have begun commercial operation after

December 31, 1997 to qualify.

Resources which are eligible for RPS as new renewablesinclude:

solar

wind

ocean thermal, wave, and tidal,

fuel cells using renewable fuels

landfill gas

"low emission" biomass


7/34

Renewable Portfolio StandardRenewable Portfolio Standard

450

685

927

1,176

1,433

1,696

1,986

*One gigawatt-hour

(GWh)=one millionkilowatt-hours

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

+1% per year

until ended byDOER

2003

2004

2005

2006

2007

2008

2009

Annually

Thereafter

Estimated Annual Energy

From New Renewables

(GWh*)

Percent of Sales

From New

Renewables

Year

(Start Date)


8/34

Renewable Energy TrustRenewable Energy Trust

Administered by MA Technology Collaborative

Fostering market sustainability

Increasing demand & shifting consumption to a

greater reliance on renewables Increasing supply of electricity generated from

renewables to meet this growing demand

Increasing the overall level of economic activity &expanding the renewable energy sector inMassachusetts


9/34

Current MA Energy PortfolioCurrent MA Energy Portfolio


10/34

Eligible TechnologiesEligible Technologies

Solar photovoltaic Solar thermal electric

energy

Wind turbine

Ocean Thermal

Ocean wave or tidal Landfill gas

Waste-to-energy Naturally flowing

water & hydroelectric

Low emission,advanced biomass

Storage & conversion Fuel cells


11/34

Major Program AreasMajor Program Areas

Premium Power/Distributed Generation

Green Buildings

Solar-To-Market Initiative

Green Power


12/34

Premium Power/DGPremium Power/DG

Fuel Cells High Reliability

High Quality

Co-Gen Potential

Data Centers

Hospitals Banks


13/34

Green BuildingsGreen Buildings

Energy Efficient Resource

Conservation

Materials

Siting

Healthy Environment Renewable Energy

Technologies


14/34

SolarSolar--ToTo--MarketMarket

On or near-site

Small scale

Regulatory Barriers

Costly

Lack of Infrastructure


15/34

Green PowerGreen Power

Large Scale >1MW

Renewable Energy

Supplied to Grid Premium Product

Greenhouse Gas

Offset


16/34

Power Distribution SystemsPower Distribution Systems


17/34

What Is The Grid?What Is The Grid?

Network linking transmission systems oflocal utilities

One of the largest and most complex objects

ever built Three major U.S. grids:

Rocky Mountains westward Most of Texas

East of Rocky Mountains & Northern Texas


18/34

How The Grid WorksHow The Grid WorksQuebec Interconnect


19/34

Characteristics of the ElectricCharacteristics of the Electric

Power MarketPower Market

Product must always be manufacturedexactly when needed

Demand fluctuates significantly

Transmission systems load and its capacity

to handle the load are in constant flux

Congestion at any point affects all other

parts of the system


20/34

System InterdependencesSystem Interdependences

Electric power flows through the grid as dictatedby impedances in transmission lines, location

where electricity is injected by generators andremoved by the loads


21/34

CongestionCongestion

The real cost of supplying power fluctuates

dramatically with capacity, load and conditions on

the grid from moment to moment


22/34

Key PlayersKey Players


23/34

UtilitiesUtilities

Operated as government-mandated monopolies

before deregulation Exclusive rights to own & operate plants

Vertically integrated: plants, wires, meters

Broken up to foster competition

Today they are regulated companies selling power

to customers Many have sold generating capacity

Deliver power generated by others (wires companies)


24/34

Wires CompaniesWires Companies

Former utilities that sold their power plantsbut retained their transmission anddistribution lines

Now only sell power Lines must be open to all competitors in

power market

Regulated by Federal Energy RegulatoryCommission (FERC)


25/34

Merchant Power CompaniesMerchant Power Companies

Companies that make electricity and trade iton the open market

Generally do not deliver to customers

Many started out as Independent Power

Producers (IPPs)

MPCs expected to control over 25% of all

US power plants by the end of 2002


26/34

Electricity TradersElectricity Traders

Middlemen who buy and sell power on theopen market

Looking to buy low and sell high

Since it cannot be stored, electricity isworlds most volatile commodity

Most active US spot market: electricitythat can be delivered between 6 a.m. & 10p.m. the following day


27/34

Power PoolsPower Pools

State-operated centralized wholesalemarketplace for electricity

Buyers purchase electricity as a group at a

fixed price each day The pool stacks sellers offers from

cheapest to most expensive

Buying begins at the cheapest level andcontinues up the scale until demand is met


28/34

New England Power PoolNew England Power Pool

Formed in 1971

Voluntary association of entities that areengaged in the electric power business in

New England Participants include investor-owned utility

systems, municipal and consumer-ownedsystems, joint marketing agencies, powermarketers, load aggregators, generation

owners and end users


29/34

Independent SystemIndependent System

Operators (ISOs)Operators (ISOs) Air traffic controllers of the electric grid

California, New England, New York, Mid-Atlantic

Utilities own the wires, ISOs run them

Ensures generators equal access to grid Monitor & control flow of power around the

region Electricitys physical properties make it

difficult to control


30/34

ISO New EnglandISO New England

Established July 1, 1997

Manages the New England region's electric

bulk power generation and transmission

systems

Administers the region's open access

transmission tariff


31/34

NE TransmissionNE Transmission

SystemSystem


32/34

Regional TransmissionRegional Transmission

Organizations (RTOs)Organizations (RTOs) In 1999 FERC ruled that all US Investor

Owned Utilities (IOUs) must cede controlof transmission lines to ISOs

Proposal to merge ISOs into four regionaltransmission organizations would overseethose transmission lines

Northeast, Southeast, Midwest, West

More efficient/cost-effective than ISOs


33/34

RegulatorsRegulators

Federal Energy Regulatory Commission Set rates in wholesale electricity markets & enforcing fair and

reasonable prices

MA Division of Energy Resources Implements energy policies that ensure an adequate supply of

reliable, affordable and clean energy for the businesses and

residents of Massachusetts.

MA Dept. of Telecommunications & Energy Ensures that electricity consumers are provided with the most

reliable service at the lowest possible cost


34/34

QuestionsQuestions

newenglandelectricutilitysystem

Documents