AUSenergy News Update 01/06/2015
Jan 6, 2015

In today’s AUSenergy News Update: Municipal Aggregation Pilot Bill vetoed in NY, U.S. Demand Response potential grows, FERC declines to reject Power Auction results despite possible market manipulation.

N.Y. Gov. Vetoes Municipal Aggregation Pilot Bill, But “Supports Intent”

Summary:  Gov. Cuomo vetoes bill that would allow Westchester County to operate an opt-out, five year pilot municipal energy aggregation program for residential or “small non-residential” customers receiving electric and/or gas service from New York State Electric & Gas Corporation or Consolidated Edison of New York, Inc., in Westchester County.

AUS Comment:  Though we personally promote and believe in municipal energy aggregation programs, we support Gov. Cuomo’s reasons for vetoing this bill, in that it fails to provide renewably-sourced energy options as well as any protection for consumers prohibiting the use of their secure data for other purposes. We hope that the NY PSC does move forward, however, in enabling community choice aggregation across NY, as a means to lower energy costs for all residents and small businesses.

U.S. demand response potential grows to 29 GW

Summary:  Demand response resource potential continues to grow, and according to federal regulators potential peak reductions from RTO and ISO programs reached 28,798 MW in 2013, a 9.3% increase over 2012 levels.

AUS Comment:   The cold weather in January 2014, prompted high energy demands that were able to be met largely due to demand response resources. “FERC said PJM activated about 2,000 MW of demand response for several hours during one cold weather even in early January and over 2,500 MW for several hours in another later that month.”  Previously thought to be viable only during high summer temperatures, demand response is now a year-round energy resource, that can provide support for the grid and added revenue for small businesses.

Contact AUS to find out more regarding the benefits and requirements of a demand response program for your company.

Despite Potential Market Manipulation, FERC Declines to Reject Power Auction Results

Summary:   The Federal Energy Regulatory Commission (FERC or the Commission) recently opted not to take action to set aside the results of an ISO-NE power auction that was allegedly manipulated. The matter involved the impact of actions taken by an energy provider that altered the outcome of a competitive auction; announcing the impending shutdown of one of its coal-fired plants just prior to the auction and after the deadline for new resources to participate (thereby leaving a significant power deficit, triggering certain administrative pricing rules and driving up auction prices).

AUS Comment:  Due to a difference in opinion as to the regulatory powers held by FERC, commissioners deadlocked in a 2-2 vote, thus allowing the latest auction rate to become effective. However, whichever side of the fence you may sit, the one good note here is that FERC has issued an order requiring ISO-NE to revise its existing tariff to provide for review and potential mitigation of importers’ offers prior to each auction. This will effectively protect future market manipulation like this from happening.

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