In today’s AUSenergy News Update: Southeast utility reserve margins called into question, East Coast power prices surge as cold weather moves in, and  New Mexico regulators review PNM plan.

Activists push for new RTO as Southeast utility reserve margins called into question

Summary:  A North Carolina group has asked federal regulators to investigate Duke Energy, the Southern Company, and other big Southeastern utilities for possible power price manipulations it says boost utility profits and block renewables and efficiency from the market.  Non-profit group, NC WARN charges that southeastern utilities have built over twice the 14% to 15% reserve power generation capacity they need to meet peak demand.

AUS Comment:  When utilities build excess power plants, it can have two major effects on the market place; customers can incur unnecessary rate hikes to pay for the building of these  plants, or the higher excess energy reserves can drive electricity rates down, literally pricing renewable energy out of the market. Either way – building new fossil fuel power plants is not the answer. The easiest and most cost effective way to ensure energy reserves in the moment is by using Demand Response; promoting temporary cutbacks in energy use or support through outside generators. With Demand Response customers earn additional revenue while strengthening the grid for everyone. It’s a win-win – instead of a win for the Utility only.

East Coast sees strong demand, high power prices as cold weather grips region

Summary: Real-time prices across much of the East Coast Tuesday jumped into triple-digit territory as cold weather blanketed much of the region. In the PJM Interconnection, real-time prices were in the mid-$70s/MWh late Tuesday morning, but had hit around $280/MWh around 6:40 am EST (1140 GMT) for a few of PJM’s eastern load zones.

AUS Comment:  Once again, spikes in electric prices are a key reason why customers should lock in prices to ensure against price gauging this time of year.

Future of coal at stake as New Mexico regulators consider PNM plan

Summary: Monday’s hearing before the New Mexico Public Regulation Commission  began the process of determining New Mexico’s energy policy. PNM (Public Service of NM) claims the $6.8 billion, 20 year proposal to close two of four San Juan coal-burning units, buy Arizona’s Palo Verde Nuclear Station generation, and add new natural gas capacity and a small amount of solar capacity would meet both EPA regional haze restrictions and ratepayer cost concerns. Environmentalists are holding out for more renewables.

AUS Comment:   While the current plan meets the EPA’s regional haze rule; requiring states to work to control air pollution affecting visibility in national parks and wilderness areas, the issue of the two remaining coal plants and the cost of coal ash disposal have not been addressed.  The larger question remains as to why there is not a more sizable investment in future  renewable energy instead of a continued reliance on fossil fuel.