Passive transmission rights will not do the job
- Univ. of California, Berkeley, CA (United States)
Implementation of transmission capacity reservations as proposed in FERC`s Order 888 requires an active market for direct trading of transmission capacity. Centralized implementation of passive transmission capacity rights via the energy spot market and TCCs will not provide adequate compensation for transmission rights holders and will result in inefficient dispatch and misplaced investment incentives. The U.S. electricity system is characterized by a high degree of interconnection, as well as diverse ownership of transmission assets and generation resources. For this reason, the implementation of open transmission access in the U.S. hinges upon establishment of property rights and usage protocols for the transmission network, along with mechanisms for ownership compensation and usage charges. The Federal Energy Regulatory Commission has established a set of guidelines for transmission capacity reservation and use that would implement the basic requirements for open transmission access to support a competitive electricity market. The FERC proposal defines transmission service in terms of firm transmission capacity from specific points of delivery to specific points of receipt on the transmission grid. It would also permit network service. Capacity reservations can be traded among market participants and reconfigured, so long as the reconfiguration does not infringe on other capacity reservations. Unutilized capacity reservations, or incremental use of capacity when the transmission system encounters constraints, may be compensated or charged for based on opportunity costs. The guidelines allow room for a wide range of interpretations and implementations.
- OSTI ID:
- 543174
- Journal Information:
- Electricity Journal, Journal Name: Electricity Journal Journal Issue: 5 Vol. 10; ISSN ELEJE4; ISSN 1040-6190
- Country of Publication:
- United States
- Language:
- English
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