Good News For The Grid

The federal D.C. Circuit Court of Appeals reigned in the use of Negawatts by nullifying a 2011 order by the Federal Energy Regulatory Commission (FERC) allowing regional transmission operators to pay for Negawatts1.

Negawatts is a play on Megawatts.

Paying for Negawatts was part of a Demand Response regimen proposed by radical environmentalists to reduce peak load. It allowed RTO/ISO’s to pay aggregators for Negawatts, to reduce demand at the retail level during peak periods.

Negawatts are defined as: Watts that have been eliminated when customers reduce their use of electricity, specifically during periods of peak demand2.

Aggregators are organizations that corralled multiple users into committing to cut demand, and then combining all the committed reductions into a package for which the RTO/ISO would pay. The RTO/ISO paid for Negawatts the same as they would pay for the actual generation of electricity.

The ruling did not eliminate the use of Demand Response using pricing, which was historically utilized with load shedding agreements, typically with industrial companies.

An earlier article, Dangerous Negawatts, discussed why Negawatts are bad for the grid, including the potential for fraud. See Dangerous Negawatts.

Gas turbine power plant in background. Photo and picture by D. Dears
Gas turbine power plant in background. Photo and picture by D. Dears

The D.C. Court ruled, “given [FERCs] Order 745’s direct regulation of the retail market, we vacate the rule in its entirety as ultra vires agency action.”

In other words, the court ruled that FERC lacked statutory authority to make rules directly affecting the retail, rather than the Interstate, wholesale market.

Given this Administration’s bent on cutting CO2 emissions by any means, there is a strong possibility that the ruling will be appealed to the Supreme Court. This is especially true now that the EPA has issued its proposed regulations for cutting CO2 emissions.

For example, the Environmental Defense Fund (EDF) denounced the decision, saying, “we need to ensure that our nation’s policies … [are] fairly valuing clean energy resources, … “

These groups equate nothing, i.e., Negawatts, to clean energy.

Negawatts are not the same as Megawatts produced by power companies. Negawatts are essentially nothing, while Megawatts are real electricity.

The courts ruling is good for the grid, in that it allows RTO/ISOs to compensate for generating electricity, so that new power plants will be built as demand increases.

 

Notes:

  1. The ruling can be seen at http://www.cadc.uscourts.gov/internet/opinions.nsf/DE531DBFA7DE1ABE85257CE1004F4C53/%24file/11-1486-1494281.pdf
  2. An example would be a grocery store turning off some of its lighting or its refrigerators for a predetermined period of time.

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