How Will Capacity Markets Change? Are Proposed Reforms Enough? – A Restructuring Today webcast

Get a primer on the emerging capacity markets debate from FirstEnergy CEO Tony Alexander, NEPGA President Dan Dolan, ISO-NE Principal Analyst of Market Development Andrew Gillespie and the Regulatory Assistance Project Senior Advisor Michael Hogan.
By: Restructuring Today
 
ROCKVILLE, Md. - April 1, 2014 - PRLog -- Capacity markets were initially designed to fill in the “missing money” created by caps on energy prices and the above-market reserve margins that are the industry standard. They have led to the growth of demand response, some new generation and the retention of older units that might have retired otherwise. They have also met with a healthy dose of skepticism from some quarters and lots of litigation.

Up until now, capacity markets have been focused on meeting a “bland” resource adequacy requirement at some point in the future, but lately some have started talking about changing that basic design element. Nuclear power has gone from raking in the cash when gas cost $7/MMBTU, to seeing a wave of retirements now that shale gas has cut the price of the marginal fuel. Some in that industry want to see changes to the energy markets to avoid retirements of clean power plants.

The rise of renewable power in response to state mandates and consumer demand has led to a focus on ensuring enough flexible capacity (from gas plants) is there to back up the intermittent resources and some have turned to capacity markets as a potential answer. ISO New England is trying to solve its winter gas peak problems through a big redesign of its capacity markets, though most stakeholders would prefer stronger scarcity pricing provisions.

FERC has opened a capacity markets inquiry that is looking at these issues, though it is unlikely that the final product of that will lead to massive changes that must be adopted by the capacity markets it regulates.

Get a primer on this emerging debate from Restructuring Today's webcast titled “How Will Capacity Markets Change?” scheduled for Wednesday, April 9 from 2-3:30 PM Eastern Time.  The on-demand download will be available for purchase after the event. Visit www.restructuringtoday.com/capacitymarkets or call +1-301-769-6812 (888-637-7776 toll-free in the US and Canada) for details.

KEY LEARNING POINTS:

    * Now that capacity markets have been running for several years, is it time for a major change?

    * What should the product be that these markets are procuring?

    * If the markets start to focus on attributes other than resource adequacy what does that mean for their overall cost?

    * Gas is cheap, coal has higher environmental burdens and renewables are no longer a niche.

    * Are changes to these markets needed given how the market dynamics have evolved since they were created?

    * Are there other market approaches than capacity markets that could meet consumer demand and public policy goals?

DISTINGUISHED PANEL:

    * ANTHONY ALEXANDER is president and CEO of FIRSTENERGY. Alexander has guided FirstEnergy through numerous significant events including mergers, acquisitions and divestitures, while also successfully leading the company through complex regulatory and environmental challenges and varied operational, financial and related issues. He is a leading proponent of electric competition and has participated in many national and regional forums on the key issues facing the electric utility industry.

    * DAN DOLAN has served as president of the NEW ENGLAND POWER GENERATORS ASSOCIATION (NEPGA) since the fall of 2011. NEPGA is the trade association representing 80% of the installed generation capacity in New England, approximately 26,000 MWs. Dolan is the principal spokesperson and oversees all activities for the largest trade association representing competitive electric generating companies in New England. He leads a staff that represents the membership on electricity market rules development and expansion of wholesale electric competition and is a frequent speaker at legislative and regulatory hearings as well at industry conferences.

    * ANDREW GILLESPIE is a principal analyst of market development at the ISO NEW ENGLAND. He has twenty years of energy industry experience in power plant engineering and performance monitoring, asset management and emissions and energy trading. Gillespie is responsible for developing design improvements in New England's electricity markets at the ISO New England, including drafting appropriate market rules and manuals to implement those improvements.

    * MICHAEL HOGAN is a senior advisor to the REGULATORY ASSISTANCE PROJECT on matters relating to power industry decarbonization in Europe and the US, in particular matters of wholesale market design, the role of demand response and integration of intermittent renewable generation.

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Details about Restructuring Today's "How Will Capacity Markets Change?” webcast is available at http://www.restructuringtoday.com/capacitymarkets or by calling +1-301-769-6812 (888-637-7776 toll-free in the US and Canada) for details.

Restructuring Today’s mission is to deliver exclusive news chronicling ongoing efforts to open competitive wholesale and retail energy markets with in-depth analysis on why some fail and others succeed.

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