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NARUCElectricityCommittee

November16,2009

JayMorrison

SeniorRegulatoryCounsel

NationalRuralElectricCooperativeAssociation

jay.morrison@nreca.coop

(703)9075825

mailto:jay.morrison@nreca.coopmailto:jay.morrison@nreca.coopmailto:jay.morrison@nreca.coopmailto:jay.morrison@nreca.coop

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DRBid/Responsedata

WholesaleMarket

MWH

$

HomeAutomationNetwork

On/Off

http://rds.yahoo.com/_ylt=A9G_bDjfG1VKOyEB6WKjzbkF/SIG=13lqr7btt/EXP=1247178079/**http:/www.aquapoolstore.com/images/pool-pumps/Pentair-Pools-Pinnacle-High-Pressure-Pool-Pump.jpg

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WHATSMISSINGINTHISPICTURE?Theresnostatejurisdictionalentityto:

Setjustandreasonableratesforretailelectricity

Ensureadequategeneratingcapacity

Build

a

balanced

and

environmentally

sustainableenergyportfolioHedgeagainstmarketabusesandmarket

volatility

for

retail

consumersBuildasmartgridthatvaluesbroadriskmanagementandoperationalbenefitsof

smart

grid

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MARKET

MWH

Distribution

Systems

G&Ts

http://rds.yahoo.com/_ylt=A9G_bDjfG1VKOyEB6WKjzbkF/SIG=13lqr7btt/EXP=1247178079/**http:/www.aquapoolstore.com/images/pool-pumps/Pentair-Pools-Pinnacle-High-Pressure-Pool-Pump.jpg

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Inthisvision,alocalutility:Establishesretailratesatthecostof

serviceHedgesagainstriskandvolatility

Canbuild,financeandcontractlongtermforresourcestoensure:GenerationadequacyBalanceintheportfolio

Looksattheentiresystemholistically

Gains

efficiencies

of

scale,

scope,

and

integration

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CoopSystemOptions

Direct

load

controlConsumerinformation(e.g.,orbsand

internet)

DynamicpricingCPPorPTR

RTP(forinterestedC&Imembers)Biddemandresponseintothemarket

NonDemandrelatedhedging

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Co

ops

lead

on

smart

grid

implementation: With10%ofload,coopshave18%ofnationsDR

capability

MorethanhalfofcoopshavebegunAMIrolloutinatleastpartoftheirsystems

Co

ops

pioneered

interoperability

with

MultiSpeak

Coopsareinvestigatingdynamicpricing

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Whatiselectricity?

Anessentialservice

OrAcommoditylikeporkbellies

(ortea,orsteak)

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Whichcanbettermeetconsumers

needs?

Verticallyintegratedutilitieswithanobligationtoserve?

or

Markets?

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WhatdoestheDOEVisionmeanfor

StatePolicyMakers? Thetoastercouldbeacriticalcyberasset

Using/notusingthetoasterisapracticeaffectingwholesale

electricityprices Retailrates,termsandconditionsofretailservice,generation

adequacy,retailreliability,selectionandoperationof

distribution

equipment,

interconnection

of

generation

and

storageatretail,andmorecouldbecomeFERCjurisdictional

EndusecustomerswithgenerationortheabilitytorespondtopricecouldbeQFsorpublicutilitiessubjecttoFERC

jurisdiction ThiscouldapplyevenoutsideofRTOsasFERChas

encouragednonRTOIOUstoengageinnondiscriminatory

economicdispatch,establishingarealtimemarginalcostforenergyoutsideorganizedmarkets

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Whatdoesthedebatemeanfor

StatePolicyMakers?Ifyourutilitieshavealreadydivested

theirgenerationassets,theDOEvisioncouldhelp:

Pricestodevicesgivesconsumerswhoarealreadyexposedtowholesalemarketriska

tool

to

reduce

their

costsPricestodevicescouldsubstituteforDR

programsifnolongeroperatedbyverticallyintegratedutilities

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WhatdoesthedebatemeanforState

PolicyMakers?

Iftheutilitiesinyourstatestilloperate

underobligationtoserve:GetinvolvedintheSGpolicydebateand

standardsdevelopmentprocessnow!

Yourjurisdictionisatstake

EnsurethatnewfederalpolicyandstandardssupportboththeDOEandcoopSGmodels

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WhatdoesthedebatemeanforState

PolicyMakers?

If

the

utilities

in

your

state

still

operate

under

obligationtoserve,dontdisregardthebenefitthattheSGmayofferyourconsumers

SGcanenhancetraditionalutilityserviceifproperlyplannedandimplementedatthe

paceofvalueThinkaboutlongtermtechnology

planning ratherthanSG

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