Upload
avye-gentry
View
21
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Dan Dolan – Vice President Electric Power Supply Association September 2008. Who Will Build the Resources for the Future?. www.epsa.org. What is EPSA?. The national trade association of competitive power sector Nearly 40% of installed generating capacity - PowerPoint PPT Presentation
Citation preview
Dan Dolan – Vice PresidentElectric Power Supply AssociationSeptember 2008
www.epsa.org
Who Will Build the Who Will Build the Resources for the Future?Resources for the Future?
Who Will Build the Who Will Build the Resources for the Future?Resources for the Future?
What is EPSA?What is EPSA?What is EPSA?What is EPSA?• The national trade association of competitive
power sector
• Nearly 40% of installed generating capacity
• Competitive sector built almost all new generation since early 1990s
• New generation was largely at supplier’s risk, not at ratepayer expense
• Nearly all wind generation is being built by competitive suppliers
Wind Projects Completed in 2008Wind Projects Completed in 2008
Competitive Suppliers Rate-Base Construction
Total Capacity (MW)
Rate-Base Construction13%
Percentage of Total Capacity
2365
360
0
500
1000
1500
2000
2500
Competitive Suppliers Rate-Base ConstructionCompetitive Suppliers87%
American Wind Energy Association, 2nd Quarter 2008 Market Report, August 5, 2008
Wind Projects Under ConstructionWind Projects Under Construction
Total Capacity (MW)
Competitive Suppliers Rate-Base Construction
Rate-Base Construction6%
Percentage of Total Capacity
8446
583
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Competitive Suppliers Rate-Base ConstructionCompetitive Suppliers94%
American Wind Energy Association, 2nd Quarter 2008 Market Report, August 5, 2008
Build versus Buy:Build versus Buy:Who Bears the Risk?Who Bears the Risk?
• Utility cost-over runs • Competitive suppliers risk management• New technologies• Large investments
Joint Federal/State ReportJoint Federal/State Report• The FERC and NARUC on July 20 jointly released
a report of "best practices" to ensure a fair and objective system of encouraging robust competition for utility resource needs.
• The report is titled Competitive Procurement of Retail Electricity Supply: Recent Trends in State Policies and Utility Practices and was prepared by the Analysis Group. Available at www.naruc.org.
FERC/NARUC Report QuotesFERC/NARUC Report Quotes• "...because the large capital investments necessary
for development of these types of resources pose potentially valuable opportunities for utilities to enter new resources into rate base, commissions should be aware that utilities may attempt to shield such projects from competition even in situations where market processes are applicable. Despite these challenges, the potential economic gains from imposing the market discipline of competitive procurements on development of capital-intensive and advanced technologies may be great." (p. 19, emphasis added)
FERC/NARUC Report QuotesFERC/NARUC Report Quotes• "Because the utility's (and/or its parent's) financial interests
may not be aligned with those of its customers when the utility selects from among the options, extra care is needed to prevent improper self-dealing by the utility. Best practices under these circumstances require a higher degree of regulatory supervision and scrutiny..." (p. 12, emphasis added)
"...as many states have determined, the benefits of [independent monitors of competitive procurements] seem to outweigh these costs in most instances, and are a necessary element of a credible process where the utility itself has a financial stake in the outcome of the competitive procurement itself." (p. 22, emphasis added)
Change the Way We Think of Change the Way We Think of New Electricity SuppliesNew Electricity Supplies
Change the Way We Think of Change the Way We Think of New Electricity SuppliesNew Electricity Supplies
Credible SolicitationsCredible Solicitations• Collaborative Process
• Local utility submits recommended approach• Multi-day, commission-facilitated collaborative meetings• State Commission resolves outstanding issues
• Independent, Third-party Evaluator• Performs independent evaluation of the bids• Monitors communication between the utility, affiliate• Benefit: Extra pair of “eyes”
Credible Solicitations (cont.)Credible Solicitations (cont.)• Fair Process Must:
• Be free from actual, apparent conflicts of interest• Provide all bidders similar access to information • Require full public review of the utility decision-making
process• If the utility or affiliated entity participates, additional
protections are required • Use of an independent evaluator - reports to commission • Separation of utility personnel - utility’s proposal vs.
evaluating bids• Utility winner must honor its bid prices
Dan DolanVice President,
Policy Research & Analysis
Electric Power Supply Association1401 New York Ave., NW
11th FloorWashington, DC 20005
Telephone: (202) 628-8200Fax: (202) 628-8260
E-mail: [email protected] Website: www.epsa.org