R Street comments to FERC on uplift costs

Pursuant to the Federal Energy Regulatory Commission’s Notice of Proposed Rulemaking issued Jan. 19, 2017, the R Street Institute respectfully submits these comments in response to the commission’s proposed revisions to require regional transmission organizations and independent system operators to allocate the costs of real-time uplift resulting from deviations to market participants that caused the uplift costs. The commission also proposes to enhance transparency by requiring RTO/ISOs to publicly post uplift payments and operator-initiated commitments and define transmission constraint penalty factors in the RTO/ISO tariff, along with the circumstances the factors set locational marginal prices and any procedures for modifying the factors. Overall, RSI supports the intentions of the NOPR and specific proposals to improve transparency. RSI emphasizes a principles-based approach to uplift cost-causation and cautions against overly prescriptive methodologies that may have unintended consequences.

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