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1 Wash. J. Envtl. L. & Pol'y 1 (2011)

handle is hein.journals/wshjoop1 and id is 1 raw text is: Copyright 0 2011 by Washington Journal of Environmental Law & Policy MAINTAINING A BALANCE: INNOVATION IN POWER SYSTEM BALANCING AUTHORITIES Malcolm McLellan & Carol Opatrny* Abstract: The introduction of new power generation, including intermittent resources, into the North American electric grid is exposing the fact that the traditional approach to resource integration is not necessarily cost-effective. At the forefront of analysis is the electric balancing authority; the functional structure that is responsible for maintaining the continuous balance of the demand for and supply of electric power. Electric balancing authorities perform this function according to standards developed by the North American Electric Reliability Corporation and the Federal Energy Regulatory Commission. These services can significantly affect the cost of power. Rather than blindly purchasing balancing services from the local balancing authority, power generators and loads are proactively affecting their cost structure by purchasing balancing services from an adjacent balancing authority or forming a separate balancing authority and self-supplying services. These options do not undermine reliability and the cost controls enabled by competition ensure efficient resource integration. INTRODUCTION ..........2......... ...............2 I. NERC'S ROLE -CERTIFICATION, REGISTRATION AND COMPLIANCE ................... ..........6 II. RELIABILITY STANDARDS FOR BALANCING AUTHORITIES .................................9 III. THE ASSUMPTIONS BEHIND BALANCING AUTHORITY CONSOLIDATION ................17 IV. CONCERNS AND SOLUTIONS ASSOCIATED WITH ADDITIONAL BALANCING AUTHORITIES............21 A. Balancing Authority Reliability Standards .......22 B. Balancing Authority Resource Composition..........23 C. Real-Time Regulation ........................24 D. Balancing Authority Area Diversity ... ..........27 E. Dynamic Scheduling/Pseudo-Ties Mechanisms .......28 F. Forecasting/Scheduling/Dynamic Balancing Resources ......................... .........29 G. Communications, Data Access and Transparency ... 31 * Malcolm McLellan is a Member of Van Ness Feldman, PC, a law firm focused on energy and natural resource law in Seattle, Washington and Washington, D.C.; Carol Opatrny is President of Opatrny Consulting Inc., an energy consulting firm in Battle Ground, Washington. This article represents the views of the authors; it does not necessarily represent the views of any clients of the authors. 1