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  • FERC AD12-12 Coordinate Gas & Elec

    • CMU 2012
      The market for electricity imbalances can be converted from a pure penalty mechanism to a competitive market by changing the metric used to set the price, using BPA's tariff as an example.
    • FERC AD12-12: Coordinating Gas and Electricity Markets--Supplemental Comments
      Penalties associated with gas imbalances that occur during periods of Operational Flow Orders (OFOs) result in a discontinuous price structure, which is not a natural part of most markets.
    • FERC AD12-12: Coordinating Gas and Electricity Markets--Post Conference Comments
      Wind power intermittencies will be the big challenge to coordinating the operation of gas and electricity. Synchronizing the scheduling periods for gas and electricity will not help this intermittency issue. Pricing gas imbalances (and electricity imbalances) can help.
    • USAEE 2012 Austin Conference
      Operational metrics (such as ACE and frequency error) can be used to price wind imbalances on a sub-minute basis. The examples use 1 second wind data and two second ACE data from Alaska.
  • FERC Comments
    • RM09-13--Comments opposing NERC
      In modifying its Time Error Correction standard, NERC seeks to reduce the connectivity between its reliability function and the mercantile function managed by NAESB. I argue that increasing this connectivity between the reliability and mercantile functions can improve reliability metrics as has been accomplished in India, which reduced the accumulation of Time Error by pricing (a mercantile function) unscheduled interchange using frequency error (a reliability measure) as the independent variable in the pricing function.
    • AD05-1 Reactive Power Investigation
      Comments on FERC Investigation into Efficient and Reliable Power Supply and Consumption
    • AD10-12--Real Time Physical Markets Between Control Areas
      The industry needs real time markets between and among control areas, not just within control areas. Control areas such as ISOs now burden their neighbors with loop flow and inadvertent interchange. Those burdens would reduce if the offending party had to pay cash for imposing those burdens.
    • RM05-25 Transmission Services--2nd Reply
      A small change in the BPA penalty program for imbalances can create a pricing plan that rewards imbalances that help the system.
    • RM11-24--Accounting for Storage
      “Buy Low, Sell High: Creating A Competitive Intermittency Market In Which Fast Response Storage Systems 1. Can Thrive, But 2. Are Not The Only Participants, Comments Of Mark B. Lively, Utility Economic Engineers,” FERC Docket RM11-24-000, Third-Party Provision of Ancillary Services; Accounting and Financial Reporting for New Electric Storage Technologies, 2011 August 19
    • AD10-12-003
      Competitive Markets for Imbalances, Not Penalties, Comments for Staff Technical Conference on Increasing Real-Time and Day-Ahead Market Efficiency through Improved Software
    • Comments in AD14-3
      On Interface Pricing, Not Interface Scheduling--FERC investigation of MISO/PJM Interface
    • RM04-7:Reactive Power
      A formulary market should be used for reactive power instead of cost based rate schedules
    • AD09-4 Renewable Resources
      On the need to pay for virtual storage and transmission instead of forcing renewable resources to provide their own
    • AD09-10, Demand Response, “TRUST BUT VERIFY AND THEN CASH-OUT”
      The nuclear disarmament plan at the end of the cold war resulted in the mantra, “Trust but Verify.” To get Demand Response to work better, the industry needs to develop a related mantra, such as Trust, Verify, and Cash-Out Imbalances.
  • NRRI Magazines
  • IEEE Presentations & Papers
  • Wind Farms
    • When Wind Hurts The Carbon Mitigation Program
      Wind power has a varying effect on the displacement of CO2 production. On 2011 April 4, wind power in Ireland reduced CO2 production at a rate of about 250 KG/MWH between 4:00 AM and 6:30 AM and at a rate of between 700 KG/MWH and 800 KG/MWH during the daylight hours. On a weighted average basis, wind that day displaced 599 KG/MWH.
    • Renewable Electric Power—Too Much of a Good Thing: Looking At ERCOT
      The growth in wind power has sometimes created surpluses on the electric system. Though the surplus is due to the growth of wind, all must share the effect, with the price for electricity dropping precipitously. In Texas the price has dropped below zero for many time periods. More needs to be done. August 2009 issue of Dialogue, by the US Association for Energy Economics
    • Pricing Intermittency--Filed in RM05-25
      This paper was based on a NERC finding by its Joint Inadvertent Interchange Task Force that frequency drives the value of reliability in regard to unscheduled flows of electricity.
    • Pricing Unexpected Ramping
      Second by second data from Kodiak, Alaska, shows the variability of wind. A punitive measure for pricing generator variability is presented which can lead to a non-punitive measure when system frequency information is used.
    • Wind in Alberta
      Can there be too much of a good thing? In Alberta, Canada, wind power has become significant enough that the wind depresses the price on the grid greatly when wind power peaks.
    • "WOLF Pricing for ACE Sharing"
      "Creating an Intra-Hour Market on Bonneville Power Authority As Part of the Wind Integration Rate Case"
    • Intrahour Pricing
      Paper on how BPA could price power on an intra-hour basis.
  • Energy Central
    • Power Crisis: Revenue Accounting Needed An issue paper on the U.S. Northeastern Blackout, August 14, 2003
      As I read stories about the blackout, I am amazed that the engineers don’t have the same quality of data systems that the accountants have put together. Maybe the accountants deal with money all the time and can more easily justify the data acquisition and storage necessary to keep track of money. I guess money begets money. Maybe we can use that concept to lessen the extent of the next blackout, so that it is a whimper instead of a bang.
    • Creating a MicroGrid Market
      Creating a MicroGrid Market: Using a Frequency Driven Pricing Curve To Dispatch Load and Embedded Distributed Generation And To Charge and Pay for Participation
    • Net Metering
      Net metering rules result in utilities incurring operating costs that are in addition to the costs included in traditional tariffs, partly due to the time varying nature of such costs. Since net metering results in costs over and above those included in traditional tariffs, net metering intervals should be as small as practical. Further, since the additional costs are time varying, customers with the ability to deliver electricity to the utility should be billed using prices that vary with the loading on the distribution grid, including reactive power flows.
    • Dynamic
      The growth in Solar PV is constraining the operation of the distribution grid and re-allocating its cost burden. Dynamic pricing of the distribution grid can improve equity and utility control of the situation.
  • Conference Papers
  • Public Utilities Fortnightly
    • Curing the Death Spiral
      Residential customers with rooftop solar still need utility wires for backup. A commodity only tariff, ubiquitous in the U.S., does not collect enough to pay for such connections. A demand charge included in the tariff will improve the equity with which utilities collect revenue from their residential customers, lessening the unintended subsidies for net metered rooftop solar, unintended subsidies that place higher costs on standard residential customers.
    • Tie Riding Freeloaders-PUF 1989
      "The True Impediment to Transmission Access" is that there is not a pricing mechanism in place for inadvertent interchange, loop flows, reactive power and other forms of unscheduled flows of electricity.
    • FERC's Mandatory Gas Auctions: Are We Bidding the Right Product?-PUF 1999
      When FERC wanted natural gas pipelines to auction available capacity, I said there should instead by a auction of unscheduled flows of natural gas.
    • Electricity Is Too Chunky-PUF 1998
      The Midwest power prices during Summer 1998 were neither too high nor too low. They were too imprecise
    • Saving California With Distributed Generation-2001
      A Crash Program To Use Small, Standby Diesel Generators To Keep The Lights On--The California Power Shortage of 2000/2001 Could Have Been Avoided With Appropriate Pricing to Incent the 30,000 MW of Small Generators to Operate in Parallel With the Grid
  • Storage
    • Buy Low, Sell High
      Intra-minute pricing plans will allow fast response storage systems to buy low and sell high just like participants in other commodity markets, indeed just as pumped hydro units now operate in advanced markets operated by ISOs.
  • Other Publications
    • “Dynamic Pricing: Using Smart Meters to Solve Electric Vehicles Related Distribution Overloads,” Metering International, Issue 3, 2010.
      The addition of Hybrid Electric Vehicles to the Smart Grid encourages Smart Pricing, including dynamic pricing of the use of the local wires and transformers serving the end user.
    • Lake Erie Doughnut--Loop Flows
      Control Areas should have a way to pay for the unscheduled flows they have with neighboring control areas, such that each are compensated for loop flow, inadvertent interchange, and reactive power. The Lake Erie doughnut creates major loop flow concerns in the Eastern United States and Canada.
    • Microgrids and financial affairs - creating a value-based real-time price for electricity, Cogneration & On-Site Power, 2007 November
      For microgrids to be financially viable, there must be a way for participants to pay each other as peers and for the microgrid to interact with any larger grid as a peer. The payment mechanism also needs to provide incentives for buyers and sellers to do the right thing.
    • DOE Sun Shot
      "Real Time Pricing of Distribution Wires," Comments of Mark B. Lively in Response to the U.S. DOE Request for Information in Regard to Net Benefits and Costs of Distributed Solar Energy and Innovative Solar Deployment Models: Real Time Pricing of Distribution Wires
    • DOE Solar Presentation
      Roof top solar systems generally need to be connected to a grid. The connection provides voltage stability to the consumer, an outlet for surplus energy, and a source of power when roof top solar systems are not providing enough power. The wires companies need sufficient revenue to support the cost of the wires, mostly the cost of owning the wires but also the cost of operation and maintenance. Distribution demand charges provide a way to the revenue stability.
  • Comments--Overseas Venues
    • India Blackout Economics
      The blackouts in India of 2012 July 30 and 31 indicate a failure of the economic systems in place for pricing unscheduled flows of electricity. The Indian system did not have locational prices to reflect N-1 contingencies, nor prices to encourage customer backup generators to assist the grid, nor ways for farmers to switch consumption to periods of lower vulnerabilities.
    • Pricing Mechanism To Facilitate Entry Into The FCAS Market
      The Office of the Tasmanian Economic Regulator (OTTER) has been investigating FCAS (Frequency Control Ancillary Service) and the market power that may be exerted by Hydro Tasmania, the largest provider of FCAS. These 2010 July 9 comments filed with OTTER describe how a formulary market for unscheduled flows of electricity can allow more parties to participate in FCAS, effectively reducing the barriers to entry for smaller participants.
    • Comments on UI Pricing
      Comments of Mark B. Lively, Utility Economic Engineer, On Explanatory Memorandum For Revision in Unscheduled Interchange Mechanism Produced by ABPS Infrastructure Advisory Private Limited
    • U.K. Frequency Analysis
      Gridwatch provides an archive of electricity data, archived with a periodicity of 5 minutes. The frequency data was analyzed, showing a stadard deviation of 57 mHz. Frequecy data were otherwise unremarkable except when costly oil units and simple cycle turbines were running at the same time, when average frequency was only 49.984 Hz. During these high cost periods, wind ran at only 1,198 MW versus 1,773 MW during all periods.
    • Comments on Reactive Power Market
      Comments of Mark Lively to the U.K. Office of Gas and Electricity Markets on the Feasibility of Creating a Market for Reactive Power
    • “Valuing Demand Response For Meeting Intermittencies,” submitted for IEEE Power & Energy Society General Meeting, Minneapolis, MN, 2010 July 25-29
      Utilities must match supply and demand on an instantaneous basis. Generally utilities do so by controlling supply. Sometimes utilities find controlling demand to be a better alternative. When the duration of interruption is less than the standard transaction periods, such as a clock hour, WOLF provides a short interval pricing mechanism that creates a formulary auction for unscheduled flows of electricity.
    • Forcing Reserves to Compete With a Physical Market--Draft of 2002 PUF article
      Reliability engineers have structured reserve programs to be noncompetitive. As structured, reserve programs are taxing mechanisms, providing a “Get out of jail free card.” Reserve programs need to be insurance programs with a physical market metric. As an insurance program, reserves would be forced to compete with the physical market. The physical market must include a cash out of delivery imbalances relative to scheduled deliveries. Such competition would reduce the market power that has been associated with existing reserve programs, such as revealed in the Enron “smoking gun” memos.
    • WVU seminar abstract--September 2010
      The electric system is facing a growth in intermittencies. We already have arc welders and arc furnaces as well as some wind and solar generation. Meeting the intermittent nature of these devices is expensive and the expense is going to increase. Jerking around generators causes generators to wear out sooner and reduces their efficiencies. Some studies even claim that the increased emissions associated with jerking fossil generators around are greater than the emission reductions claimed by intermittent wind resources. One reaction has been the suggestion that intermittent resources must be physically paired with storage systems. This seminar will discuss physical and financial approaches for addressing intermittencies, whether of loads or of generation.
    • Goldilocks Dilemma
      Is the price paid to dispatchable generation too high, too low, or just right for intermittent generation? Though intermittent generators often argue that they should receive the same price as dispatchable generation and some utilities argue that they should pay less to intermittent generators, sometimes intermittent generators should face a higher price than dispatchable generators, such as when intermittent generation is part of the market during instances of extreme shortage.