DC Energy advocates for policies common to well-functioning markets. When structured appropriately, markets are a powerful force for delivering a host of consumer benefits, including appropriate pricing and optimal infrastructure investments. Across all of our efforts, DC Energy’s policy focus falls primarily on three key aspects of market policy:
Competition: Competition is critical to any market. DC Energy promotes policies intended to increase competition by leveling the playing field across all participants so that innovation and superior capabilities can prevail over status quo and legacy.
Demand Response: A market works best when all of the customers, as well as all of the suppliers, can freely buy and sell. End-use and wholesale customers should have the liberty to buy and consume power at the price and time they find attractive. Without end-use customers responding to real-time market prices demand is distorted and innovation stifled. Among all the environmentally-responsible options available, demand response should have the highest priority.
Transparent and Open Markets: Open and transparent markets are critical in fostering the robust financial participation that supports appropriate pricing and ultimately drives efficient capital allocation into infrastructure investments. DC Energy promotes policies that increase market transparency and engender confidence among participants.
In our view, the Independent System Operators and FERC have established an exemplary competitive wholesale market structure that is beneficial to the consumer and end-users. This market structure creates locational marginal prices (LMP) across geographic nodes in the grid and encourages competition at each of these locations. Across these markets over 1,000 suppliers compete to serve the customer. Customers in over 60% of the US benefit from these competitively-driven markets. Through our involvement with regulators, we have helped to further enhance competition and transparency in these markets by refining credit policies, expanding geographic coverage for well-converged markets, and developing long-term and more granular market products.
References.
In 2020, PJM, the largest Regional Transmission Operator (RTO) in the United States, commissioned London Economics International, a consulting firm, to conduct an independent assessment of the Financial Transmission Rights (FTR) market in PJM (see links below). Their report highlights the overwhelming benefits of markets and the importance of financial participants like DC Energy.
The New York Independent System Operator (NYISO), commissioned William Hogan and Scott Harvey, two longstanding leading thinkers in electricity market design, to provide an assessment, a historical perspective and a future outlook of Locational Marginal Pricing (LMP) market design relative to other market constructs (see link below). Their 2022 report highlights how the LMP markets provide the most efficient price signals to incentivize optimal use and development of the bulk electric system as it relates to generation, transmission, demand response and storage.
The Midcontinent Independent System Operator (MISO) commissioned London Economics International to conduct an independent assessment of the Financial Transmission Rights (FTR) market in MISO (see link below). Their 2023 report highlights the benefits of FTR markets and the importance of financial participants.