The Supreme Court of the United States recently affirmed the Federal Energy Regulatory Commission’s Order No. 745, on pricing for demand response (DR). At the core of the debate was the Commission’s decision to require wholesale markets to pay successful demand response bids the same Locational Marginal Price (LMP) paid to electricity generators. Professors William Hogan and the late Alfred Kahn, two giants among economists, squared off. Expert Witness Charles Cicchetti discusses the arguments made, how the Commission eventually found a way to solve the conceptual debate, and offers his thoughts on where we go from here.
Posts by Charles Cicchetti: