Can Grid Be Designed by Democracy? - The Political Complexity of Regional Electricity Policy Formation
Open Access
- Author:
- Yoo, Kyungjin
- Graduate Program:
- Energy and Mineral Engineering
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- March 15, 2019
- Committee Members:
- Seth Adam Blumsack, Dissertation Advisor/Co-Advisor
Seth Adam Blumsack, Committee Chair/Co-Chair
Joel Reid Landry, Committee Member
Jennifer E Baka, Committee Member
Darrell Velegol, Outside Member - Keywords:
- Regional Transmission Organization
Stakeholder process
Decision-making
Political power - Abstract:
- Regional Transmission Organizations are tasked with a primary goal of providing non-discriminatory access to transmission, ensuring grid reliability (Federal Energy Regulatory Commission 1996, 1999) and facilitating the integration of new technologies and market participants, including renewable power generation, energy storage, and demand response. Given the clear necessity of power grid operators to develop planning and operational rules to handle the increased penetration of renewable energy and/or other technologies in the electric power system, the environment in which rules and policies are made is important because market rules have a critical impact on the value of technology (Paine et al. 2014). The process of integrating new technology is not simply a problem of engineering and technology but is a complex socio-technical process (Johnson et al. 2015; Lenhart et al. 2016; Paine et al. 2014; Stafford and Wilson 2016; Welton 2018). Although questions have been raised about the outcomes of such stakeholder-driven decision processes, the analysis of how regional power grid operators make decisions has emerged only recently. My overall research agenda is in continuation of the existing literature although its approach is more quantitative which involves modeling and providing mathematical evidence. Also, the analysis focuses on a specific topic of the RTO governance—voting rules—which has never been analyzed in a systematic way. I capture how the decision rules of highly participatory processes affect the performance of physical networks and systems by modeling voters’ decision behavior, analyze complex voting networks of policy-making processes, and develop tools to evaluate socio-technical systems more holistically. The contributions of my work are: • As the first attempt to model RTO decision-making process, I argue that we can systematically model the stakeholder process to understand the process itself and further to predict the voting outcome. • By identifying pivotal voters, this study provides an explanation of recent failures to pass proposals through the existing stakeholder process as well as insights of voting power dynamics among stakeholders. • Novel approach using network science to analyze the voting network of the PJM’s top-level committee, this thesis provides scientific evidence on the voting power distribution in the decision processes of RTOs. • By connecting different voting rules and market outcomes, this thesis proves the importance of RTO governance and urges further development in RTO governance study. • Ultimately, I hope that this research would yield a better understanding of diverse interests of stakeholders in RTOs and consequently on how RTOs ought to collect stakeholders’ opinion and to make decisions on behalf of the people In the second chapter, I develop a predictive model of voting outcome especially focusing on one of the 28 voting issues, the capacity market review. After comparing predicted outcomes and actual voting records, I quantify the political power of the critical voters which plays a critical role in settlement of voting outcomes. The analysis suggests two findings: first, due to coalition formation, there may be limits to the stakeholder-driven decision model causing frequent deadlock for contentious issues; second, divisive issues like capacity markets can shift political power in ways that, for certain circumstances, a few voters—or as defined in this study, swing voters, who are primarily financial players—can sway a voting outcome. In a study of the voting network of the PJM stakeholders in the third chapter, I empirically proved the existence of a strong consumer-side coalition, using community detection method, and identified swing voters, using network measures, who can be pivotal in ensuring the passage or failure of highly contentious rule changes. The fourth chapter shows that governance of RTO is not just an administrative or supportive system but has a measurable impact on the electricity markets. I explore various voting rules that could be applied to the PJM MC and analyze whether changes in voting rules influence market outcomes. Most importantly, this study provides evidence that voting rule has an impact on market outcomes which would affect two-thirds of the U.S. electricity consumption. The results show that a slight change in the passage threshold makes a difference in voting outcome and so in the market outcome. Even though the difference might look small, considering that this study accounts only one issue that has a time horizon for a year and that there are numerous other tariffs or market rule related issues, the impact of RTO governance is not negligible. This study also provides a good background to a comparative analysis across RTOs. Although I do not directly address the difference in governance structures across RTOs and its consequences—except a comparison with PJM and NYISO—the result that shows changes in voting outcomes under different voting rules is sufficient to further develop research what these differences mean. I am not arguing that RTO governing rules have to be the same across different RTOs. All RTOs have developed their own rules over time based on countless debate and discussion that reflect distinct regional characteristics. However, there are few studies on comparing rule differences even though it could make a non-negligible impact on the markets.