Energy Policy & Market Analysis Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Energy Policy & Market Analysis flashcards as text
Under the Public Utility Regulatory Policies Act (PURPA), utilities are required to purchase power from qualifying facilities (QFs) at what rate?
Answer: The utility's avoided cost
PURPA requires utilities to purchase QF power at the utility's avoided cost — the cost the utility would have incurred to generate or purchase that power elsewhere.
Which market structure characterizes most U.S. electricity markets operated by regional transmission organizations (RTOs)?
Answer: Nodal locational marginal pricing (LMP)
RTOs use nodal LMP, which sets prices at each bus in the transmission network based on local supply, demand, and congestion.
The Social Cost of Carbon (SCC) is used in federal rulemaking primarily to:
Answer: Quantify climate damages for cost-benefit analyses of regulations
The SCC monetizes the long-term economic damages from emitting one additional ton of CO₂, enabling agencies to weigh climate impacts in regulatory cost-benefit analyses.
In a capacity market, such as PJM's Reliability Pricing Model (RPM), what does a generator sell?
Answer: A commitment to be available to generate power during peak periods
Capacity markets compensate generators for their commitment to be available, ensuring adequate reserves to meet peak demand even if energy sales alone are insufficient.
Which federal agency oversees wholesale electricity markets and interstate natural gas pipelines in the United States?
Answer: Federal Energy Regulatory Commission (FERC)
FERC regulates wholesale electricity sales, transmission access, and interstate natural gas and oil pipeline rates under the Federal Power Act and Natural Gas Act.
A renewable portfolio standard (RPS) policy requires:
Answer: Utilities to procure a minimum share of electricity from renewable sources
An RPS mandates that a specified percentage of a utility's retail electricity sales come from eligible renewable energy sources by a target date.
Price elasticity of demand for electricity in the short run is typically described as:
Answer: Relatively inelastic, because few immediate substitutes exist
Short-run electricity demand is relatively inelastic because most end uses lack immediate substitutes and equipment changes take time, so consumption responds little to price changes.