Energy Market Fundamentals Flashcards
7 cards from real CEP 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 Market Fundamentals flashcards as text
Which body has primary federal jurisdiction over wholesale electricity markets in the United States?
Answer: The Federal Energy Regulatory Commission (FERC)
FERC regulates wholesale electricity rates, transmission access, and natural gas pipelines under the Federal Power Act and Natural Gas Act.
What is a 'capacity market' designed to do in restructured electricity markets?
Answer: Ensure sufficient generation resources exist to meet future peak demand
Capacity markets compensate generators for being available during peak periods, ensuring resource adequacy even when energy market prices alone don't incentivize enough investment.
A natural gas 'citygate' price represents:
Answer: The price at which gas is delivered from a pipeline to a local distribution company
The citygate is the transfer point between interstate pipelines and local distribution companies, and its price includes transport costs from production areas.
What risk does a fixed-price energy contract primarily eliminate for the buyer?
Answer: Price volatility over the contract term
Fixed-price contracts lock in a known cost, removing exposure to market price fluctuations for the duration of the agreement.
In natural gas markets, 'peaking storage' facilities are characterized by:
Answer: Smaller capacity but very high deliverability for short-duration peak events
Peaking storage (typically LNG or salt cavern facilities) trades volume capacity for high withdrawal rates needed to meet sudden demand spikes.
Which of the following is an example of a 'behind-the-meter' energy resource?
Answer: A rooftop solar installation on a commercial building
Behind-the-meter resources are located on the customer's side of the utility meter and directly reduce the customer's net electricity consumption.
What is the main purpose of a Renewable Energy Certificate (REC)?
Answer: To track and transfer the environmental attributes of one megawatt-hour of renewable generation
RECs (also called SRECs or GOs) represent the non-energy attributes of renewable generation and can be sold separately from the underlying electricity.