Maintaining a Balance: Innovation in Power System Balancing Authorities

Washington Journal of Environmental Law & Policy, Vol. 1 Issue 1 pp.1

July 2011

By Malcolm McLellan and Carol Opatrny

The introduction of new power generation, including intermittent resources, into the North American electric grid is exposing the fact that the traditional approach to resource integration is not necessarily cost-effective. At the forefront of analysis is the electric balancing authority; the functional structure that is responsible for maintaining the continuous balance of the demand for and supply of electric power. Electric balancing authorities perform this function according to standards developed by the North American Electric Reliability Corporation and the Federal Energy Regulatory Commission. These services can significantly affect the cost of power. Rather than blindly purchasing balancing services from the local balancing authority, power generators and loads are proactively affecting their cost structure by purchasing balancing services from an adjacent balancing authority or forming a separate balancing authority and self-supplying services. These options do not undermine reliability and the cost controls enabled by competition ensure efficient resource integration.