Energy and Capacity Markets

Synapse analyzes the design, operation, theory, and outcomes of wholesale electricity markets and resource adequacy constructs in the U.S. electric sector. Our team provided technical support to stakeholders in the settlement discussions that created forward capacity markets in both New England and PJM; and we are currently engaged in the ongoing Long Term Procurement Plan proceeding affecting the three largest investor-owned utilities in California. Several of our personnel have been engaged in the key debates over electric-sector market design for more than 25 years.

Wholesale Electricity Markets, ISOs, and RTOs

Synapse helps our clients remain informed and participate effectively in Independent System Operator (ISO) and Regional Transmission Organization (RTO) proceedings, rulemakings, and operations.  Our services include:

  • Representing state consumer advocates, renewable generators, and merchant energy efficiency providers in ISO New England and NEPOOL matters
  • Participating in the processes to refine wholesale market designs and resource adequacy constructs in PJM, New England, California, and Texas
  • Assisting consumer advocates and market participants in analyzing, understanding, and participating in complex electricity and electricity-related markets
  • Assessing “non-transmission alternatives” in regional planning processes, including resource alternatives such as energy efficiency, demand response, and distributed generation
  • Supporting the participation of merchant energy efficiency programs and demand response providers in wholesale markets through market rulemaking proceedings
  • Assessing the overall costs and benefits of ISO and RTO structures

Synapse’s participation in New England’s conversion to an RTO structure led to the creation of the Alternative Resources Sector, a voting block within NEPOOL that is populated by renewable generators, distributed generation, demand response, and merchant energy efficiency providers. Synapse Principal Associate Doug Hurley served five years as the Vice Chair of the Alternative Resources Sector at NEPOOL.

Price Forecasting and Market Analysis

Price forecasting plays a crucial role in planning and project development in the electricity markets, as well as in asset valuation, contract dispute resolution, and projecting the impact of proposed market regulations and infrastructure investments. Synapse’s work in this area stands out due to our attention to market fundamentals, our in-depth treatment of regulatory trends—including our treatment of carbon dioxide and other emissions costs—and our ability to apply the most appropriate forecasting tools for any given project. Our services include:

  • Producing electricity price forecasts in support of long-range planning exercises
  • Producing long-range avoided cost forecasts for evaluating energy efficiency programs
  • Performing detailed scenario analysis on electric energy and capacity markets, including transmission constraints, cost-based or strategic bidding, and analysis of proposed regulations
  • Reviewing price projections for regional electricity markets to evaluate utilities’ stranded cost estimates, project future electricity generation costs, evaluate demand-side management investments, and assess the rate impact of renewable portfolio and energy efficiency standards

Generating Asset Valuation

Determining the value of generating assets and power contracts is an important aspect of property tax assessment, evaluation of asset transactions, and utility ratemaking (including stranded cost rate treatment). Our asset valuation work often includes simulation modeling and market price forecasting. Our services in this area include:

  • Identifying and quantifying all projected sources of revenue and cost
  • Determining the value of generating assets and purchased power contracts
  • Estimating the magnitude of stranded costs
  • Developing analysis and recommendations with respect to the appropriate regulatory treatment of stranded costs and gains

Market Power and Mergers

Synapse analyzes market power in the context of wholesale electricity market restructuring, energy company mergers, and antitrust investigations. Our team of experts conducts quantitative studies using models such as PROSYM. We also review market power analyses filed by others, and we assist clients with negotiations involving market power monitoring and mitigation procedures.