High reserve margins and blackout risk are part of the extended forecast.
The Western Electricity Coordinating Council continues to experience a glut of generation and historically high levels of generating reserve margins. Despite these reserve margins, state and federal regulators are asserting that all is not well, and that rolling blackouts may return.
Jay Morrison, Senior Regulatory Counsel, National Rural Electric Cooperative Association: I was disappointed to see that two different articles in the October 2005 issue erroneously stated that the Electricity Modernization Act requires net metering.
Regional committees may improve collaboration between federal and state regulators.
Sandra L. Hochstetter
Layered on top of ever-evolving industry restructuring and corresponding FERC rulemakings, we have the provisions of the Energy Policy Act of 2005. When viewed in totality, the new energy legislation provides the federal government with substantial new authority over generation and transmission that can, and might well be, used to alter the outcome of what a state would have decided under its previously exclusive jurisdictional domain. Whether we can avoid unhappy and rancorous confrontations with the use of joint boards, regional compacts, or regional state committees is yet to be seen, but it is my sincere hope that we can do so.
How to prepare for killer capital costs on future power-plant builds.
Mark Twain once wrote: “A banker is a fellow who lends you his umbrella when the sun is shining and wants it back when it starts to rain.” If utility finance executives aren’t careful, they might find themselves caught in the rain without an umbrella.
If transmission can substitute for gen-plant capacity, why not clear both products in the same auction?
Bruce W. Radford
PJM applied to FERC for authority to impose a new regime of requirements for reserves of electric generating capacity. This new construct, known as the reliability pricing model (RPM), would replace PJM’s current capacity market.
The battle for the future of coal-fired power is heating up. Recent developments give IGCC a fighting chance.
Michael T. Burr
Does the future belong to pulverized coal or integrated gasification combined-cycle technologies? The answer will determine how the industry manages load growth and regulatory risks, while protecting shareholders and ratepayers.
Jonathan A. Lesser, Ph.D. and Guillermo Israilevich, Ph.D.
Capacity and energy, although related, are not identical products. If we are to continue to rely on competitive market forces to provide new generation supplies, we need separate, long-term, installed capacity markets.
The Energy Policy Act of 2005 ducks three crucial issues: volatile prices and fuel supplies; insufficient, erratic capital investment in generation and transmission; and energy commodity pricing. What should policymakers do now?
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