Regional transmission organizations (RTOs) or independent system operators (ISOs) dominate the major power grids of North America, with the notable exceptions of the Southeast and Pacific Northwest. The purpose of this article is not to criticize system reliability but to highlight the more pervasive challenge today and for the future: Controlling the cost impact of decisions by grid operators on energy market participants.
Lessons from the EU Emissions Trading Scheme emerge after two years.
Despite assertions to the contrary, the European Union Emissions Trading Scheme is working. Industry has changed both short-term behavior and longer-term plans to reduce compliance costs—the driving down of greenhouse-gas emissions being the intended and achieved result. In this article, we review examples of the ETS affecting both planned and actual behavior. The other side of the coin is how regulatory and political uncertainty undermines this.
Part two of our series shows how utility companies can manage, but never eliminate, strategic risk.
Dr. David L. Bodde
The consequences of a flawed strategic choice unfold slowly, but they carry great weight. Consider IBM, which in 1980 chose to outsource to Intel the 16-bit processor needed for its entry into the personal computer market. The Intel chip, however, could not use the operating system that IBM had designed for its older 8-bit processors. And so the company had to outsource the operating system as well as the chip—to a startup company called Microsoft.
FERC races to impose NERC’s new rules, raising howls of protest in the process.
Bruce W. Radford
After pleading with Congress for so many years, and then at last winning the requisite legislative authority to impose mandatory and enforceable standards for electric reliability, to replace its legacy system of voluntary compliance, NERC finds itself at a curious juncture. It wants to slow the transition.
The intelligent-grid vision is becoming clearer as utilities take incremental steps toward a brighter future.
Michael T. Burr
Building the intelligent grid will require less technical innovation than it does strategic innovation—a characteristic not typically ascribed to U.S. regulated utilities. But the utility culture is changing—by necessity, if not by choice.
Can the upward swing in global power infrastructure investment be sustained?
Daniel I. Blanchard
The current recovery in global power-sector investment is being driven not only by rising demand for power, but also by the huge levels of liquidity in global financial markets. How long will the current up-cycle last?
The era of polemics about electric competition is nearly over. It’s time to compare the relative performance of competition and traditional regulation as these two established models operate side-by-side.
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