Fortnightly Magazine - February 2008

PURPA Redirected

The latest ‘incremental’ policy changes might realign utility financial incentives.

Back in 1978, Congress passed an energy bill, the National Energy Act, including an obscure provision that seemed like an incremental tweak to U.S. energy policy. But eventually, that incremental tweak—the Public Utility Regulatory Policies Act (PURPA)—smashed through the gates of the vertically integrated utility construct. PURPA introduced competition into wholesale power markets in a way that fundamentally changed the U.S. utility industry.

Byline: 

Michael T. Burr, Editor-in-Chief

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People

The Interstate Natural Gas Association named Richard R. Hoffmann executive director of the The INGAA Foundation. E. Kevin Bethel joined Sierra Pacific Resources as chief accounting officer. Dominion East Ohio promoted Bruce C. Klink to president. American Electric Power announced several changes. And others...

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Financing New Nukes

Federal loan guarantees raise hopes for new reactors planned by affiliates of Constellation and NRG.

Federal loan guarantees have been unleashed to support new nuclear plant construction. Will this be the watershed event that finally gets nuclear moving forward in the United States?

Byline: 

Scott M. Gawlicki

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Ring Fencing In Utah

Regulatory structures protect ratepayers in geography-spanning utility mergers.

Electric utility executives generally view corporate restructuring as a potential source of economic value and a potential partial solution to financial problems that reflect changing business risks. On the other hand, regulatory commissioners attempt to insulate and regulate the utility component of the restructured energy business and to protect the public interest, including reliability of service at reasonable costs.

Byline: 

Charles E. Peterson and J. Robert Malko

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Nuclear Fuel Future

Nuclear power cost projections should incorporate fuel cost uncertainties.

Nuclear fuel cost projections typically consist of current reported costs that are escalated at the rate of inflation. These projections usually consist of a single estimate in each year. In the past, when nuclear fuel costs were low and declining, this approach was acceptable and may have even been conservative. But this approach is likely to understate projected nuclear fuel cost when nuclear fuel costs are increasing.

Byline: 

Edward Kee

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Coal: Inconvenient Truths

The current coal bust might lead to a future boom.

Coal is taking a beating. As mining costs rise, coal reserves deplete, emission regulations strengthen, and inter-fuel competitive dynamics change, the allocation of coal in the electric generation industry is certain to see substantial changes. The uncertainties over CO2 regulations and emissions standards are having a chilling impact on both proposed and current coal investment.

Byline: 

Gary L. Hunt and Hans Daniels

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Taming the Wind

Modern approaches to system operations and forecasting make the most of variable energy sources.

Nobody disputes windpower’s variability; that’s a given. But modern approaches to demand management, grid integration and wind forecasting are making windpower more predictable and grid friendly. And technology companies are marketing a variety of equipment and services to support a growing base of variable wind capacity—sort of like a virtual Country Kitchen Buffet for the windpower picnic.

Byline: 

Michael T. Burr

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Post-Holiday Blues

Alliant’s 11th-hour deal to sell $783 million in transmission wires faces ex-post legal challenge

(February 2008) Alliant subsidiary Interstate Power & Light (IP&L) completed a $783 million deal to sell 6,800 miles of electric transmission assets to an affiliate of ITC Holdings Corp. The same day, Alliant issued guidance saying its 2008 earnings likely would increase by between 3 and 13 cents a share, driven partly by proceeds from the IP&L asset sale.

Byline: 

Michael T. Burr

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The Big Build

Utility infrastructure projects face high costs, labor shortages and global competition for resources.

A huge backlog exists for utility infrastructure projects. Major players in the construction industry—ABB, Black & Veatch, Siemens, The Shaw Group and WorleyParsons—discuss the trends, both good and bad, and how they are getting the job done on badly needed projects.

Byline: 

Lori A. Burkhart

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GHG Compliance Complexities

Greenhouse-gas regulation will impose vastly greater compliance difficulties than did the Acid Rain program.

Greenhouse gas (GHG) regulation picks up where Acid Rain legislation left off, but affects far more sources and pollutants. Utility compliance programs face major uncertainties.

Byline: 

John A. Bewick

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