Customers deserve the straight truth about electricity costs.
Michael T. Burr, Editor-in-Chief
The utility industry faces the difficult task of trying to educate the general public about the realities of delivering electricity service in the 21st century. California’s recent experience trying to put smart thermostats into the state’s building code provides a cautionary example.
When Patrick Moore left Greenpeace—the environmental advocacy group that he helped to create in the early 1970s—some activists labeled him a traitor and a corporate shill. It didn’t stop him, however, from becoming one of the environmental community’s most outspoken advocates for nuclear power development—and one of the harshest critics of anti-nuclear activists. Fortnightly caught up with Moore in February to discuss the state of anti-nuclear advocacy in America.
Southern Company named Ronnie Labrato vice president, internal auditing. FirstEnergy’s board of directors elected Gary R. Leidich executive vice president and president of FirstEnergy Generation, and Richard R. Grigg executive vice president and president of FirstEnergy Utilities. Exelon named Ian P. McLean to lead its finance and markets organization. And others...
Taming the Wind is a pleasure to read. The article captures just about perfectly the value of forecasting in cost-effectively and reliably integrating wind power, of balancing in large markets, of geographical spread, and more. It also looks at what the future could hold.
Accounting reforms might force regulators to abandon their live-now, pay-later practices.
When an advisory committee of the SEC voted recently to phase out special accounting treatment for various industries, it signaled the end may be near for power plant depreciation deferral mechanisms. Such mechanisms are a mainstay of regulatory accounting in many states, and their discontinuation could send plant owners and regulators back to the drawing board to find a new, GAAP-compliant way to recognize asset depreciation in financial reports.
Volatile markets are causing delays, but most deals are moving forward.
Although problems in the power business grabbed the headlines early this decade, the industry now seems fundamentally strong. In contrast to their ratings of banks, rating agencies appear to have recently upgraded more of the electric sector than they have downgraded. It remains a strong investment grade, usually BB or BBB. For an index of 68 electric utilities, the debt-to-equity ratio averaged only 55:45 and return on equity exceeded over 13 percent through January.
Enforcement trends call for a proactive approach to complying with market rules.
Federal regulators have penalized wholesale energy market participants with fines ranging from $300 thousand to $300 million over the past two years. The magnitude of the penalties, along with uncertainty over how to effectively mitigate the risk of any civil action by regulators, has raised concern about how companies are approaching their regulatory obligations.
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