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CEO FORUM: Dealing with Disruption

Leaders adapt to strategic shifts in the utility landscape.

Fortnightly Magazine - June 2010

for a cleaner footprint. We get a decision that the commission and the public has had input into, and the PUC agrees that we should move forward.

 

Spence, PPL:  As a utility operating in Pennsylvania’s competitive market, we don’t have the obligation to build new power plants. Our affiliate, PPL Energy Supply, operates generation, and we have the obligation to make sure the supply is there, but we rely on competitive wholesale markets.

In the next three-to-five years, there’s no significant need for more supply. Between the renewable resources that are coming on line and the demand-response programs that are in place, mandated by the state and otherwise, I see plenty of supply to serve our customers’ demands in the next three to five years. Frankly, the price signals aren’t there to build new generation at this point, except plants that are subsidized, like solar and wind.

On the T&D side of the business, we’ve got a lot of planning efforts under way, working with various stakeholders in Pennsylvania. We have a $500 million transmission project going across North-Central Pennsylvania, hooking up with Public Service Electric & Gas on the New Jersey side. That’s been improved and is getting underway. We’ll be ramping up investments in both transmission and distribution in the next few years, probably doubling our T&D rate base in the next five or six years.

 

Boston, PJM:  We do a regional transmission expansion plan at least once a year, and sometimes more frequently at the request of states and FERC, to look at expanding the transmission system to meet the known variables—namely, inter-region load growth and generation that’s projected to come on line. The market itself delivers the resource mix, and it’s a fairly balanced portfolio.

The 1960s were all about coal. The 1970s and ’80s were more about nuclear, and the 1990s through about 1997 were about natural gas. Today, wind is the dominant player. More than half of the resources in our queue are wind power, and it dwarfs the other renewables in terms of new capacity. The largest renewable resource on our system, incidentally, is biomass, mostly waste wood.

 

Scalable Supply

Fortnightly: What do you view as the most important energy sources to develop over the next 10 years?

Ratcliffe, Southern Company:  In Georgia we’re attempting to build more natural gas-fired capacity, as well as some biomass conversion and a new nuclear plant. We made a commitment to building new next-gen nuclear units at Vogtle. We’re moving through the process of not just thinking about it but actually constructing those units. We spent significant money on excavation and other work that we can do under an early site permit. We expect the units to be operational in 2016 and 2017.

We need new nuclear technology to reduce the carbon footprint, as we know we have to do as a nation. Working with the Georgia Public Service Commission and the state legislature, we’ve made a huge commitment to nuclear technology, and that will pave the way for others to come behind us. The first

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