Fortnightly Magazine - May 2011

Capital Power acquires Bridgeport Energy plant; ReEnergy Holdings acquires cogeneration facilities; Dominion Resources raises capital through bond issue; Edison Mission Energy refinances debt and others.

FERC’s new rule on compensation for demand resources tips the market balance toward negawatts. Arguably the commission’s economic analysis is flawed, and the rule represents a covert policy decision that stretches federal authority. Nevertheless, economic benefits will result if DR programs are well implemented to avoid gaming the system and distorting the market.

Despite the variable nature of the resource, wind can be managed so that it will not impair the reliability of a utility system. The Federal Energy Regulatory Commission proposed a rule that would require changes to the way transmission service is scheduled, which would enhance the ability of balancing authorities to integrate wind.

Touted as the nation’s first-ever “offshore transmission highway,” the proposed Atlantic Wind Connection (AWC) high-voltage power line in theory could foster dozens of wind farms in shallow offshore costal waters up and down the mid-Atlantic seaboard — but only if federal regulators can get buy-in for new transmission planning rules that give precedence to large, macro projects aimed at boosting renewable energy. Otherwise, the grid project might never pass muster with the engineers charged with OK’ing new power lines, since the AWC is probably not needed to maintain reliability, and likely would not make electricity rates any cheaper for East Coast ratepayers. Should wind energy developers start with massive grid projects to attract clusters of wind turbines, or should the wind farms come first?