(April 2011) GE Hitachi and Lockheed Martin team up on nuclear reactor controls; Elster wins metering contract in New Hampshire; Xcel hires Bechtel for nuclear services in Minnesota; Mitsubishi builds transformer HQ in Memphis; Northeast Utilities taps Siemens for transmission projects; Iberdrola sells wind output to FirstEnergy; Consumers and DTE invest $400 million to upgrade pumped storage facility; plus contracts and announcements from Alstom, URS, Areva, groSolar, Pattern Energy, S&C Electric and others.
Where tax rates are too high, grid investments suffer.
As the industry works to modernize the national T&D infrastructure, utilities are investing dollars that ultimately increase their cost of service—and therefore end-use prices. To cover their investments, many companies are taking a close look at their tax-management policies.
Why the green grid might do better without open access.
Are the Feds at war with green power development? You might have thought so, if you had sat through the conference held March 15, 2011, at the Federal Energy Regulatory Commission, where the consensus seemed to be that FERC’s policy of granting open-access rights on electric transmission lines is problematic for green power projects. In short, when wind and solar developers choose to build their own local tie lines to link their projects to the larger grid, FERC policy forces them to make extra line capacity available to rival developers. That requirement doomed the novel Wind Spirit Project, and continues to complicate the job of project financing.
A proposal for utility regulatory and industry reform.
With America’s balkanized and under-staffed regulatory construct, utility companies are left struggling to achieve true scale economies or make real progress toward achieving national energy goals. This retired IOU executive says it’s time to redesign—and strengthen—the regulatory framework.
Why reserve margins aren’t just about keeping the lights on.
Kevin Carden, Johannes Pfeifenberger, and Nick Wintermantel
While it’s theoretically possible to keep the lights on with a much smaller reserve than the U.S. utility industry historically has maintained, the costs of doing so might be higher than some analyses suggest. As demand response plays a growing role on the grid—and as system planners reconsider reserve margins and reliability standards—quantitative risk analysis will guide resource adequacy decisions.
Renewables are greenest when displacing coal, not gas.
With the abandonment of a nationwide energy policy by the previous Congress, states continue leading carbon mitigation efforts. Indeed, existing state policies and renewable portfolio standards (RPS) are already having a significant impact on the U.S. generation portfolio. FERC now proposes to weigh state policy as a consideration in transmission filings. Should state policies guide federal action? Will they suffice to reduce carbon emissions?
New transparency practice turns confidentiality on its head.
The Federal Energy Regulatory Commission (FERC) recently authorized its Office of Enforcement to begin revealing publicly the names of subjects under investigation, as well as summaries of allegations against them, earlier than the commission ever had before. In fact, FERC now may disclose allegations before finding any wrongdoing. This new practice raises the specter of damaging reputations without following what normally would be considered due process.
Past accomplishments and future plans.
Policy makers in the E.U. and the United States are taking different approaches to facilitating smart grid development. While both regions are setting standards that the rest of the world likely will follow, they also face difficult challenges in resolving issues around cost recovery, customer engagement and workforce preparedness.
Raising the stakes in RTO markets.
Generators and demand-response providers are reaping rewards in forward capacity auctions, causing suppliers to go shopping for the most lucrative markets. Now the Midwest ISO is trying to catch up, by proposing its own auction for years-ahead resource bids. But does RTO shopping serve the interests of customers, who are legally entitled to rates that are just and reasonable? Why are some state policy makers advocating a return to old-school RFPs for long-term contracts?
Solar and wind developers learn to shift project risk to the grid.
As Google says, “the wind cries for transmission.” But the opposite is true as well: without new wind and solar energy projects, we would not need to build so many new transmission lines. Each side needs the other, yet neither dares declare too soon, and risk weakening its bargaining position. That is, until one utility in California found a way to break the impasse, with each side scratching the other’s back — thus putting to rest the age-old question, “Which came first, the . . . ?”