[BETA] Fortnightly

Notwithstanding some past difficulties, trash-fired power plants represent an increasingly attractive opportunity for future clean generation investment. Waste fuel offers a green source of baseload power that’s competitive with fossil fuels. The technology is proven and mature, and it enjoys public policy support. Additionally, waste fuel will help utilities meet diversity goals and environmental mandates.

(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.

Despite state efforts to follow the European model of state-mandated feed-in tariffs to promote renewable power, these actions won’t pass Constitutional muster. The Supremacy Clause makes a formidable legal barrier.

The potential for a federal renewable energy standard (RES) and carbon regulation, considered with the effect of state-imposed renewable energy standards, is fueling a strong, but challenging, market for renewable energy. Utilities are competing to sign up the best new projects, the types of renewable technologies available are increasing, and there are various government stimulus programs for energy; yet, the financial markets still are hesitant. Against this backdrop, how should contracts for power from new renewable resources be shaped so that those deals will look as good five, 10 and 15 years after execution as on the day the ink dries?

So far, states have taken the lead in carbon-control strategies. These state actions, however, could lead to constitutional conflicts—as recent court battles demonstrate. Only the U.S. Congress can regulate interstate trade, so states must step carefully in controlling carbon leakage.

Renewable Energy & Emissions Trading

The UK offers a model for renewable energy growth.

The United Kingdom stands at the forefront of renewable energy market development. The 2002 Renewables Obligation sets out a progressive strategy for achieving environmental protection, energy reliability and a competitive marketplace for industry and investment. The goals are ambitious: generating 10 percent of total UK electricity supply from renewable sources by 2010; 15.4 percent by 2015; and 20 percent by 2020.

Sound bites from state and federal regulators.

Contel Merger. California removes stay on Contel/GTE merger. Orders equal sharing of short- and long-term economic benefits between ratepayers and shareholders. Fessler dissents, finding that the utility "had not established an entitlement to 50 percent of these savings." A.90-09-043, Decision 96-04-053, Apr. 10, 1996 (Cal.P.S.C.).

Local Telephone Resale. California requires two of the state's major LECs to offer a broad range of services for resale at wholesale rates.