[BETA] Fortnightly

Technology is quickly making energy storage more economical and effective than ever before. But companies that wish to invest in storage capacity face a journey through a frustrating regulatory no-man’s land. Opening the gateway for storage to deliver smart grid benefits will require a more streamlined and coherent approach to regulating storage as utility infrastructure.

Where wind integration has been most successful, state authorities developed and adopted basic transmission planning and cost allocation principles before FERC issued Order 1000. Experiences in Texas, California, and Hawaii demonstrate what it takes to overcome permitting and cost allocation barriers—namely, a coherent policy framework and close coordination among stakeholders.

The energy industry has known for decades that federal regulators eventually would set rules under the Clean Air Act to govern emissions of mercury and other air toxics from coal-fired power plants. However, with the U.S. Environmental Protection Agency now having issued a final mercury rule, along with guidelines for possible extensions of the compliance deadline, utilities and power plant owners finally have a clear idea what they are up against. And the outlook isn't pretty. The challenge is to retrofit many hundreds of generating plants across the country--and all on the same three-year compliance schedule. Yet two wildcards remain in play: what deference the EPA will give to electric reliability needs, as it "consults" with the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Council; and how effective FERC Chairman Jon Wellinghoff will be as Republican leadership in Congress works to derail the new rules.

Price-Responsive demand, EPA regulations, and merger policy will be on the agenda for the coming year as the Federal Energy Regulatory Commission works its way through the list of key cases that were pending at FERC as of January 2011.

Amid focused attention on cybersecurity for T&D networks and power plants, one critical system is often overlooked: land-based radios. During an emergency, field crews rely on their ability to communicate with radios, making these systems highly vulnerable targets for malicious attackers. Securing them requires robust technologies and tools, as well as training and practices to ensure their availability when the grid goes down.

The electric power system has been getting smarter for decades, as new technologies allow better analysis and greater control. But most utilities have implemented these technologies in a piecemeal way, rather than as part of a long-term, enterprise-scale strategy. What are the consequences of this fragmented and incidental approach, and what would happen if we developed the smart grid in a deliberate way instead?

Engineering, procurement and construction (EPC) contracts are evolving as utilities seek to spread risks, contain costs, and execute their business strategies. As a result, turnkey contractors are adapting their capabilities to meet the industry’s changing needs. Leading EPC firms share their vision for a 21st century energy industry—and their role in building it.

(December 2011) Iberdrola USA names new vice presidents; Michigan Governor appoints new commission chair; AGA and INGAA name new chief executives; plus senior staff changes at American Electric Power, Dynegy, GDF SUEZ, and others.

Despite the industry’s cautious and inconsistent approach, the smart grid is becoming a reality. Projects and pilots have provided valuable experience about what works and what doesn’t. Recent survey results illustrate the lessons utilities have learned—and how they’re changing their strategies.

New technologies—and new expectations—require taking a fresh look at the institutions and practices that have provided reliable electricity for the past century. Collective action is needed to define the key attributes of a future grid and then to take the more difficult next step—adapting our processes and institutions to align with that future vision. A thoughtful approach will allow America to capture the potential value that’s offered by sweeping changes in technologies and policies.