THE CEO POWER FORUM

Not all utility CEOs are created equal...We take this to be self-evident after the bankruptcies, ratings downgrades, balance-sheet blowups, and financial debacles that took place in the industry in the last five years.

Those utility CEOs that kept the corporate ship sailing smoothly, growing their companies right through those turbulent times also evidenced this premise.

Business & Money

A review of the ongoing evolution of market design.

LICAP, ICAP, UCAP, NoCAP. Some markets have them, some don't. Where they do exist, no two are equal.

Solving the electricity credit malaise.

"TCE, a [qualified scheduling entity] QSE in the ERCOT region, filed for bankruptcy protection in March 2003 … the outstanding principal amount owed to market participants at Jan. 1, 2005 is $13,692,188.37. … ERCOT intends to begin the process of uplifting to QSEs representing LSEs the principal amount remaining on TCE's payment obligation to ERCOT. … On Jan. 18, 2005, ERCOT will send invoices totaling $2.5 million to QSEs representing LSEs.

THE EPA SPEAKS OUT:

The Environmental Protection Agency reviews how the multi-pollutant control concept is to work.

People

New Opportunities:

The California Independent System Operator board of governors hired Yakout Mansour, a 30-year veteran of western grid operations, to be its president and CEO.

EUROPE

Several hurdles remain to further liberalization and full competition in the electricity sector.

Two major trends can be observed in Europe's electricity sector. First, the increasing importance of private-sector participation in a sector that was traditionally viewed as belonging to the state.

AN EXPENSIVE EXPERIMENT?

Dollars and Sense

Financial data raises doubts about whether deregulation benefits outweigh costs.

This year, U.S. electricity consumers will spend more than $1 billion financing the operation of six regional transmission organizations (RTOs).¹ RTO costs have nearly doubled since 2001 and now outweigh nearly all of the benefits anticipated by the national cost-benefit studies.

Perspective

How the filed-rate policy wreaks havoc- and what courts can do about it.

Like many venerable legal rules, the filed-rate doctrine is rarely questioned. Over the last century, it has served many important purposes. However, with deregulated wholesale electric power markets at the federal level and various degrees of deregulation across the states, both the doctrine's continued applicability and usefulness are suspect.

Ratemaking Special Report

Return on Equity:

Fixing an appropriate rate of return on equity (ROE) for electric utility investors marks a fundamental component of the typical cost-of-service rate case conducted across the nation by state public utility commissions (PUCs). The following survey demonstrates the results of such cases, as observed over the past year.

Transmission Upgrades:

How to allocate the costs.

Efforts to establish and quantify congestion-reduction and loss-reduction projects are progressing in electric markets with locational marginal price (LMP) regimes. The Path 15 upgrade approval by the California ISO two years ago was largely based upon its economic benefits. A draft report from the Electric Reliability Council of Texas (ERCOT), , states that ERCOT will consider transmission projects that are "economically justified by the reduction of congestion and losses."¹