[BETA] Fortnightly

Conditions are ideal for utility financing—but not forever. Although interest rates remain low, policy changes weigh on capital structures.

The PJM Interconnect’s Reliability Pricing Model generally has succeeded in attracting and retaining low-cost generation and demand resources to maintain resource adequacy. But sluggish demand and low prices have weakened the market for long-term capacity contracts. Suppliers aren’t willing to lock in current low prices, and buyers don’t want to pay more for future certainty. Is the market dysfunctional, as some state lawmakers suggest, or does the lack of long-term contracts indicate a rational balance of supply and demand?

With the dramatic growth of the liquefied natural gas (LNG) trade worldwide and increased dependence on LNG as the gas fuel of the future, gas-utility companies at the end of the chain need to question whether the LNG chains are still safe, reliable, and well managed. But before diving in to some of the risks, it should be pointed out that historically LNG chains have been safe.