By displacing electricity produced from fossil fuels, renewable power plants produce two distinct products—commodity electricity and a set of environmental attributes (particularly avoided emissions). These environmental attributes can be packaged into a product called a renewable energy certificate, or REC, and sold separately from the electricity. As REC markets develop, key issues are being addressed regarding market interaction.

Tax incentives, renewable portfolio standards, and the creation of renewable-energy credits and carbon constraints are no longer separate considerations when assessing renewable-energy projects. The convergence of these economic considerations will affect the value proposition for every potential generation investment in the United States.

Now at last, in a region other than California, we can see clearly that renewable mandates and fears of carbon taxes have influenced the power-plant development cycle. Moreover, this effect is helping to drive policy proposals for the pricing of transmission service and the recovery of costs for grid upgrades deemed necessary to bring the new plants on line.

The opposing challenges of higher gas prices and rising environmental concerns have put utility regulators in a difficult position: How can they bring rate stability while minimizing environmental impacts? At the same time, they are grappling with trends in consolidation, competition, transmission planning, and distribution service quality. Each state brings a different view of the changing utility landscape. For insight, Fortnightly brought together regulators from several states to discuss their plans and priorities for today and the future.

Technology Corridor

Power-Plant Cooling

EPA flounders on the Clean Water rule, while producers tackle the real enemy-shortage.

The U.S. Environmental Protection Agency (EPA) says that a typical sport fisherman working the Great Lakes would pay $4.58 for the privilege of catching a single walleye/pike, but would gladly fork over $7.99 to land a trout, or as much as $11.19 for a salmon.

Power Measurement

Will wind power close the gap between state renewable portfolio standards and the current shortfall in viable technologies?

Today there are 20 states plus the District of Columbia in which renewable portfolio standards (RPS) or mandatory renewable quotas have been established. During the past several months, six additional states formally have considered renewable standards but have not yet initiated programs.

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.

IT Roundtable

Data gathering and controllability offer the quickest path to reliability.

Managing power grids in North America has become much more complicated in recent years, and that complexity grows with each passing day.

Like it or not, changes are coming for electric cooperatives. Fewer and bigger might be the inevitable result.

When power planners at Basin Electric Power Cooperative began trying to decide how and where the company's next big power plant would be built, they did what a co-op does best -they reached out and formed a coalition.

Commission Watch

Feds seek plug-and-play for distributed generation, but utilities want the power to stay local.

Pity the poor Federal Energy Regulatory Commission (FERC). With its market crusade out of favor, and transmission reform suddenly suspect after the Aug. 14 blackout, it could use a new agenda.