Security

American voters dashed the nuclear industry’s hopes for a renaissance last November—or so it seemed. Recent developments in Washington have rekindled those hopes, but will climate-policy brinksmanship lead to a sustainable future for nuclear power?

This year has marked a sea change in energy policy, from environmental compliance to transmission pricing. Fortnightly interviews top lawyers to better understand how regulatory developments are affecting the power and gas industries.

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?

This summer marked the 40th anniversary of a pivotal event in the environmental movement. On June 22, 1969, the oily surface of the Cuyahoga River caught fire, drawing national attention to the plight of America’s lakes and rivers. However, clean water standards didn’t begin with the Cuyahoga River fire, the EPA or the Clean Water Act. A series of common-law nuisance lawsuits, combined with a patchwork of state laws and (weak) federal statutes, preceded the comprehensive legislation that emerged from the smoke of the Cuyahoga. Today we’re seeing a similar progression in greenhouse gas regulation, with civil suits, state initiatives and marginal federal actions apparently marching toward a national climate policy.

Should the power industry adapt its approach to capital markets in this environment? The answer, of course, is yes. Multiple frameworks are necessary to establish a power company’s or project’s current cost of capital, especially under volatile capital market conditions. The analyses reveal that in today’s capital markets, it is critical to balance or combine the alternative approaches to the cost of capital in order to develop a long-term view.

For the past several months, analysts and pundits have been using the term “the new normal” to describe post-recession economic conditions. The phrase describes a variety of changes, from stock-market returns to personal savings rates, but it boils down to this: After the recession, the economy will go through a soft recovery, and it won’t return to pre-recession levels of financial and market activity in the mid-term future.

The Waxman-Markey bill proposes a federal renewable electricity standard. This standard, combined with state mandates, raises the risk of forest land shortages and higher prices for food and feedstocks.

As federal policy makers push for GHG regulation and transparent markets, the California experience shows what works and what doesn’t work.

In light of coming GHG legislation, price transparency is the key to achieving cleaner generation through the dispatch of lower-carbon sources.

When the applause dies down, the smart grid may turn out to be its own worst enemy. The California Independent System Operator (CAISO) explained this irony in comments it filed in May, after the FERC asked the industry for policy ideas on the smart grid.