Perspective

New Jersey’s BGS Auction: A Model for the Nation

Internet procurement may be used in other states.

Since 2002, the annual energy auctions created and administered by the New Jersey Board of Public Utilities have proven to be an innovative and successful way to meet our state's growing demand for electricity. We were the first state in the nation to procure most of its electric needs through an Internet-based auction. We will keep moving forward at a measured, prudent pace on hourly pricing.

Consolidation: Key to the Future?

Why integration may win out in the long run.

In the electric power industry, the urge to merge has gained a new lease on life. These combinations are witness to the powerful forces of consolidation let loose when deregulation makes consolidation a preferred tactic in an uncertain world. But to what extent will government policy encourage or resist this trend? What exactly is the regulatory environment that nurtures combinations or, for that matter, supports fragmentation? As we shall see, there are many cross-currents.

RTOs: Facts, Not Fiction

The benefits and future challenges of regional transmission organizations.

Ten years after the initial Notice of Proposed Rulemaking that set in motion the establishment of RTOs, it is hard to dispute that the mature organized markets with independent management of the grid have achieved tangible benefits for all customers. It is important to remind ourselves of the accomplishments and challenges ahead.

Building a Better Utility

Many of the obstacles and strategic issues that utilities face today are all too familiar. This time they must be solved with a different business model.

We overbuild, run short, then overbuild again. You'd think we'd learn, because when the forecasts aren't accurate, when overcapacity plagues the industry, companies fail. Can we get the forecasts right? Probably not. But we can plan for forecasts that will be wrong. They always are. And they will be until the system is redesigned to let prices clear the market.

The Man Who Would Be King

Exelon Chairman, President, and CEO John W. Rowe, on the proposed merger that would create the largest utility in the United States.

Exelon CEO John W. Rowe would head the largest utility in the industry, if a proposed merger with PSEG goes through. By creating a $40 billion market-capitalization utility, the newly formed company would be 60 percent larger than its nearest market-cap peer, and would have total assets of approximately $79 billion, with almost $25 billion in annual revenues and $3.2 billion in annual net income.

FERC’s Market-Power Test: First, Do No Harm

Why a new market-power screen—accounting for the relationship between customers and suppliers in the wholesale marketplace—is a necessity.

The philosophy of "first, do no harm" has served the medical profession well for more than 2,000 years. Today, it may be equally good advice for FERC as it seeks to create fair and accurate screens to determine who does and does not have market power. One of the two interim screens FERC is using to evaluate applications for market-based rate authority may create a large number of false positives—power suppliers judged to have market power when in reality they do not. To remedy this, FERC should add a new market-power screen based upon an analysis of the actual relationship between customers and suppliers in the wholesale marketplace.

Perspective

Renewable Energy in the 21st Century:

Perspective

Renewable Energy in the 21st Century:

State involvement in promoting renewable technologies has profound implications for the future of the energy industry.

Election-year posturing seems to have prevented the federal government from reaching consensus on a number of energy issues ranging from standard market design to global warming, MBTE to Kyoto, ANWR to nuclear waste disposal.

The Need for Nuclear Now

States will play a significant role in the resurgence of nuclear power plants in America.

At times, various conditions align and set the stage for achieving goals that may have appeared to be unreachable. Last summer, the Boston Red Sox were all but eliminated from contention, but then won an amazing stretch of baseball games that resulted in a World Series championship.

A similar scenario can be applied to the U.S. nuclear industry-producer of a steady, low-cost, environmentally important electricity source poised to thrive with the possibility of new plant construction in the not-so-distant future.

Navigating the Gray Areas

Successful energy market development means understanding new subtleties and nuances.

A recent McKinsey article proclaimed, “More progress has been made improving the governance of U.S. corporations during the past couple of years than in the several decades preceding them." Yet, revelations from the disgraceful behavior associated with Enron and related events continue to surface and confuse the issue of what is needed today to move energy markets forward.

Barriers to Entry: The Fight Against Power- Line Communications

And for a reasonable regulatory policy for new broadband technology.

To achieve the benefits of broadband over power line communications platforms, policy-makers must resolve a number of issues, including: (1) harmful radio interference; (2) access; and (3) cross-subsidies. If their policies impose diseconomies on the operation, design, or financial structure of BPL, widespread deployment of the technology is unlikely.