Fortnightly Magazine - September 2005

Hold the Champagne?

There is much to celebrate in the Energy Policy Act of 2005, but what will federal regulators do?

When we least expected it, the politicians finally were able to pull a multi-billion white rabbit out of their hat—enacting a comprehensive national energy law (Energy Policy Act of 2005) that will usher in extraordinary changes in the industry However, just how the new law really will affect the industry is the question of the hour, with many provisions of the law left to the interpretation of regulators.

People

(September 2005) The Consolidated Edison Inc. board of directors elected Kevin Burke as a member. Great River Energy named Greg Ridderbusch vice president, business development and strategy. Millennium Pipeline named Dick Leehr as president. And others...

Wholesale Competition: The Big-Bang Effect

Consider the opening of the PJM market, and its effect on prices.

Wholesale competition is working, and the best evidence to date is the savings produced from the opening of the PJM market to competitive power generation from the Midwest. A real-time case study unfolded before our eyes in May and October 2004.

Letter to the Editor

Chris King and Dan Delurey provide additional analysis for their recent paper, “Energy Efficiency and Demand Response: Twins, Siblings, or Cousins?” Fortnightly, March 2005.

Efficient Frontier: A Brief Overview

The efficient frontier is a portfolio analysis concept designed to assess risk vs. return for an investment portfolio. 

The efficient frontier is a portfolio analysis concept designed to assess risk vs. return for an investment portfolio. While the financial projections of individual assets are key to the analysis, the end result is critical to successful structuring of the portfolio as a whole. Key to the efficient frontier is that it represents the highest level of a portfolio's return for any given level of risk. It can be applied to physical assets, as well as financial instruments—simultaneously. Figure 1 displays a typical efficient frontier chart.

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