State regulators grapple with investments, supply planning, and structural issues.
Nothing changes the landscape like a hurricane.
As Gulf Coast utilities struggled to recover from the disaster of two major hurricanes striking within weeks of each other, the rest of the country was bracing for shockwaves in fuel prices. After a year of precipitous price increases, projections of even higher natural-gas prices this winter are shedding a different light on state ratemaking and resource-planning priorities.
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.
Life After Katrina
Despite facing colossal challenges in the wake of Hurricane Katrina, Mississippi's utilities successfully restored power to most affected areas within three weeks—a heroic effort by any measure. In the aftermath, however, utility regulators must answer questions they've never considered before—questions about how ratepayers in one of America's poorest states will absorb rebuilding costs that will mount into the billions, and how to help utilities deal with the fact that nearly 15 percent of their electricity loads—and therefore their rate bases—were wiped out in a single blow.