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Fortnightly Magazine - December 2005

Bridging the Regulatory Divide

Regional committees may improve collaboration between federal and state regulators.

Layered on top of ever-evolving industry restructuring and corresponding FERC rulemakings, we have the provisions of the Energy Policy Act of 2005. When viewed in totality, the new energy legislation provides the federal government with substantial new authority over generation and transmission that can, and might well be, used to alter the outcome of what a state would have decided under its previously exclusive jurisdictional domain. Whether we can avoid unhappy and rancorous confrontations with the use of joint boards, regional compacts, or regional state committees is yet to be seen, but it is my sincere hope that we can do so.

Byline: 

Sandra L. Hochstetter

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Interest Rates and Fiscal Armageddon

How to prepare for killer capital costs on future power-plant builds.

Mark Twain once wrote: “A banker is a fellow who lends you his umbrella when the sun is shining and wants it back when it starts to rain.” If utility finance executives aren’t careful, they might find themselves caught in the rain without an umbrella.

Byline: 

Richard Stavros

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PJM's New Game

If transmission can substitute for gen-plant capacity, why not clear both products in the same auction?

PJM applied to FERC for authority to impose a new regime of requirements for reserves of electric generating capacity. This new construct, known as the reliability pricing model (RPM), would replace PJM’s current capacity market.

Byline: 

Bruce W. Radford

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Battle Royal: Pulverized - Coal vs IGCC

The battle for the future of coal-fired power is heating up. Recent developments give IGCC a fighting chance.

Does the future belong to pulverized coal or integrated gasification combined-cycle technologies? The answer will determine how the industry manages load growth and regulatory risks, while protecting shareholders and ratepayers.

Byline: 

Michael T. Burr

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The Capacity Market Enigma

Why haven’t reliability markets developed?

Capacity and energy, although related, are not identical products. If we are to continue to rely on competitive market forces to provide new generation supplies, we need separate, long-term, installed capacity markets.

Byline: 

Jonathan A. Lesser, Ph.D. and Guillermo Israilevich, Ph.D.

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A Continuing Reign of Incoherence

How EPACT fails to address key industry issues.

The Energy Policy Act of 2005 ducks three crucial issues: volatile prices and fuel supplies; insufficient, erratic capital investment in generation and transmission; and energy commodity pricing. What should policymakers do now?

Byline: 

Roger Stark

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Day of Decision for FERC

How will the commission answer Congress’ call for energy market transparency?

How will the Federal Energy Regulatory Commission answer Congress’ call for energy market transparency? Will it rest on its laurels, or move forward to restore confidence in wholesale energy markets?

Byline: 

J. Michel Marcoux

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Demand-Response and Smart-Meter Provisions: Breakthrough or Non-Event?

Regulators and Utilities: The Ball’s in Your Court

Are the smart-metering provisions of EPACT 2005 a good thing? The answer, like most things in life, is, “It depends.” Looked at holistically, the opportunity is great. Viewed incrementally, it’s empty words on paper. It’s up to regulators and utilities to take the initiative.

Byline: 

Chris King

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The Economics of Low-Head Dams

How they can generate green energy and improve a municipality’s bottom line.

Federal incentive payment of 1.8 cents/kWh for the generation of renewable energy—part of The Energy Policy Act of 2005—increases the economic attractiveness of many potential hydro sites, and, as a consequence, could revive the building of low-head dams.

Byline: 

Dr. Gary C. Young, Ken V. Rieck, and Clifford Phillips

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