The Southeast again is the battleground for fuels, technology, and market structure.
Gary L. Hunt is president of Global Energy Advisors. Contact him at email@example.com.
One sure sign of recovery in boom-and-bust power-generation markets is the renewed growth in the planning and construction of power plants. Active efforts are underway in generation development in the Southeast markets in spite of the high levels of generating reserve margins. With its traditional utility-dominated market structure and a preference for baseload generation, the Southeast is the battleground for the next round of power-generation development. Power-project development almost always is driven by optimists, and in the Southeast there are champions for coal, nuclear power, natural-gas combined-cycle, and even some interest in renewables developing in Florida. The Southeast thus is an interesting laboratory for testing whether the traditional integrated utility environment can produce least-cost, best-fit solutions faster, better, and cheaper than merchant-energy competitors. It also will be a challenge for regulators to balance the need for reliable, diversified fuel and power mix with the earnings-growth ambitions of these large-scale proponents.