Fortnightly Magazine - September 2008

Avalanche Economics

Alaskan crisis demonstrates pocketbook power.

A series of avalanches thundered down the sides of coastal mountains near Juneau, Alaska, early in the morning on April 16. No people were hurt—not directly. But the avalanches took out several transmission towers that carried electricity from the Snettisham hydroelectric dam, cutting Juneau off from its primary source of power. The resulting crisis turned into an instructive experiment for Alaska Electric Light & Power Co.—Juneau’s privately held utility—as well as the industry in general.

Capital Conundrum

The Big Build will test the industry’s access to Wall Street.

The era of easily available, affordable energy rapidly is ending and our society is realizing that our energy infrastructure is severely inadequate to supply the energy demands of the future. The major issue facing the sector today is how to fund and deliver this new climate-friendly infrastructure, which is currently estimated will cost almost $2 trillion between now and 2030.

Buyer's Remorse

The PJM complaint and the rising cost of electric reliability.

Who says ratepayers must accept the traditional measure of electric reliability—a single one-hour outage every ten years? If shown the bill ahead of time, might they decide otherwise; that such luxury is no longer affordable? Consumers are making similar decisions about gasoline and mortgages. Why not electricity?

Portfolio Primer

How to maximize shareholder value across the enterprise.

How can utility companies ensure investment dollars are being allocated wisely? Asset portfolio management (APM) attempts to capture and analyze the relationships among the drivers of SHV at the portfolio level. It provides management with a well-informed, multi-dimensional picture to help make efficient asset investment decisions that optimize the total enterprise SHV.

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