Fortnightly Magazine - August 2009

Letters to the Editor

(August 2009) When I hear the new buzz word term dynamic pricing I think of politicians who may be socialist or liberal, but who call themselves “progressive.” Now, what thoughtful person would not vote for a progressive. Do you want to vote for someone who isn’t progressive? That would make you some kind of Luddite. The same holds true for the people now running around the country calling for “dynamic pricing” i.e., charging $5/kWh for up to 100 hours per year, and calling any other form of pricing “dumb rates.”

An Indicator of Fairness

Ratable treatment of removal costs through depreciation should be favored.

Removal cost is the expenditure involved with physical removal or safe abandonment of an asset, and is not a trivial matter, because it is not unusual for such expenditures for long-lived property to exceed the related depreciable investment amounts. Various treatments of removal costs have various effects on utility ratepayers. Of all the approaches the industry uses, ratable treatment through depreciation minimizes the costs borne by ratepayers.

M&A Waiting Game

Utilities protect their balance sheets.

What a difference a year can make. Since September 2008, M&A has slowed dramatically as both buyers and sellers play a waiting game. So who will blink first?

The Smart-Enough Grid

How much efficiency do ratepayers need—and utilities want?

When the applause dies down, the smart grid may turn out to be its own worst enemy. The California Independent System Operator (CAISO) explained this irony in comments it filed in May, after the FERC asked the industry for policy ideas on the smart grid.

Carbon In Electricity Markets

Price transparency will drive GHG reductions.

In light of coming GHG legislation, price transparency is the key to achieving cleaner generation through the dispatch of lower-carbon sources.

Efficient Regulation, Efficient Grid

Intelligent infrastructure requires an intelligent policy framework.

A new grid efficiency framework will bring a new understanding between regulators and utilities that allows the industry to advance in cutting carbon emissions and improving system efficiencies, while maintaining reliability.

Ontario's Failed Experiment (Part 2)

Service quality suffers under PBR framework.

Building upon last month’s installment, more is revealed on how, after 10 years of incentive regulation, reliability has declined in Ontario.

Renewable Overload

Waxman-Markey RES creates land-use dilemmas.

The Waxman-Markey bill proposes a federal renewable electricity standard. This standard, combined with state mandates, raises the risk of forest land shortages and higher prices for food and feedstocks.

Assessing Construction Compliance

Gas utilities can make better use of their inspection budgets.

An entirely new and better approach to measuring risk and compliance allows companies actually to measure this kind of risk—that is, to measure the degrees of compliance regarding actual field practices versus written standards and procedures.

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