How EPACT fails to address key industry issues.
Roger Stark is a partner at Kirkpatrick & Lockhart Nicholson Graham LLP. Contact him at email@example.com.
US. energy stakeholders have for too long been fooled into believing that patchwork reforms are a substitute for coherent policies. The Energy Policy Act of 2005 (EPACT)1 is the latest, and hopefully the last, example of this tradition.
The key issues confronting U.S. power markets are, for the most part, well-known and generally not in dispute. Three of the most pressing—the first two are addressed in the Act—are:
- Volatile prices and supplies of fuel stock;
- Insufficient or erratic capital investment in generation and transmission resources; and
- Energy commodity pricing that fails to reflect the “all-in” cost (i.e., including environmental costs) of fuels for thermal generation.
EPACT fails to advance or resolve these key issues, thereby presenting yet another opportunity for stakeholders to mistake marginal changes for substantive reform.