Fortnightly Magazine - May 2010

Solar Eclipse

Wind faces a nano-scale threat.

For decades now, wind turbines have been generating electricity more cheaply than most other (non-hydro) renewable energy technologies. In particular, wind has maintained a comfortable lead over solar energy in the price-per-kWh race. That’s destined to change.

People (May 2010)

Duke Energy named Catherine Heigel to the new position of president of its South Carolina service region. Exelon promoted David C. Brown to senior v.p., federal government affairs and public policy, leading the company’s Washington, D.C., office. CMS Energy promoted John G. Russell to CMS Energy and Consumers Energy president and CEO from president and COO of Consumers Energy. And others.

Autopilot Error

Why similar U.S and Canadian risk profiles yield varied rate-making results.

Cost of capital is often a contentious issue in utility ratemaking. This is due, in part, to the inexact nature of the tools available to financial analysts and the considerable room for divergent opinions on key inputs to cost-of-capital estimation. Perhaps for this very reason, and to achieve regulatory efficiency, Canadian regulators widely adopted a formulaic approach to setting return on equity (ROE). However, an unusual degree of rancor has evolved north of the border as allowed ROEs in Canada, once at parity, have fallen near 200-basis points below their U.S. peers.

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