Fortnightly Magazine - August 2016

Estimating Benefits of Reducing Greenhouse Gas Emissions

Social Cost of Carbon

In Paris at the end of 2015, the world’s governments decided to be more ambitious than ever on climate change. They set their sights on a goal of limiting the increase in average global temperature to well below two degrees Celsius. Countries committed to constrain their greenhouse gas emissions over the next 10 to 15 years.

Pay-As-Bid Revisited

Many see a higher cap as a windfall for nuclear and coal.

FERC’s new rulemaking proposal would allow generators to tender supply bids higher than $1,000 per megawatt-hour, if it really costs that much to buy fuel to generate power. Some opponents say that may be OK for gas-fired turbines, but it’s not needed for nuclear or coal-fired plants.

Marginal Utility

Changing the Electric Utility Financial Paradigm

Global capital markets have accommodated the industry with low interest rates and high stock price multiples, but capital markets are fickle. Electrics will be capitalized more like other industrial companies, and less like regulated monopolies.

Nice Work If You Can Get It

Rate of Return for Fun and Profit

If you want actionable intelligence up front, here it is: invest in regulated utilities. There is mounting evidence that investment in utility stocks has outperformed the broader market in the past, and will continue to do so.

Need for New Regulatory/Business Models

How to Help Them Understand the New Competitive Marketplace

Understand the mindset of legislators and regulators: constituent satisfaction is key for both. State legislators are the folks who can change the regulatory model.

Response to Mitnick Re: What Consumers Want

A response to the Editor-in-Chief column by Steve Mitnick in our May 2016 issue

Unless and until we have access to economic bulk storage, substitution of carbon-free sources for fossil fuels will increase cost significantly. The cost must be borne by some combination of taxpayers and ratepayers.

Electric Comedians

Garrison Keillor, Meat Loaf, Bob and Ray, Jiminy Cricket, etc.

"I am an expert of electricity. My father occupied the chair of applied electricity at the state prison." -W.C. Fields


"We believe that electricity exists because the electric company keeps sending us bills for it. But we cannot figure out how it travels inside wires." -Dave Barry


"In the early 1980s, I got into a war with my management. They just kept on suing me and I lost everything. So I had to go out on tour to make sure the electricity stayed on." -Meat Loaf, musician