Frontlines & Op-Ed

The Geopolitics of the Grid

Is it really so important to preserve regional differences?

The July 11, 2006, edition of the Wall Street Journal contained an excellent opinion piece which posed the question: “What does ‘energy security’ really mean?” What is so striking about his article is that his analysis easily could describe power industry politics between low-cost states (suppliers) and high-cost states (consumers).

Mirror, Mirror

A rash of rate hikes around the country could have utilities facing a public-relations disaster.

Constellation Energy CEO Mayo Shattuck has complained that he and the utility have unfairly been demonized in the public and in the press. In one interview with a Maryland paper, Shattuck showed distress over the verbal abuse his executives had received from angry ratepayers. And who can blame him?

Gravy Train

Utilities must trim the fat from excessive stock options, stock grants and executive pay.

This month’s cover story focuses on how utilities intend to find the talent they’ll need over the next few years to replace all those retiring baby boomers. And part of that puzzle naturally involves executive pay: how to attract the best and brightest without going overboard on rewards for performance.

Where Is Super-FERC?

Sweeping revisions to Order 888 are needed before true wholesale competition can take place.

There’s been a lot of talk in the industry about new super powers for market enforcement, conferred by Congress on FERC in last year’s energy legislation. But this hasn’t been the case entirely. Many believe that FERC still labors at a disadvantage.

Warming to the Crisis

Kyoto countries miss their targets, but scientists say climate change was already unstoppable.

Hollywood and the media are way ahead of the politicians when it comes to the greenhouse effect and global warming. But even as utilities try to be good corporate citizens and help devise a federal or national plan, the question remains as to whether the domestic economy can achieve even a modest reduction in CO2 releases—enough to put even a small dent in current predictions of global climate change.

Letters to the Editor

To the Editor:

In “Rate-Base Cleansings: Rolling Over Ratepayers” (November 2005, p.58), Michael Majoros urges state public utility commissions to recognize a refundable regulatory liability for past charges to ratepayers for non-legal asset retirement costs.

The Merger Paradox

More consolidation could trim costs, but some CEOs fear a backlash from regulators.

With the possible exception of keeping the lights on, the merger game dwarfs just about every other question facing today’s electric utilities. The last big wave of consolidation hit in the late 1990s. Now the forecast calls for a repeat performance, but don’t bet the farm. There’s a hitch, you see. It’s today’s high commodity costs.

Letter to the Editor

Jacob Williams, VP Generation Development, Peabody Energy: While transmission built to “compete” with generation capacity is an interesting notion, it generally misses the real value of transmission. In today’s high energy-price world, delivering “affordable” energy to consumers is very important. I believe we need higher standards in the electricity market similar to transportation, where we value reliability and affordability (time).

NERC Knows Best?

FERC this year must select a reliability czar. But the obvious choice could prove less than ideal.

NERC up until now has been, in its own words, “a self regulatory organization, relying on reciprocity, peer pressure, and the mutual self-interest of all those involved in the electric system.” Nevertheless, can this tradition of kind, gentle, and voluntary consensus-building stand NERC in good stead as it seeks to transform itself in to a steel-fisted czar that would enforce mandatory standards?

Letters to the Editor

Jim Lundrigan, New Haven, Conn.: After reading Gordon van Welie’s article (“New England: A Critical Look at Competition,”) I couldn’t help but think back to California in 2000. Van Welie, who is president and CEO of ISO New England, is trying to feed the citizens of New England the same brand of malarkey that the California ISO fed the California Public Utilities Commission in 2000 when wholesale and retail prices in California were perfectly linked and nearly succeeded in bankrupting the wealthiest state in the country.

John S. Ferguson, Richardson, Texas: The article of Michael J. Majoros Jr. (“Rate-Base Cleansings: Rolling Over Ratepayers,”) attracted my attention, because I perceive it to propose a solution—PUCs’ need to recognize refundable regulatory liabilities—for a problem that does not exist.