Frontlines & Op-Ed

The Fourth Wave

Are banks better at trading power than utilities?

Bank of America's recent request to FERC to be allowed to trade power was yet one more reminder that a whole new class of companies are quietly positioning themselves to dominate what's left of the energy trading space after the departure of traders like Enron and Aquila.

Grading Pat Wood

Reviewing the FERC chairman's first year, and what he might do next.

This September, Pat Wood III completed his first year as chairman of the Federal Energy Regulatory Commission (FERC). Some long-time FERC watchers gave Fortnightly some insights into how this chairman has performed so far, and what we might expect from him in the future.

The Empire Strikes Back

Will FERC's market solution wipe out state commissions?

One might say, when it comes to FERC, some state public utilities commissions' lack of faith is disturbing—to paraphrase Lord Vader. It's also necessary, as any journalist would tell you. The FERC NOPR on standard market design (SMD)—which completes the "trilogy" of regulation on wholesale markets, as chairman Pat Wood described it—had some state PUCs blasting the NOPR even before its July 31 release.

An Open Checkbook

Why grid owners don't like FERC's new rules on gen interconnection.

A year ago, when a group of electric utilities in the Southwest signed off on deals to hook up new generators in Arizona with an innovative "common bus" treatment for two adjoining switchyards at the Palo Verde hub, the Federal Energy Regulatory Commission (FERC) was quick to heap on the praise. "Attaboy," said FERC's Pat Wood, at the commission's meeting of July 25, 2001. Nevertheless, over the past twelve months, FERC twice has proposed new rules to govern the way in which new power plants gain the right to interconnect with the interstate transmission grid. These new rules on gen interconnection form an essential part of the puzzle more aptly known as the standard market design (SMD).

Collateral Damage

Credit ratings agencies put the squeeze on merchant power.

Have they gone too far? Have ratings agencies become overzealous in their efforts to rein in energy merchants? Many in the industry are coming to that belief after Aquila, one of the industry's most respected companies and leaders, announced it would exit the merchant energy trading sector in late July. It said it could no longer meet the credit requirements imposed by ratings agencies to maintain that business.

Barbarians at the Gates

FERC... SEC... CFTC...Congress ... Ratings Agencies... Stockholders... Bondholders... Private Equity Investors?

No one has yet quantified or qualified the devastation to industry reputation, electric competition, or energy companies' future earnings power caused by the current round of energy trading scandals that is shaking the industry to its core.

Bursting The Bubble

Merchants' trading volumes and revenue are still too inflated.

In the post-Enron world, many continue to question the legitimacy of the practice of inflating revenues through the trading business to bolster the company's financial picture.

Point-Counterpoint

Letters to the Editor

David Moore: Chris King’s article, “How Competitive Metering Has Failed,” (Nov. 15, 2001) overstates both the weight the CBO report places on the demand side of the electricity market and the importance it assigns to advanced metering therein. King responds: While Mr. Moore and I seem to disagree on the semantics, it appears that we are in violent agreement on the big picture, as stated in the CBO report.

Biting Pat Wood's Hand

FERC finds the states have teeth, too.

FERC Chairman Pat Wood ought to be commended for trying to extend a hand of cooperation to state PUCs. But certainly he must by now understand that the nature of the state regulator, as the nature of the wolf, is unchangeable.

Letter to the Editor (May 15, 2002)

EPSA exec rebukes McCullough's claims.

A response to the article "Revisiting California," April 1, 2002: If the issues confronting California’s ratepayers weren’t so important, it would be easy to say that Robert McCullough’s efforts are best published on April Fools Day.