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Fortnightly Magazine - August 2004

Facing the Death Penalty

Did FERC's market power ruling go too far?

Market-based sales put at risk are the financial lifeblood of some utilities, especially those of the multi-billion-dollar, vertically integrated variety. Those that fail FERC's market-power test will be forced to sell their excess generation at cost-based rates — a "death penalty," according to some utility CEOs.
Byline: 

Richard Stavros

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People

People for August 2004.

Positions filled at FERC, Colorado PUC, CMS Energy, and others.
Byline: 

PUF

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It's Back

Energy trading returns, healthier and wiser.

As the overall market and, in particular, credit ratings begin to improve, will utilities and other energy players jump back into the energy trading market? Only if the return of trading adds real value to a company.
Byline: 

Gary L. Hunt and Grant Thain

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Perspective: Leave Green-Power Quotas to the States

Congress should not impose a federal renewable portfolio standard.

The adoption of an RPS by more than a dozen states has inspired and contributed to proposals for a federal green-power quota. Leave the green-power quotas to the states. PURPA should be amended to include an RPS among the retail policies that can be adopted or rejected by state public service commissions.
Byline: 

James W. Moeller

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A Market-Access Plan for Vertically Integrated Utilities

Assimilating the best of the regulated-utility and merchant models.

We propose a market-access plan (MAP) that does not advocate sweeping changes. It instead builds on existing VIU frameworks with structural improvements that are technically feasible, cost-effective, and politically practicable. The result assimilates the best of the VIU and merchant models; benefits the industry investment climate; increases the level of low-cost, efficient, and environmentally friendly power supplies; and promises to save customers millions of dollars.
Byline: 

Larry Eisenstat, Pat Alexander, and Don Gelinas

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Business & Money: Fencing in the Regulated Utilities

Credit-rating linkage harms certain power companies. Ring-fencing is the best answer for regulators.

Ring-fencing may be the only regulatory device capable of leveling the playing field and forcing the holding companies to absorb the consequences of failed non-utility investments.
Byline: 

Dr. Fred Grygiel and John Garvey

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MISO: Building The Perfect Beast

Seams, holes, and historic precedent challenge the Midwest ISO's evolution.

As it addresses problems that contributed to last August’s blackout, the Midwest ISO struggles with staffing, “grandfathered” service agreements, and integration issues.
Byline: 

Michael T. Burr

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Profit Without Costs

An analysis of participant funding in natural gas and electricity markets.

A former FERC chairman asks: Should the cost of transmission infrastructure improvements be rolled-in with the costs shouldered by utility companies and their native customers, even if those customers receive no benefit from the expenditure?
Byline: 

Curt Hébert Jr.

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Global Warming: The Gathering Storm

Russia resurrects the Kyoto Protocol and the prospect of either mandatory CO2 emissions cuts for U.S. utilities, or the start of a global trade war.

Once an opponent of the Kyoto Protocol, Russia is set to ratify it later this year. Will the growing alliance between Russia and the EU force the United States to satisfy the terms of Kyoto?
Byline: 

Peter J. Fontaine, Esquire

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