Beware even the best of attempts at apportioning grid rights and costs.
Several recent complaints involving PJM and now at FERC pose fundamental questions on how regulators and grid operators should attempt to price and allocate grid rights and costs. Is the transmission network a public asset, with costs that must be apportioned on principles of equity? Or, rather, is transmission an instrument of commerce, to be priced so as to maximize trade?
Companies should adopt a far more robust metric.
Market risk remains one of the most significant issues for gas and power merchants. The SEC requires disclosure of market risks in a company’s annual filings. However, the allowable metrics fail to communicate the type of information an investor actually can use to gain an understanding of the market risk embedded in a company’s business.
Exclusive interviews with the CEOs of five regional transmission systems.
Exclusive interviews with CEOs at five regional independent transmission system operators: Phil Harris, at PJM; Gordon van Welie, at ISO New England; Yakout Monsour, at the California ISO; Graham Edwards, at MISO; and Mark Lynch, at the New York ISO.
As rate disallowances become more commonplace and capital requirements expand, infrastructure development will come with a higher price tag.
As the industry’s regulatory risks and capital requirements expand, financing will come with a higher price tag—and another cost pressure in the ratemaking process.
Significant value waits to be unlocked through consolidation, but conventional approaches have been inadequate.
Can consolidation create sustainable long-term value, or will it prove seductive but, ultimately, disappointing to shareholders, employees, customers, and management alike?
Some recent utility rate proceedings cast doubt on new ROE models and “risk adders.”
(November 2006) Our annual return on equity (ROE) survey broadly shows a continuing decline in the level of debate over issues specific to restructuring of the electric market. It also reveals a subtle shift back to investor requirements and overall business risks faced by regulated companies.
Why competitive markets are scaring regulators.
If the underlying wholesale electricity markets from which supplies are procured are competitive, then the remaining concerns regarding price levels and volatility can be addressed through regulatory policies.
We are better off under restructured electric markets.
The most important action regulators can take to minimize consumer electricity costs is, and will continue to be, ensuring competitive wholesale markets, while demanding a rich mixture of products from the suppliers in these markets.
Why the next wave of transformation is already upon us.
The electricity system in the United States received renewed attention after the August 2003 blackout that affected more than 50 million customers across the Northeast United States and caused billions of dollars of damage to the U.S. economy. This blackout became a call to action as the event exposed the United States’ dependency on a vulnerable infrastructure. The intelligent network is one of the results of that call to action.
Ken Glozer, President, OMB Professionals Inc.: “The Geopolitics of the Grid” was well done. I enjoyed reading it. Regarding the paragraph raising questions about why there are major disparities in retail electric rates from one region of the country to another, one major contributing reason is archaic and unfair federal subsidies.
Anonymous: “Gravy Train” articulately summarized the emerging tension between utility executive compensation and “return to basics” corporate strategies.