Conservation investments benefit participants and non-participants alike
For-profit energy efficiency programs are coming. Duke Energy proposes to align the interests of shareholders and retail customers within an expanded least-cost approach. Convincing regulators will require taking a holistic view of the costs and benefits.
Grid reliability depends on ‘reasonable business judgment’
The word “security” no longer means what it used to mean. Now, “security” means gates, guards and guns. It means protecting critical assets with a multi-layered cyber and physical perimeter. It means exercising vigilance and caution, and accepting inconvenience as a matter of routine.
Before the hearings started, I felt the number of critical cyber assets for a medium size utility would be on the order of several thousand, not 20 as some major utilities are identifying under the CIP standards. This should be a red flag for the industry.
TXU’s buyout structure creates a potential model for utility M&A and refinancing deals
2007 was a big year for TXU Corp., as it went private in the largest leveraged buyout in history. To sweeten the deal for environmentalists and regulators, TXU made structural and financial concessions. Now TXU’s ring-fencing structure might become a template for future utility M&A and refinancing deals.
NERC’s new cyber security rules may minimize cost of compliance, but they leave utilities guessing on how to identify risks.
Liam Baker, vice president for regulatory affairs at US Power Generating, questions whether his company’s power plants and control systems in New York and Massachusetts must comply with the electric industry’s new mandatory standards for cyber security. Baker voiced his doubts in written comments he filed in October with FERC.
The latest ‘incremental’ policy changes might realign utility financial incentives.
Back in 1978, Congress passed an energy bill, the National Energy Act, including an obscure provision that seemed like an incremental tweak to U.S. energy policy. But eventually, that incremental tweak—the Public Utility Regulatory Policies Act (PURPA)—smashed through the gates of the vertically integrated utility construct. PURPA introduced competition into wholesale power markets in a way that fundamentally changed the U.S. utility industry.
The Interstate Natural Gas Association named Richard R. Hoffmann executive director of the The INGAA Foundation. E. Kevin Bethel joined Sierra Pacific Resources as chief accounting officer. Dominion East Ohio promoted Bruce C. Klink to president. American Electric Power announced several changes. And others...
Federal loan guarantees raise hopes for new reactors planned by affiliates of Constellation and NRG.
Federal loan guarantees have been unleashed to support new nuclear plant construction. Will this be the watershed event that finally gets nuclear moving forward in the United States?
Regulatory structures protect ratepayers in geography-spanning utility mergers.
Electric utility executives generally view corporate restructuring as a potential source of economic value and a potential partial solution to financial problems that reflect changing business risks. On the other hand, regulatory commissioners attempt to insulate and regulate the utility component of the restructured energy business and to protect the public interest, including reliability of service at reasonable costs.
Nuclear power cost projections should incorporate fuel cost uncertainties.
Nuclear fuel cost projections typically consist of current reported costs that are escalated at the rate of inflation. These projections usually consist of a single estimate in each year. In the past, when nuclear fuel costs were low and declining, this approach was acceptable and may have even been conservative. But this approach is likely to understate projected nuclear fuel cost when nuclear fuel costs are increasing.