AES

The sweeping regulatory reform implemented in Michigan over the past year is often couched as a response to the economic crisis. Decoupling rates from utility profits, the reasoning goes, will remove disincentives to efficiency. Reducing the subsidies that commercial customers have long shouldered will ease their financial burdens. New renewable portfolio standards and wind generation initiatives will create green jobs and much-needed infrastructure.

Should the power industry adapt its approach to capital markets in this environment? The answer, of course, is yes. Multiple frameworks are necessary to establish a power company’s or project’s current cost of capital, especially under volatile capital market conditions. The analyses reveal that in today’s capital markets, it is critical to balance or combine the alternative approaches to the cost of capital in order to develop a long-term view.

While much has been written about the intelligent grid of late, little attention has been focused on the role of energy storage in achieving its expected benefits. Energy storage is an essential component of the intelligent grid. Energy storage provides greater grid integration of variable renewable energy resource output (e.g., wind, solar); improved system reliability via the provision of grid regulation services; and peak demand reductions and, in turn, deferred capital spending on new and upgraded transmission and distribution assets.

Chris O’Brien is no starry-eyed idealist. An engineer with an MBA, he began his career developing fossil-fired power plants for the AES Corp. But in the 1990s his career took a different turn, when he launched the Energy Star program for the U.S. Environmental Protection Agency. After that, he went into the solar energy business, and never has looked back.

FirstEnergy Corp. named Dennis L. Dabney its vice-president of human resources. Northeast Utilities announced Johnny D. Magwood as its first chief customer officer. AES appointed Ned Hall its executive vice president and president of its wind generation division. Intrepid Technology and Resources named Jack Haffey as its chief executive officer. And others...

Regulation of greenhouse-gas (GHG) emissions and other efforts to control these growing environmental concerns increasingly are impacting businesses, and investors are seeking more and better information on climate-change risks to make informed investment decisions.

Oracle’s Guerry Waters is one of the country’s leading gurus on smart-meter technology—a business sector with huge potential for addressing today’s environmental problems.

(September 2007) Consistent performance over time is the Holy Grail of corporate management, and a focus of many of the executives who made this year’s ranking. Who returned to the list, and who fell off? And more important, why?

In January 2004, FERC authorized AES Ocean Express LLC (AES) to construct and operate natural-gas pipeline facilities to transport revaporized LNG from an offshore receipt point at the boundary between the Exclusive Economic Zone of the United States and the Commonwealth of the Bahamas to onshore delivery points on the east coast of Florida. AES proposed to connect its planned pipeline to the pipeline system of Florida Gas Transmission (FGT). AES and FGT were unable to agree upon the terms and conditions to be included in FGT’s tariff regarding the LNG delivered through AES’ proposed pipeline, leading to AES filing a formal complaint with FERC, wherein it alleged that FGT sought to impose unreasonably restrictive gas quality and interchangeability standards on LNG delivered into the FGT system.

The answer to the question of who will be responsible for cost-mitigation measures to accommodate the introduction of large quantities of LNG into the U.S. pipeline grid remains up in the air for now, but there are signs pointing in one particular direction: toward ratepayers.