American Electric Power

You might have thought the Feds closed the book on any broad, region-wide sharing of sunk transmission costs—especially after FERC ruled last spring in Opinion No. 494 that PJM could stick with license-plate pricing (LPP) for transmission lines already planned and built. If you thought that, you weren’t alone. Of 25 transmission owners (TOs) in the Midwest ISO (MISO), 24 voted recently to do the same for their market as well.

American Electric Power named Michael Rencheck senior vice president and chief nuclear officer for its D.C. Cook Nuclear Plant in Bridgman, Mich. The American Public Power Association elected Roger B. Kelley to its board of directors. OGE Energy Corp. named Danny P. Harris as COO. Glen Justis joined Deloitte & Touche LLP as a director in the global energy markets group of the organization’s regulatory and capital markets practice. And others...

Energy producers already have begun to prepare for coming CO₂ regulations. As a first step, many companies are implementing internal trading schemes. In this article, we have focused on AEP and Southern Co. as case studies of how companies are preparing for a carbon-constrained world, because they are in the top 5 companies in the United States with the highest proportion of coal-fired generation in their fleets.

Something seems deeply disturbing about the utility industry these days. An almost palpable tension rises whenever the utility CEO is asked how he will build enough power plants to meet the skyrocketing demand for power. Some consultants predict that sometime after this decade the time will come when utilities won’t be able to build enough to meet demand, no matter what they try.

(December 2006) Michael Heyeck was named senior vice president of transmission at American Electric Power Co. Duke Energy announced that Jim Stanley would lead its Indiana utility as president. ITC Transmission, a subsidiary of ITC Holdings, hired Frances (Francie) Brown as director, state governmental affairs. Edward (Ted) J. Mooney and Jesse H. Ruiz were appointed to ComEd’s board of directors. And others.

(October 2006) Kansas City Power & Light promoted Kevin Bryant to vice president of Energy Solutions. American Electric Power announced a series of executive reassignments as part of the company’s succession planning strategy. Pacific Gas and Electric Co. elected Bill Morrow as president and COO. Bob Drennan, a 23-year Progress Energy veteran, has been named vice president of investor relations. And others...

Utilities are eager to invest in new power capacity—in part to build rate base and in part because they recognize the danger of relying too much on a single fuel source. Environmental issues, however, are adding greater complexity to company strategies for achieving fuel diversity.

While the PJM Interconnection has made no major changes to its prototype capacity market since it proposed the idea a year ago in August, and though it has won a tacit OK from federal regulators for many of the plan’s key elements, don’t expect to see a slam dunk when the time comes for a final review of the controversial idea, known as the Reliability Pricing Model.

Did Congress really invite the industry to re-examine the concept of economic dispatch, as practiced by the regional grid operators and RTOs, through market bids, day-ahead markets, a centralized auction, and a uniform market-clearing price? Perhaps not, but skeptics of RTO practice have called the bluff, if that’s what it was.

The march of technology, the urgent call for greater grid investment, and a painful recent past have caught up with the utilities industry. One key area of preventative maintenance for utilities is the transformer, many of which are decades old. Representing approximately $200 billion in investment, these units—which currently number approximately 100,000—can’t be replaced overnight.