Frontlines
Did FERC's market power ruling go too far?
Will utility executives and proponents of electric competition mark July 8, 2004, as a dark day? That was the day the Federal Energy Regulatory Commission (FERC) said it would make no changes to the extremely contentious "interim" screen-the one it adopted back in April to measure market power in electric generation.
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.
In June 2001, the Bush administration withdrew an earlier campaign pledge to support the Kyoto Protocol, claiming that the treaty was fatally flawed in not requiring China and India to reduce carbon dioxide (CO2) emissions and that the science underpinning the treaty was not yet definitive enough to justify the costs of compliance.1
An analysis of participant funding in natural gas and electricity markets.
Of all the issues in the energy industry, no matter how technically or scientifically complex, none is more important than fairness. Price spikes, contract reformation, market manipulation-all hot-button issues during the last four years-revolve around a core value held by practitioners and regulators alike: Are the prices that exist in the marketplace just and reasonable?
Seams, holes, and historic precedent challenge the Midwest ISO's evolution.
In a single sentence, Bill Smith of the Organization of MISO States (OMS) summarizes prevailing concerns about the new-and-improved Midwest ISO: "When it starts, it has to work."
Technology Corridor
Fundamentals in the energy markets are converging to increase the need for incremental gas storage.
The natural gas market is approaching a dramatic turning point. The fundamentals in the energy markets are converging to increase the need for incremental gas storage and the way that storage is used and valued by the customer community. Why is new storage needed? What will it take for new storage to be developed? What do customers need to commit to new storage projects?
Business & Money
An analysis of the strategic implications of the re-basing of power and utility industry valuations.
Over the past several months, traditional valuation levels have re-emerged in the power and utility industry, with recent premium valuation metrics compressing significantly.
Commission Watch
Incentive regulation is not a cure-all for the continuing controversy over return on equity.
Regulated utilities are all too familiar with the contentious disputes that surround how the allowed return on equity (ROE) is set in a traditional cost-of-service setting. These disputes, which are reappearing as numerous utility rate-stabilization plans signed as part of deregulation come to an end, are likely to hinge, as always, on the riskiness of utility operating environments.
Perspective
Commission policies need to recognize customer obligations and state commission decisions.
Even the best of intentions can create unintended consequences. The Federal Energy Regulatory Commission (FERC) has acted aggressively and appropriately during the past few years to stimulate competitive wholesale electricity markets.
People
New Opportunities:
Stephan T. Haynes, who has been American Electric Power's vice president of risk oversight since January 2002, was named vice president of corporate finance for the company.
Kay G. Priestly was named Entergy Corp.'s vice president of financial issues management. Priestly earlier was managing partner at Arthur Andersen.
Frontlines
Critics say FERC's filed rate doctrine is wrong for the times.
It's quite remarkable how the Federal Energy Regulatory Commission (FERC) has been able to pound a square peg into a round hole. With not much more than a wink and a smile, FERC has taken a depression-era law meant for monopolies-the Federal Power Act (FPA)-and has made it serve double duty as a foundation for competitive power markets.