Should an LDC procure electricity hedge products by using an Internet-based auction?

We propose that local distribution companies (LDCs) should use an Internet-based auction to procure inactively traded products, because the auction is a superior alternative to common procurement methods, such as bilateral negotiation and request for offers (RFO). Supporting our proposal is the empirical evidence from two auctions recently held by a municipal utility in Florida.

Green Generation Feels the Squeeze

 

 

Pension Plans May Slow Utility Growth in 2003

 

 

The economic downturn is increasing utility pension plan costs and liabilities.

While 401(k) stock option plans have increasingly displaced traditional pension plans in corporate America, many mature firms like electric utilities are still administering sizeable pension plans that in the recent economic downturn could compromise future earnings, according to a report by investment bank CIBC World Markets (CIBC).

Planned or Private?

 

 

Fortnightly: A New Frontier

Presenting a new look and new editorial content for 2003.

In this Jan. 1, 2003, issue, Public Utilities Fortnightly magazine takes pause in this column from its energy industry commentary to tell readers about several important developments at the magazine.

Regulatory and market forces put the pressure on information technology to perform.

Technology isn't in the driver's seat at some energy companies, but it's not as if those companies have reverted to using typewriters, carbons and rotary dial phones. In fact, it's beyond dispute that information technology (IT), in particular, can improve business performance-and nothing is more important to energy companies right now. But with slashed budgets and collapsing credit ratings, how should energy companies spend their precious IT dollars?

Looking beyond ranking utilities on price.

It's tempting to compare rates between utilities- to use those simple rankings as regulatory carrots and sticks-but those who do may play a dangerous game. While such rankings may appear compelling, they can add an inappropriate bias to the regulatory process and penalize well-performing electric utilities that operate in high-cost service territories, such as large metropolitan areas.

FERC's Standard Market Design: Too Detailed To Evolve

The Federal Energy Regulatory Commission's standard market design (SMD) proposal states objectives that are important and supportable, both theoretically and empirically. Uniform rules and business practices reduce transaction costs and limit opportunities for institutional arbitrage, increase the extent of the market, and increase market liquidity and investment.