How to find a future that works.
Dealing with unfunded mandates in performance-based ratemaking.
Many states have implemented decoupled rate regimes to avoid penalizing utilities for conservation efforts. But ensuring appropriate recovery of costs involved with conservation and green energy requires a careful approach. Cost sharing mechanisms balance the interests of utilities and customers — and provide incentives to invest.
There’s no magic in dollar cost averaging.
Dollar-cost averaging has gained favor as a technique for hedging fuel-price risks. But hidden costs might outweigh the savings, leaving utilities exposed to volatile markets.
Can utilities put EV batteries in the rate base?
Thomas Edison once hoped to make a fortune in the auto business—selling electric cars. Of course it never happened; he and Henry Ford tried and failed to bring a low-cost electric car to market. They scuttled the project after investing $1.5 million toward the effort—more than $32 million in today’s dollars. Edison’s nickel-iron batteries just couldn't match the performance of Ford’s petrol-powered bang-bang.
Recent years have seen fundamental changes in the supply and competitive landscape of the North American natural gas market. In response to high natural gas prices that prevailed during most of the last decade, gas producers in the lower 48 now have developed new sources of supply and technology, particularly to access new shale gas formations. These new supplies have encouraged a substantial expansion of the natural gas pipeline network in North America to allow the producers to reach end-use markets.
Decommissioning and remediation of coal- and oil-fired plants.
As new EPA regulations drive companies to decommission older power plants, utilities face issues involving plant retirement and demolition. Some sites can host new power plants, but many can be better used for other commercial purposes. Thoughtful planning and decommissioning strategies can bring the greatest value from underutilized assets.
Incentives, staffing, and benchmarking in a tight economy.
In several recent utility rate cases, regulators have disallowed portions of utility compensation expenses, on the basis that difficult local economic conditions justify pay cuts. However, when utilities begin squeezing their uniquely qualified technical and management staffs, performance can suffer. Analysis Group authors David W. Sosa and Virginia Perry-Failor review experiences at several companies to show how an evidentiary approach will help utilities avoid disallowances of critical compensation for valued employees.
The debate about freeridership in energy efficiency isn’t wrong, but it is wrongheaded.
In any conservation or efficiency program, some market participants will reap benefits without paying their share of the costs—i.e., the “freerider” problem. Some freeriders are unavoidable and generally not a problem. But as Cadmus Group analysts Hossein Haeri and M. Sami Khawaja explain, avoiding excessive freeridership requires careful program structuring, as well as ongoing measurement to accurately evaluate outcomes.
FORTNIGHTLY What’s Xcel Energy’s role in the CAPX2020 project, and how does it fit into the company’s overall transmission plan and resource plan?
MOGENSEN CAPX2020 is very important for Xcel and the region.
Adding up the benefits of infrastructure investments.
Allocating the costs of new transmission investments requires accurately assessing the value of those new lines, and identifying the primary beneficiaries. But formulaic approaches rely too much on the most easily quantified cost savings, and reject benefits that are dispersed across service areas—or that might change over the course of time. Brattle Group analysts J.P. Pfeifenberger and D. Hou explain that comprehensive valuation produces a more accurate picture.