Energy Policy Act of 2005

The NERC CIP standards represent an historic achievement. They include the first mandatory cyber security requirements of their kind to be imposed on a U.S. private-sector industry. Considering the scope and sensitivity of the grid-security issue, developing a set of enforceable standards inevitably would entail a complex and contentious process. From that perspective, NERC, FERC and the industry have made remarkable progress, and their efforts deserve accolades.

U.S. power-plant construction tends to follow fads. Identifying these trends is easier than determining the primary drivers and issues that contributed to them. Understanding how these drivers affect power-planning decisions can help utilities predict generation-construction trends in the future and avoid getting caught in a group-think trap.

The evidence is overwhelming: After a decade of relatively stable, or even declining, construction costs, the industry is now facing a prolonged period of elevated construction price tags. What are the causes behind this trend, and how might the cost increases translate into higher rates?

Traditionally, utility shareholders and their utilities have a bias toward supply-side resources as opposed to demand-side reduction programs. Reductions in demand may result in excess supply-side resources that are likely to be excluded from rate base because they do not meet the “used and useful” standard. However, there is a solution: Allow energy utilities to benefit from earnings rewards for demand-side reduction. From an earnings perspective, such a solution would place demand-side alternatives on par with supply-side projects.

As many states move toward re-regulation, we speak to commissioners in Illinois, Missouri, Pennsylvania, Texas, and Virginia to learn how policies are evolving—and how far the regulatory shakeup will go

Federal Energy Regulatory Commission (FERC) has proposed to bring a modicum of federal oversight to the nation’s intrastate natural-gas pipelines. Given the historical structure and regulation of the nation’s natural-gas industry, it should come as no surprise that FERC’s proposal has polarized the industry in general and the state of Texas in particular.

The Northeast energy markets are working hard to establish new levels of regional coordination and cooperation. The region’s concerted effort is essential to resolving some of the industry’s toughest issues since the individual markets evolved. These issues include the elimination, reduction, or bridging of seams issues that prevent the economic transfer of capacity and energy between neighboring wholesale electricity markets, or control areas, as a result of incompatible market rules or designs.

The Energy Policy Act of 2005 was supposed to streamline the siting process and provide a federal “trump card” for projects delayed at the local level, but it is far from clear whether these goals have been, or will be, achieved.

The fact that FERC actually released an advance notice of proposed rulemaking in late June, on competitive markets of all subjects, has many in disbelief.

When FERC decided in February, in Order 890, to lift the price cap for electric-transmission customers seeking to resell their grid capacity rights in the secondary market, it cautioned against expecting a quid pro quo for gas. Was the commission just teasing?