Experts debate whether Bush’s Clear Skies plan on power plant emissions clears the way for better emissions technologies.
FOILING EXPECTATIONS OF BOTH SUPPORTERS AND detractors, the Clinton Administration's proposed electric restructuring legislation offered no new policy on carbon-dioxide emissions, such as a cap-and-trade program similar to that already in place for sulfur dioxide.
But don't breath a sigh of relief. The debate has only begun.
Many observers see the Administration's tactics on CO2 as an obvious attempt to sidestep a highly sensitive political issue. They appear to agree that at some point the Administration must confront CO2 emissions.
LAST YEAR, IN JUSTIFYING THE PROPOSED NEW NATIONAL AMBIENT Air Quality Standards (NAAQS) for particulate matter and ozone, Environmental Protection Agency Administrator Carol Browner testified that: "During the 1990 debates on the Clean Air Act's acid rain program, industry initially projected the costs of an emission allowance¼ to be approximately $1,500¼ Today those allowances are selling for less than $100." %n1%n
Later in 1997, at the White House briefing announcing President Clinton's Global Climate Change Plan, Katie McGinty, chairwoman of the Council on Environmental Quality, sa
HOW DO CUSTOMERS RESPOND TO REAL-TIME PRICING?
Even when the customer is a commercial or industrial organization, the answer can prove illusive.
Real-life responses to RTP depend on the entirety of the incentive and monitoring systems, group dynamics and individual personalities. Managers within an organization respond to RTP signals based on information and incentives that only they can know and comprehend. Only people employed by the organization are privy to these intangibles, which remain highly idiosyncratic within any organization.
All three may apply, especially if regulators go wrong and let ISOs make the business decisions.
Electricity transmission is a real business. With more than $50 billion of net plant, another $3 billion annually in capital expenditures and yearly operating income that could reach $5 billion per year under normal circumstances, the power grid is roughly twice the size of the natural gas pipeline industry. One would never know that from current events, however. Utility management treats transmission as an inconvenient stepchild.
The overwhelming impression is one of growth (em in volume and in the number of participants.
The early 1990s was an anxious period for advocates of emissions trading. Concerns about whether the sulfur dioxide allowance market would ever develop tempered the heady success of the first national emissions trading program implemented by the Environmental Protection Agency under the Clean Air Act Amendments of 1990, Title IV. These concerns were heightened when in May 1992, Wisconsin Power & Light traded 10,000 allowances to the Tennessee Valley Authority.
Identifying a core competency is not as easy as it seems.
Utilities have developed a "Gold Rush" mentality. That is, they have begun to chase after the latest (em and sometimes fleeting (em opportunities, often abandoning their roots and their long-held strengths in the process. Supposedly, this first-in-market race will allow traditional utilities to remain competitive. Yet, all this racing has caused strong regional players to enter markets blindly, without the competitive knowledge or strategic underpinnings that will allow them to succeed in the long term.
Too many rules can make any plant uncompetitive.
Now, more than ever, the commission must weigh
the costs when it looks at health and safety, decommissioning and antitrust impacts. Nuclear assets seem to pop to the surface wherever one looks for causes behind the current upheaval in the U.S. electric utility industry. The nuclear experience (em with its costly prudence reviews so prevalent during the 1980s (em has helped fuel a major shift in attitude.
Senior utility managers have now come to accept fundamental changes in the electric industry.
More than a decade ago, working at the energy laboratory at the Massachusetts Institute of Technology, the late Fred Schweppe devised a novel scheme for pricing electric transmission. His solution? Do nothing. Simply ignore transmission.
Lawyers for the Massachusetts Institute of Technology on Feb. 4 argued before the Massachusetts Supreme Court that their client should not be made to pay $6 million to Cambridge Electric Light Co. to cover stranded costs for building its own $50 million on-campus generating plant, as directed by the state utility commission. MIT said it would never have built the plant had it known about the fee. A ruling is expected in the spring.