US Power Generating (USPG) entered into a definitive agreement and plan of merger with Tenaska Capital Management (TCM). Pursuant to the terms of the agreement, USPG will become a wholly-owned indirect subsidiary of TCM. Under the terms of the merger, TCM will purchase USPG, with the final price being determined by a number of business and tax adjustments. Consummation of the merger is subject to customary conditions including approvals of the Federal Energy Regulatory Commission and the New York Public Service Commission.
New York Public Service Commission
Finding that the proposed deal will bring “significant, tangible benefits” to jurisdictional ratepayers, the New York Public Service Commission approved the acquisition of CH Energy Group Inc. by Newfoundland-based Fortis Inc. CH Energy Group is the parent company of Central Hudson Gas & Electric Corporation, while Fortis is a utilities holding company with numerous subsidiaries and assets throughout Canada, Central America, and the Caribbean.
The New York Public Service Commission increased each utility’s system-wide net metering limits for solar photovoltaic projects, farm anaerobic digestion facilities, small hydro micro combined heat and power projects, and fuel cells. As modified, the cap was raised from the current one percent of system peak load to three percent. The commission deemed it expedient to increase the net metering limits so as to accommodate the anticipated increase in demand as more solar projects are installed.
The New York Public Service Commission announced that it has approved moving $32 million in funds from Renewable Portfolio Standard (RPS) allocations to support the state’s call to increase development of solar power. The commission concomitantly authorized reallocation of $2 million in existing funding for competitive solar programs from downstate to upstate projects to meet current market demand. According to the commission, the program has been successful in promoting larger PV systems that could not economically compete in a statewide bidding program.
Forecasting the geographic distribution of demand reductions. Copyright © 2011 Consolidated Edison Company of New York, Inc.
As new energy efficiency programs proliferate, regulators increasingly will seek to use the associated demand reductions to reduce capital expenditures on new transmission and distribution assets. However, forecasting the expected geographic distribution of these demand reductions within the grid and integrating this information into a utility’s capital planning process is a challenging task.
Rational estimates lead to reasonable valuations.
When regulators grant changes to utility rates of return, they estimate growth on the basis of gross domestic product (GDP). But do utilities have any chance of growing at the same pace as GDP? The answer is no — with huge consequences for utilities and their consumers. With equity costs outpacing allowed rates of return, utilities aren’t being valued correctly. As a result, the industry risks falling behind other sectors in terms of infrastructure investments and technology innovation.
Balancing risks and opportunities in efficiency investments.
In June 2008, the New York Public Service Commission (PSC) established the electric energy-efficiency portfolio standards for New York’s investor-owned utilities. In its order, the PSC directed utilities to file three-year energy-efficiency plans. Later that year, the PSC issued a supplemental order approving shareholder incentives for utilities successfully implementing their portfolios. If all goes according to plan, the six affected IOUs stand to earn about $27 million annually in performance incentives over three years. The structure of the incentive mechanism approved by the PSC presents risk factors that might affect utilities’ ability to realize the full earning potentials the mechanism offers.
Volatile economic conditions push regulators in new directions.
(November 2009) Regulators are in the unenviable position of determining an allowance for ROE that’s fair to consumers and investors in a volatile economy. The cases that stand out this year are those in which regulators explored the limits of their discretion.
The economy forces tough decisions.
The economy has put state commissioners and regulated utilities in precarious positions. Seven state chairmen explain how they’re applying fair rate treatment.
Vendors battle it out while utilities await common communications protocols.
Uncertainties about smart metering goals are hindering efforts to standardize communications protocols and feature sets. While vendors battle over standards, utilities and policy makers are moving forward anyway—despite the potential for setbacks.