Marginal Utility

Changing the Electric Utility Financial Paradigm

Global capital markets have accommodated the industry with low interest rates and high stock price multiples, but capital markets are fickle. Electrics will be capitalized more like other industrial companies, and less like regulated monopolies.

Preparing for the Inevitable

New Approach to Recovery from Catastrophic Losses of Grid Facilities

How to adequately prepare for recovery from catastrophic losses: Doing nothing may minimize cost in the short run, but it leaves electricity customers exposed to the risk of extended outages. At the other extreme, having each utility purchase its own dedicated inventory of critical equipment would be duplicative and prohibitively expensive for utility customers. A shared inventory model offers a sensible middle-ground approach.

Beware of Vertical Arrangements for Gas Procurement

Owning gas reserves benefits consumers?

Regulators should start with the premise that long-term contracting with an independent gas producer or middleman is preferable (e.g., with a marketer). Vertical arrangements pose a number of tough questions for state public utility regulators.

Chasing the Uncatchable

Why trying to fix mandatory capacity markets is like trying to win a game of Whack-A-Mole (Parts I & II)

FERC has little to show for more than a decade of tinkering with mandatory capacity markets.

A Five-Point Plan For The Next Wave Of Electricity Restructuring

The monopoly utility model was once expansive and revolutionary. Now, it is contracting and preservationist.

A plan for restructuring: Delivery service pricing reform; devolution of generation and re-allocating risk; stranded cost recovery; distributed resources neutrality; optimization of service offerings.

FERC Chasing the Uncatchable

Trying to fix mandatory capacity markets like trying to win whack-a-mole, Part I

FERC’s efforts to get capacity markets “right” have led to endless – and futile – tinkering. The cure proposed – making capacity auction markets mandatory – has unfortunately proved far worse than the disease.

Consumers Want What?

Rather than accept the rhetoric, let’s find out.

What’s missing is asking consumers to consider realistic tradeoffs between two characteristics of electricity rather than the desirability of a single characteristic in isolation.

Waverly Labs and the Energy Production Infrastructure Center Quantify Digital Risks for Power Grids

Waverley Labs and the Energy Production and Infrastructure Center (EPIC) developed a risk management solution based upon a research and technology collaboration focused on modeling relationships between cyber-attacks and the electric and physical infrastructures associated with the power grid. During the past year, researchers in EPIC’s Duke Energy Smart Grid Laboratory working with Waverley Labs conducted a systematic analysis of risks and associated threats to power transmission systems to identify critical points of failure.