Is electricity price-elastic enough for rate designs to matter?
Contrary to conventional wisdom, electricity demand isn’t immune to price elasticity, and rate designs can encourage conservation. In particular, inclining block rates coupled with dynamic pricing can cut electric use by as much as 20 percent.
Volatile markets create investment openings.
(June 2008) As fossil fuel prices continue increasing and alternative energy gathers momentum, the energy and utility industries can expect to see continued interest from private-equity firms. Over the last five years, record levels of private-equity investments have been used to buy power plants, as well as other utility assets and energy product manufacturing facilities. These once-overlooked industries suddenly are hotspots for private-equity investment.
By abandoning R&D and marketing, the gas industry may have sealed its own fate.
Gas producers and utilities have all but abandoned R&D and marketing. Is it too late to reverse the death spiral, or can the industry learn from other check-off marketing successes?
Armed with calls for gas price transparency, FERC takes aim at intrastate pipelines—the long-forgotten and largely private preserve of the Lone Star State.
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.
Why predictions from the Energy Information Administration may contain systematic errors.
Natural-gas estimates from the Energy Information Administration (EIA) are supposed to be “policy neutral.” Are they? Over the past decade, EIA forecasts for NG differ substantially from actual outcomes—even though overestimations of supply capabilities could lead to underestimating the costs of carbon regulations.
FERC issues a surprising order regarding responsibility for LNG-related retrofit costs.
The answer to the question of who will be responsible for cost-mitigation measures to accommodate the introduction of large quantities of LNG into the U.S. pipeline grid remains up in the air for now, but there are signs pointing in one particular direction: toward ratepayers.
Price caps, secondary markets, and the revolution in natural-gas portfolio management.
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?
Billions in new revenue could be realized early in the transition.
In a hydrogen-electric economy, power companies could see very large market opportunities—and play a major role in enabling and accelerating implementation.
Has restructuring succeeded on either continent?
The era of polemics about electric competition is nearly over. It’s time to compare the relative performance of competition and traditional regulation as these two established models operate side-by-side.
Part 1 of a 2-part article explores new technologies most likely to influence competitive success.
When fighter pilots list the advantages of one combat aircraft over another, they do not speak primarily of speed. Rather, they refer to the ability of one aircraft to “turn inside” another, to negate other aspects of performance with a superior turning radius. For the utility industry, fundamental changes in technology, markets, or regulatory requirements can “turn inside” the ability of companies to respond, as long-lived investments and choice of fuels lock them into their strategic choices for decades. This article proposes ways for utility leaders to understand strategic risk better and manage it more effectively.