Commission Watch

Exelon's Epic End Game

Electric M&A: The merger with PSE&G may herald a new industry structure, squarely at odds with regional markets.

The marriage between Exelon and PSEG would create the largest electric utility in the United States. The policy implications could loom even larger, however. Standing at risk is nothing less than FERC’s entire regulatory regime for approval of mergers and market-based rates.

Byline:

Bruce W. Radford

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Gas Transport Rates: A Puzzling Prospect

Why does FERC want to limit pipeline discounts?

It's certainly puzzling, if not downright peculiar. That's the feeling one gets after studying the notice of inquiry (NOI) that FERC launched late last year, after nearly 10 years of dragging its feet, to re-examine the wisdom of encouraging the practice of rate discounting by interstate natural gas pipelines.

Byline:

Bruce W. Radford

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Alaskan Gas Development: One Pipeline, Two Systems

FERC may have to carve out a special set of rules if it wants to bring Arctic gas south to the lower-48.

When President Bush signed the Alaska Natural Gas Pipeline Act of 2004, one might have thought that North Slope gas was on the fast track. With all the special provisions that Congress has added to the bill, the reality may prove otherwise.

Byline:

Bruce W. Radford

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LICAP and Its Lessons: A Kink in the Curve

Doubts intensify over New England’s radical new market for electric capacity.

What began nearly two years ago as a simple request by power producers to boost their chances for recovering fixed costs for several power plants in Connecticut has mushroomed into the single most complicated case now pending before FERC.

Byline:

Bruce W. Radford

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PJM/Midwest Market: Two Rival Groups Battle Over Grid Pricing

Should transmission owners get paid extra for distance and voltage?

While the Midwest now appears set on competitive bidding for the electricity commodity, taking from PJM such tried-and-true elements as locational marginal pricing, financial transmission rights, and a day-ahead market with a security-constrained dispatch, the region remains split over the pricing of transmission.

Byline:

Bruce Radford

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RTOs: The Creditworthiness Conundrum

IOUs, RTOs duke it out over standardization.

Have regional transmission operators (RTOs) and independent system operators (ISOs) asked for excessive levels of credit from customers? The Federal Energy Regulatory Commission (FERC) must face that difficult question as it investigates whether to institute a rulemaking on credit-related issues for service provided by ISOs, RTOs, and transmission providers.

Byline:

Lori A. Burkhart

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A Market-Access Plan for Vertically Integrated Utilities

Assimilating the best of the regulated-utility and merchant models.

We propose a market-access plan (MAP) that does not advocate sweeping changes. It instead builds on existing VIU frameworks with structural improvements that are technically feasible, cost-effective, and politically practicable. The result assimilates the best of the VIU and merchant models; benefits the industry investment climate; increases the level of low-cost, efficient, and environmentally friendly power supplies; and promises to save customers millions of dollars.

Byline:

Larry Eisenstat, Pat Alexander, and Don Gelinas

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ROE: The Gorilla Is Still at the Door

Incentive regulation is not a cure-all for the continuing controversy over return on equity.

Incentive regulation can provide benefits both to utility shareholders and customers by encouraging greater efficiency. But even if incentive regulation supplants traditional COS regulation, regulators and utilities still will need to confront the same basic ROE questions that have vexed both for many years. Because the base ROE under incentive regulation will be an integral part of the incentive structure itself, it ought not to be done as an afterthought. The approach described here is one way to address this important issue.

Byline:

Jonathan A. Lesser

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