Defining a test period to overcome controversies and inaccuracies.
Test-period and test-year selection continue to generate controversy in rate cases. Examples from Utah provide insight on the difficulties of forecasting and with judging test periods.
Capacity planning for the smart grid.
The one-day-in-10-years criterion for capacity planning is coming under scrutiny. Making the most of the smart grid and demand management requires a less conservative approach. Markets and prices rather than administrative rules will ensure resource adequacy in a more efficient way.
Get ready for fundamental changes.
In almost all business and non-profit environments, change is occurring at an accelerating pace. In the electric industry—which used to be stable—we are seeing major changes too. Utilities face growing ambiguity as well as increasing paces of change, uncertainty and complexity. As Irene Sanders stated in Strategic Thinking and the New Science, “[t]hat the future will be different from today is given. What we struggle with is our desire to know how it will be different and what we can do to influence it.”1
Small is beautiful for nuclear developers.
Small modular reactors (SMRs) are nuclear generating units that are about the size of railroad cars and provide about one-tenth to one-fourth the power of full-size reactors. As a result, they cost a fraction of what full-size reactors cost. The reactors are designed to provide between 40 MW and 300 MW of electric power, compared with the 1,100 to 1,700 MW output of larger reactors. In addition, most are expected to cost under $1 billion, compared with the $5 billion to $10 billion price tags of the larger units.
Whistleblowing case has ramifications for an entire industry.
Should whistleblower-protection provisions of the federal Energy Reorganization Act protect an employee of a small firm that has a staff augmentation contract with a regulated nuclear energy technology company? The battle of the briefs has been blazing in a federal case set to answer that question.
The ZigBee Alliance and the Wi-Fi Alliance entered an agreement to collaborate on wireless home area networks (HAN) for smart-grid applications. The initial focus of the collaboration will be ZigBeeSmart Energy Profile 2.0, which is the next-generation energy management protocol for smart grid-enabled homes based on today’s successful ZigBeeSmart Energy Profile. The ZigBeeSmart Energy Profile 2.0 is expected to be extended to operate over Wi-Fi technology as a result of the collaboration.
(May 2010)
Wind faces a nano-scale threat.
For decades now, wind turbines have been generating electricity more cheaply than most other (non-hydro) renewable energy technologies. In particular, wind has maintained a comfortable lead over solar energy in the price-per-kWh race. That’s destined to change.
Why similar U.S and Canadian risk profiles yield varied rate-making results.
Cost of capital is often a contentious issue in utility ratemaking. This is due, in part, to the inexact nature of the tools available to financial analysts and the considerable room for divergent opinions on key inputs to cost-of-capital estimation. Perhaps for this very reason, and to achieve regulatory efficiency, Canadian regulators widely adopted a formulaic approach to setting return on equity (ROE). However, an unusual degree of rancor has evolved north of the border as allowed ROEs in Canada, once at parity, have fallen near 200-basis points below their U.S. peers.