Fortnightly Magazine - February 2006

Encore for Negawatts?

Congress renews PURPA’s call for conservation and load management, but the world has changed since the 1970s.

The “N-word” in the title first appeared in this journal more than 20 years ago, courtesy of the celebrated environmentalist Amory Lovins and his widely quoted piece, “Saving Gigabucks with Negawatts” (Fortnightly, 1985). Scroll forward a few decades. With restructuring of wholesale electric markets at FERC, plus formation of regional transmission organizations and independent system operators, the game was changed.

China's Quest for Energy

Cooperation and coordination will help the United States avoid an energy-policy confrontation.

China is seeking to acquire resources and infrastructure from all over the world, from the oil fields of Venezuela to new shipyards for building liquefied natural gas tankers in Shanghai. But the country’s acquisition pattern puts it on a collision course with the United States and the rest of the world.

Rate-Case Mania: Lessons for a New Generation

This overview of ratemaking and rate-design principles should ease the myriad tasks awaiting new rate analysts and attorneys, while provoking nostalgia among industry veterans still manning the ratemaking stations.

Natural-Gas Procurement: A Hard Look at Incentive Mechanisms

Better designs are needed to realize the goal of lower-cost gas.

A gas procurement incentive mechanism that provides strong incentives for a broad range of procurement-related costs and revenues, using a benchmark that is both exogenous and adaptive to external circumstances, can benefit consumers.

Nuclear Power: A Second Coming?

Here’s what’s driving the renaissance.

Nine companies, consortia, or joint ventures are planning approximately 12 new nuclear power plants in the United States. How do the business challenges they face differ from the challenges faced by companies using other fuel sources?

Synchronizing on West Point

Could local generators be used either to regulate voltage or control the power factor on distribution systems in New York?

Reactive power is becoming a hot issue in many regions of the country. Regulators and grid operators are grappling with ways to account fairly for reactive power supplies, and to encourage such resources to come online where they are needed. These analyses, however, are largely ignoring a vast fleet of infrastructure already installed on the network. West Point military academy, for example, has four small synchronous generators that are used for combined heat and power or emergency power applications. If these generators also were used as synchronous condensers, they might supply additional revenue to pay for the distributed energy investment.

People

(February 2006) Mirant announced that Robert M. Edgell would be appointed executive vice president and U.S. region head. The Southern California Edison board of directors elected James T. Reilly vice president of nuclear engineering and technical services for the San Onofre Nuclear Generating Station. KeySpan Corp.’s board of directors appointed Stephen W. McKessy lead director. Richard C. (Dick) Kelly was elected chairman of Xcel Energy Inc.’s board of directors. And others...

Letter to the Editor

Jacob Williams, VP Generation Development, Peabody Energy: While transmission built to “compete” with generation capacity is an interesting notion, it generally misses the real value of transmission. In today’s high energy-price world, delivering “affordable” energy to consumers is very important. I believe we need higher standards in the electricity market similar to transportation, where we value reliability and affordability (time).

A Constellation Of Risks

Will the deal with FPL serve the best interests of ratepayers? 

Even as many hope that repeal of the Public Utility Holding Company Act (PUHCA) will lead to more efficient and rational corporate structures, they also fear that repeal could foster irrational exuberance, with mergers that fail spectacularly. Maybe that explains why every new utility merger announcement is being met with a much higher level of scrutiny than in past decades.

Are We Making Any Money Yet?

Measures of generator unit performance are uncertain.

The news is full of stories about Calpine and the difficulty merchant generation players face from the uncertainty and volatility of power markets. Now is a good time to review key measures of performance and profitability under uncertain conditions.

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