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Fortnightly Magazine - April 2008

Flying Through Turbulence

Volatile markets are causing delays, but most deals are moving forward.

Although problems in the power business grabbed the headlines early this decade, the industry now seems fundamentally strong. In contrast to their ratings of banks, rating agencies appear to have recently upgraded more of the electric sector than they have downgraded. It remains a strong investment grade, usually BB or BBB. For an index of 68 electric utilities, the debt-to-equity ratio averaged only 55:45 and return on equity exceeded over 13 percent through January.

Byline: 

Jeff Bodington

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Storage Surge

New gas projects help globalize the U.S. market.

Underground storage allows gas users and traders to hedge against price volatility. Building more capacity will help North America fully integrate into global gas markets.

Byline: 

Lee Van Atta

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Facing Compliance Risks

Enforcement trends call for a proactive approach to complying with market rules.

Federal regulators have penalized wholesale energy market participants with fines ranging from $300 thousand to $300 million over the past two years. The magnitude of the penalties, along with uncertainty over how to effectively mitigate the risk of any civil action by regulators, has raised concern about how companies are approaching their regulatory obligations.

Byline: 

Howard Friedman

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Selling the Smart Grid

Special report on public support for smart metering and demand response.

Smart metering is entering the public consciousness. But gaining support from consumers is tricky business, as evidenced by the recent backlash in California. Customers will accept dynamic pricing and demand-response capabilities only if regulators and utilities take a soft-sell approach.

Byline: 

Michael T. Burr, Bruce W. Radford and Scott M. Gawlicki

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Selling the Smart Grid - The Backlash

California learns painful lessons from its proposal to mandate demand response.

When the California Energy Commission (CEC) proposed to include programmable communicating thermostats in the state’s new building codes, it expected some push-back from home builders. It didn’t expect what it got: a major public outcry.

Byline: 

Michael T. Burr

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Selling the Smart Grid - The Policy

Why many state regulators still have qualms about endorsing smart meters.

A year ago, in its formal investigation of state policy on smart meters, the Florida Public Service Commission conceded that while three of the state’s five major investor-owned electric utilities offered an optional time-of-use rate to residential customers, participation in fact remained “typically quite small,” averaging only about 1 percent.

Byline: 

Bruce W. Radford

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Selling the Smart Grid - The Pitch

Two utilities win customer support for dynamic pricing and demand response.

If the recent backlash against California’s proposed new building codes proves anything, it’s that ratepayers won’t buy into the smart-metering concept by themselves. The industry will have to sell it. How then should electric utilities, municipals and cooperatives go about introducing smart grid technologies? Two major utilities—Public Service Electric & Gas (PSE&G) and Southern California Edison—are in the early stages of doing just that

Byline: 

Scott M. Gawlicki

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The Late Great Gas Utility

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?

Byline: 

Richard Kolodziej

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Storm of the Decade

Process changes prepare ComEd to recover quickly from disastrous storm and flood.

Sometimes a bad storm provides the best training ground for a truly terrible storm. An outage in 2006 taught ComEd lessons that helped it recover quickly from the floods of 2007.

Byline: 

Greg Kiraly

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Snake Oil & Smart Meters

Customers deserve the straight truth about electricity costs.

The utility industry faces the difficult task of trying to educate the general public about the realities of delivering electricity service in the 21st century. California’s recent experience trying to put smart thermostats into the state’s building code provides a cautionary example.

Byline: 

Michael T. Burr, Editor-in-Chief

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