The D.C. Circuit once observed that the Mobile-Sierra doctrine is “refreshingly simple.” In fact, however, the doctrine has become incredibly nuanced and complex over time. In two concurrently issued decisions, the court has discovered new prerequisites to the initial application of the doctrine, changed the independent “public interest” review standard into a presumption, and has jettisoned that presumption entirely when contract prices are too high as opposed to too low.

Does the volatility of the customer’s energy cost create much concern regarding the impact on the customer’s core business? One customer may be very comfortable taking on significant electricity cost risk to obtain electricity price and subsequent bill concessions. Another may be willing and anxious to pay a premium to accept less electricity cost risk than normal. Both of these customers, and all the customers in between, should be offered products that fit their needs, and these products should be priced upon sound risk fundamentals.

The Dow Jones Utilities Index posted another year of solid gains in 2006. As might be expected, in connection with both the near-term and longer-term historical investor performance of the utility sector, there’s a story within the story. Further, this performance history provides a context against which the impact of both current and emerging issues can be assessed.

A 2007 law essentially prohibits California utilities from signing long-term contracts for power, including those from out of state, unless they emit less than 1,000 pounds of CO₂/MWh of electricity produced. While the law does not specifically bar coal-fired generation, the limit is set low enough to rule out all coal-power plants. A modern, highly efficient natural gas-fired plant barely would qualify. These measures, plus the new carbon-cap law going into effect by 2012, have sent utilities—large and small, private as well as municipal or city-owned—into a frenzy as they scramble to find alternatives to coal to meet their future demand.

He was quite literally the toast of last year’s EEI Finance conference. Using his bank’s diverse resources (Rothschild vineyards in France), he arranged an unforgettable wine tasting that was a big hit with utility executives. Roger Wood, the head of Rothschild’s Power & Utilities Group in North America, is one of the few true white knights on Wall Street. Whereas many banks have developed businesses that can conflict with their utility clients’ interests, Wood says Rothschild’s bankers “live and die by providing long-term independent advice.”

(March 2007) Constellation Energy named Kevin W. Hadlock vice president, investor relations, and Robert L. Gould vice president, corporate communications. Subsidiary Constellation NewEnergy appointed Emily Neill as business development manager. Dynegy Inc. announced several organizational changes related to the company’s proposed combination with LS Power. Robert W. Best, chairman, president, and CEO of Atmos Energy Corp., was elected chairman of the American Gas Foundation’s board of trustees for 2007. And others...

Is it possible to go back to the way things were? Nostalgia for the old regulated model seems to be waxing of late, particularly in Virginia. The 70-percent rate increases in Maryland last year at the expiration of price caps—part of the transition to electric competition—has become the calamity that some state regulators fear most. Several utilities are pushing for re-regulation.

The news coming from across the Pacific Ocean over the past year seemed familiar, if at times puzzling. New Zealand’s energy minister, caught in a political faux-pas, hastily resigns—only to be reinstated a few weeks later. Concerns about inadequate power supplies and below-average hydroelectric storage are downplayed by government regulators. Then, a harsh winter wind storm triggers a transmission failure that blacks out the major city of Auckland. What to make of all this turmoil in New Zealand’s energy industry?

John D. Chandley, Principal, LECG LLC: Bruce Radford’s “An Inconvenient Fact” provides a helpful critique of a fundamental element of open-access transmission reform, one of the most important rulemaking cases affecting electricity regulation at FERC.

Cynthia Bogorad, Spiegel & McDiarmid, Washington: From my perspective representing transmission-dependent utilities, I am very sympathetic to the underlying concerns that appear to be driving the TDAs’ proposal. However, the TDAs’ proposal is not the answer.