LDCs: That Giant Sucking Sound
The consequences of short-sighted rate making.
Gas utilities and state commissions must work together to help preserve rates of return, encourage conservation, and lower customers’ bills.
Pipelines: Are Regulators in for the Long Haul?
An economic perspective on long-term contracting for gas pipeline service.
Natural-gas pipelines are among the biggest supporters of long-term contracting for services, as they try to make life easier for themselves. But the time has come to re-examine the pros and cons of such contracts.
Breaking the Gridlock
A proposal to remove the bottlenecks on grid investment.
The lack of transmission investment transcends the usual culprits, pointing to a serious flaw in market structure.
Capacity Planning: The Good, the Bad, and the Ugly
Market-Power Tests: A review of FERC’s market-based rate (MBR) screens, from theory to application.
FERC’s market-power screens have been tested and found wanting in some areas. The author examines the screens’ strengths and weaknesses, then proposes future solutions.
Transcos Reborn
Recent attrition raises the question: Consolidation or death spiral?
Despite some setbacks, the transco business might be ready to turn the corner toward a new phase of growth. Will the remaining barriers roll away and allow the industry to grow beyond three companies?
BGS Auctions: What Price Is Right?
How to price new load-servicing contracts while incorporating market-risk analysis into such deals.
Why have basic generation service auctions historically been overly competitive given the prevailing market prices at the time? Here are four steps to determine correctly what should the bid price should be.
The Hazards of ElectroMagnetic Terrorism
And why North American power plants should take note.
Electromagnetic terrorism has huge implications for the international power industry. The North American electric power network is vulnerable to electronic intrusions launched from anywhere in the world, according to studies by the White House, FBI, IEEE, North American Electric Reliability Council (NERC), and National Security Telecommunications Advisory Committee (NSTAC). Is there a solution for this situation?
Going to the Bank
Financial buyers are snapping up power plants faster than at any time in history. The asset shift represents an interim step in a wholesale-market transformation.
A dam broke last year, releasing a wave that even now is spreading through the U.S. power industry. Deals that had been languishing on the auction block for months suddenly surged forward in 2004, and assets began changing ownership at a torrential pace. Understanding what this means for the power industry requires a long-term perspective on wholesale-market trends.
Reliability Wars
Power System Planning: Who gets paid (and how much) for backing up the system?
“Confining transmission projects to FTR payments is like confining generators to energy-only payments,” says Ed Krapels, the electric industry consultant from Boston who helped dream up the initial idea of the Neptune project. These words speak volumes on what’s happening in today’s power industry, and on what the ISOs and RTOs are trying to achieve, not only for merchant-grid projects but for merchant generation and system reliability.
Building a Better Utility
Many of the obstacles and strategic issues that utilities face today are all too familiar. This time they must be solved with a different business model.
We overbuild, run short, then overbuild again. You'd think we'd learn, because when the forecasts aren't accurate, when overcapacity plagues the industry, companies fail. Can we get the forecasts right? Probably not. But we can plan for forecasts that will be wrong. They always are. And they will be until the system is redesigned to let prices clear the market.