An analysis of the timing, location, and mix of new capacity additions that may be needed in the future.

It is universally accepted that there is excess generating capacity in most, if not all, regions in the country. Looking forward, several obvious, and interesting, questions arise: (1) When will new capacity be needed? (2) Where will it be needed? and (3) What types of plants will be needed? As any good economist would say, it all depends.

Greater reliance on gas-fired power implies serious economic, technological, and national security risks.

Over the past two decades, the United States has, by default, come to rely on an "In Gas We Trust" energy policy. Natural gas increasingly has been seen as the preferred fuel for all applications, nowhere more than in the electric generation sector. However, the greatly increased use of natural gas forecast for the electricity sector may not be economically or technically feasible, and it does not represent optimal or desired energy policy.

Despite development challenges, LNG capacity is destined to play a bigger role in the U.S. energy mix.

When MidAmerican Energy announced its plans to build a pipeline to bring stranded Alaskan natural gas into the lower-48 states, the U.S. energy industry stood up and took notice. If successful, the project will bring the largest infusion of gas that this country has seen in many years-and not a moment too soon.

Technology Corridor

A digital grid to the home, secured via a local fiber-optic network, could position utilities to fix power and telecom together.

Before billions are spent building new transmission lines to ensure reliable electric service, North American electric utilities should evaluate whether the alternatives-controlling demand and fostering distributed generation-might be more cost-effective and broadly beneficial.

Business & Money

Can economies of scale make the industry more stable?

The recent Northeast Blackout framed for regulators and public policy-makers one of the central issues confronting the utility industry: infrastructure reliability and the significant capital investment requirements necessary for improvement. While estimates vary widely, some industry experts currently project that the investment necessary to revitalize and secure the transmission infrastructure in the United States may run in excess of $100 billion.

Commission Watch

California anticipates changes in energy policy under its new governor.

The recall of California Gov. Gray Davis in November 2003 almost immediately led to speculation concerning possible changes in California's energy policy. Since his election, Gov. Arnold Schwarzenegger has assembled an Energy Working Group, co-chaired by Professor James L.

Perspective

Wisconsinites don't fear 'Day 2.' But let's get the grid rights right.

While working for the Wisconsin Public Service Commission (PSC), I have grown accustomed to the friendly advice frequently offered by regulatory colleagues and utility executives in higher-cost areas to the East.

Benchmarks

Strange bedfellows may provide a new supply option.

Justifiable concerns associated with high natural gas prices have led analysts to consider the implications for new capacity development over the next decade. Expectations regarding the continued dominance of natural gas-fired units have begun to change. For example, in its , the U.S. Energy Information Administration (EIA) expects 112 GW of new coal-fired generating capacity to be constructed between 2003 and 2025-a 51 percent increase over EIA's 2003 forecast.

People

New Opportunities:

Allegheny Energy named Max Kuniansky director of investor relations. He previously held the position of vice president of investor relations for B/E Aerospace and investor relations specialist for FPG Group Inc.

Frontlines

Do-nothing regulators scare off investment, raising prospects for yet another large-scale power failure.

Last summer's blackout is slowly fading from the radar screen. The silver lining that might have moved some to action has now tarnished.