Chasing after windmills and photovoltaics could well be the stuff of fiction.

Wind and solar cells (photovoltaics or PVs) are two renewable energy technologies that many hope will eventually provide the United States with massive amounts of clean, sustainable electric power for the indefinite future. Indeed, it is often suggested or implied that the United States can look to a future where most, if not all electric power can be provided by wind and photovoltaics [1, 2].

Regulatory and market forces put the pressure on information technology to perform.

Technology isn't in the driver's seat at some energy companies, but it's not as if those companies have reverted to using typewriters, carbons and rotary dial phones. In fact, it's beyond dispute that information technology (IT), in particular, can improve business performance-and nothing is more important to energy companies right now. But with slashed budgets and collapsing credit ratings, how should energy companies spend their precious IT dollars?

Asset Optimization Explained

To the editor: In the Oct. 1, 2002 issue ("The Fourth Wave," Frontlines, p. 4), executive editor Richard Stavros discusses how the term "asset optimization" has been used ambiguously to describe a tactical means of extracting more value from generating assets.

The sound and fury over trading scandals, credit defaults, and market manipulation so far has drowned out much of the mind-numbing debate over a standard market design (SMD), and rightly so. Utilities understand (as does the press) that Enron, "Deathstar," and "Get Shorty" will always sell more newspapers than locational pricing or congestion management.

Looking beyond ranking utilities on price.

It's tempting to compare rates between utilities- to use those simple rankings as regulatory carrots and sticks-but those who do may play a dangerous game. While such rankings may appear compelling, they can add an inappropriate bias to the regulatory process and penalize well-performing electric utilities that operate in high-cost service territories, such as large metropolitan areas.

Investigating where environmental efficiency and good public policy intersect.

More than a decade after adopting the first national cap-and-trade approach to regulating pollution from electricity generators, Congress is considering another round of cap-and-trade regulations on a number of gases emitted by electricity generators.

Learning from Wal-Mart.

It's bad enough that merchant generating companies are struggling under the weight of regulatory, accounting, and public scrutiny in an era of shattered shareholder confidence. To make things worse, over the past few years generation was overbuilt on speculation that sparks spreads would be maintained and the economy would grow. But sparks spreads have shrunk, and given the national economic downturn, energy use is also down.

Asset optimization is a favored utility strategy in an economic downturn.

Generation plant construction has gone down with the economy. "Our project finance pipeline is as dry as I have seen it," says energy analyst Jerry Pfeffer of Skadden, Arps, Slate, Meagher & Flom, speaking at a recent energy conference in New Orleans. He predicts it will take at least a year or two until new construction starts up again in any significant manner.