Perspective
A decade of restructuring has not affected the financial integrity of the average regulated utility.
Ideological bias, economic principles, success of previous deregulation, inordinate greed, and political expediency fueled the movement for electricity deregulation. The authorities, however, never deregulated. They chose to restructure.
People
New Positions:
Duke Energy Corp. appointed Paul Anderson as its chairman and CEO, succeeding Rick Priory, who will retire early next year. Anderson briefly worked for Duke after it merged with PanEnergy in 1997. He retired last year as managing director and CEO of BHP Billiton Ltd. in Australia.
Energy Secretary Spencer Abraham named Rosita O. Parkes chief information officer (CIO) at the Department of Energy. Parkes has served as CIO and deputy CIO at the Federal Emergency Management Agency.
Regulators are starting to show signs of strain over the restructuring debate.
Up to now, many in the industry thought everybody but the regulators had tired of the constant back-and-forth over regional market issues such as standard market design. This is not to say that state regulators have been able to find any common resolution. In fact, in our annual Regulators Forum on page 22, PUC chiefs from five states continue to disagree on what role the federal government should have.
A Survey of Recent PUC Rulings
(November 15, 2003) With most restructuring efforts at a standstill in the energy industry, state public utility commissions (PUCs) have tended to shift their attention back to the art and science of ratemaking. For electric and gas utilities, that has meant a renewed emphasis on the mechanics of setting a maximum allowed rate of return on common equity (ROE).
How far do states rights go in transmission planning?
The energy industry, coming off a remarkably difficult few years, had to deal with the huge Aug. 14 blackout, the ramifications of which have now reached regulatory policy. By putting transmission planning and reliability in the spotlight, the blackout could boost merchant transmission owners, as regulators and politicians scramble to make sure such an event does not happen again.
Technology Corridor
Reliability demands will drive automation investments.
In the days and weeks following Aug. 14, 2003, politicians scrambled to assess blame for the blackouts that plagued the United States and Canada.
Even today, as the blame game proceeds, the precise cause of the grid's collapse remains uncertain. But Republicans, Democrats, and the utility industry alike seem to agree on one thing: the U.S. power grid needs major investment.
Business & Money
Wall Street bankers say utilities are not effectively telling their story.
Commission Watch
Irregular seams affect ratemaking policies.
In a case that marks the first time the Federal Energy Regulatory Commission eliminated inter-RTO rate pancaking, the commission in late July issued an order terminating regional through-and-out rates (RTORs) charged by two regional transmission owners (RTOs)-Midwest Independent System Operator (MISO) and PJM Interconnection. The decision removes an estimated $250 million in yearly fees collected by those two entities.
Benchmarks
A hypothetical look at moneymakers across regions.
Perspective
Hopes and dreams sag and fail, like an overheated power line.
The big blackout has reinvigorated the debate about deregulation, snaring hopes and dreams and bringing them back to Earth. For there can be no doubt that electric restructuring, through its emphasis on market prices and market incentives-but none for transmission-contributed mightily to the recent collapse.