Executive and academic views on what to fix and what's not broke.
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.
Fortnightly's Field Guide to CEOs
They just don't make 'em like they used to. CEOs, that is. Where once CEOs could count on at least a decade of chauffeur-driven limos, stock options, and seven-figure bonuses, in today's hostile habitat, CEOs have a shrinking lifespan. That is the conclusion of a Booz Allen Hamilton (BAH) study on CEO turnover.
FERC's Standard Market Design: Too Detailed To Evolve
The Federal Energy Regulatory Commission's standard market design (SMD) proposal states objectives that are important and supportable, both theoretically and empirically. Uniform rules and business practices reduce transaction costs and limit opportunities for institutional arbitrage, increase the extent of the market, and increase market liquidity and investment.
As Latin America swoons, the electricity sector holds on tight.
Fighting to Privatize
As Latin America swoons, the electricity sector holds on tight.
The International Monetary Fund's (IMF) World Economic Outlook September 2002 gives a fragile outlook in the short-term for Latin America. In 2002, regional output contracted by 2.5 percent in the first quarter (compared with the final quarter of 2001) and is expected to fall in 2002 as a whole, according to the IMF.
The Association of Edison Illuminating Cos. (AEIC) elected new officers. Thomas Shockley III, vice chairman and chief operating officer of American Electric Power, was elected president of AEIC. Elected as first vice president was Peter Burg, chairman and CEO of FirstEnergy. Richard Grigg, president and COO of We Energies, was elected second vice president.
Why rate base is back in style.
It's no surprise that traditional utilities are now fashionable with Wall Street. With merchant generation and energy trading gone bust, bankers, analysts, and fund managers at the 37th Edison Electric Institute Financial Conference, held last month in Palm Springs, Calif., were falling over themselves to find those regulated gems overlooked during the energy merchant boom years.