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ROE: The Gorilla Is Still at the Door

Incentive regulation is not a cure-all for the continuing controversy over return on equity.

Incentive regulation can provide benefits both to utility shareholders and customers by encouraging greater efficiency. But even if incentive regulation supplants traditional COS regulation, regulators and utilities still will need to confront the same basic ROE questions that have vexed both for many years. Because the base ROE under incentive regulation will be an integral part of the incentive structure itself, it ought not to be done as an afterthought. The approach described here is one way to address this important issue.
Byline: 

Jonathan A. Lesser

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Western Power Markets: Ready for A Wild Ride

IOUs take action, but other overriding forces will affect prices in the near term.

The new capacity brought on line in 2003 and 2004 likely will not drive down market prices but may well provide a measure of reliability to the market, possibly counteracting some of the usual price volatility seen in low hydro years. This is good news for the wholesale power business, and it signals that the industry is beginning to claw its way back from the near-death experience of the past few years.
Byline: 

Gary L. Hunt and Jon Ecker

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Letters To The Editor

ISO/RTO

I believe the primary measure of successful “deregulation” is a minimization of the delivered cost of power to end users, at an acceptable level of reliability. To help achieve that, I suggest the following actions should be taken nationwide on a timely and consistent basis.
Byline: 

Richard P. Felak

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People

People for July 2004.

Positions filled at American Electric Power, Schneider Electric, Foster Wheeler Energy Limited, and others.
Byline: 

PUF

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Lost in Translation

Critics say FERC's filed rate doctrine is wrong for the times.

It’s quite remarkable how the Federal Energy Regulatory Commission (FERC) has been able to pound a square peg into a round hole. With not much more than a wink and a smile, FERC has taken a depression-era law meant for monopolies — the Federal Power Act — and has made it serve double duty as a foundation for competitive power markets. Yet FERC’s reinterpretation, for all its good intentions, may prove inadequate in the long run to define and support full-fledged energy markets.
Byline: 

Richard Stavros

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