Benefits

Advanced distribution management systems (DMS) are providing unprecedented levels of control and efficiency. With greater knowledge about system loading and status, utilities can better make investment decisions—and operators will be better able to keep the lights on as the power system evolves.

Much has been said about the smart grid’s potential for transforming the utility business. But while the industry has focused on technology, process and organization, another factor—data—likely will prove to be a key transformational driver. Benefits for utilities and their customers depend on how effectively companies make use of a torrent of new and powerful data.

Regardless of what drives the action — state regulation, federal policy, economic reality — collaboration between utilities and the solar industry is now becoming prevalent. Expanding definitions of utility solar business models represent a significant potential for solar market growth, and provide paths for others to follow.

Small coal-fired plants are particularly vulnerable to economic and environmental pressures, putting some plant owners in what seems like a no-win position. But an emerging option—biocoal from crop wastes—might give small coal units a new lease on life.

FERC has proposed that wholesale energy markets should subsidize load reductions with full LMP (locational marginal price), without deducting the customers’ retail savings. Such a policy could distort the market, and other solutions might achieve the same objectives more efficiently.

New baseload generation is needed in many areas of the United States, but financing new plants will be particularly challenging in restructured states where generation facilities are no longer included in rate base and therefore not financed through the traditional rate-of-return paradigm. A market hybrid approach—in which new baseload plants would be partially owned and financed by the regulated distribution company with the other portion owned and financed by the unregulated generation company—would combine the advantages of lower cost capital and regulatory oversight associated with traditional rate of return regulation, with the cost control and efficiency associated with competitive markets.

FERC owns more than one enforcement tool. Besides civil penalties, it can require compliance plans or disgorgement of unjust profits, or condition, suspend, or revoke market-based rate authority, NGA certificate authority, or NGA blanket certificate authority. And lacking criminal penalty authority itself, FERC can refer matters to the U.S. Department of Justice for criminal prosecution. Moreover, while defining an organization as any entity other than a natural person, FERC nevertheless will continue to determine civil penalties for natural person violators, looking to the guidelines for guidance in setting such penalties.

FERC’s proposed penalty guidelines provide the opportunity for improved regulation. More practical and consistent characteristics for determining penalty fine ranges will increase penalty predictability for industry violations of federal regulations—and will make FERC’s enforcement more fair and transparent.

Low carbon prices might not produce sufficient incentives for firms to innovate and reduce emissions in the long run. But relatively high carbon prices can be politically unacceptable and invite consumer backlash. Where’s the right balance? A PUC chairman offers an alternative approach to managing GHG emissions.

Small modular reactors (SMRs) are nuclear generating units that are about the size of railroad cars and provide about one-tenth to one-fourth the power of full-size reactors. As a result, they cost a fraction of what full-size reactors cost. The reactors are designed to provide between 40 MW and 300 MW of electric power, compared with the 1,100 to 1,700 MW output of larger reactors. In addition, most are expected to cost under $1 billion, compared with the $5 billion to $10 billion price tags of the larger units.