Commission

Financing New Nukes

Federal loan guarantees raise hopes for new reactors planned by affiliates of Constellation and NRG.

Federal loan guarantees have been unleashed to support new nuclear plant construction. Will this be the watershed event that finally gets nuclear moving forward in the United States?

Ring Fencing In Utah

Regulatory structures protect ratepayers in geography-spanning utility mergers.

Electric utility executives generally view corporate restructuring as a potential source of economic value and a potential partial solution to financial problems that reflect changing business risks. On the other hand, regulatory commissioners attempt to insulate and regulate the utility component of the restructured energy business and to protect the public interest, including reliability of service at reasonable costs.

People

The Interstate Natural Gas Association named Richard R. Hoffmann executive director of the The INGAA Foundation. E. Kevin Bethel joined Sierra Pacific Resources as chief accounting officer. Dominion East Ohio promoted Bruce C. Klink to president. American Electric Power announced several changes. And others...

California: Mandating Demand Response

California’s load-management experience argues for formal DR standards

California hopes to reap $3 billion in benefits from demand response over the next 20 years. Maximizing the potential may require the California Energy Commission to exert its statutory authority. CEC’s chair co-authors.

Cyber Attack! - Defining 'Critical Assets'

ERCOT utilities approach CIP compliance from varying perspectives

As proposed by the North American Electric Reliability Corp., the new critical infrastructure protection (CIP) standards charge utilities with identifying their own critical assets and related cyber systems. This approach allows great flexibility for utilities to apply the CIP standards to their particular situations. This will help ensure that their efforts focus on securing critical assets, rather than on complying with an overly prescriptive set of mandates that might or might not yield a secure grid.

Cyber Attack! CIP Goes Live

Utilities are gearing up for cyber security compliance. Will the standards prove worthy?

The NERC CIP standards represent an historic achievement. They include the first mandatory cyber security requirements of their kind to be imposed on a U.S. private-sector industry. Considering the scope and sensitivity of the grid-security issue, developing a set of enforceable standards inevitably would entail a complex and contentious process. From that perspective, NERC, FERC and the industry have made remarkable progress, and their efforts deserve accolades.

Linking Risk and ROE

Financial-risk coverage is falling short in utility returns

When setting the allowed returns on common equity of jurisdictional utilities, state regulatory authorities apply the virtually universal standard that the allowed returns should be similar to returns on common equity investments in companies of equivalent risk. Such returns generally are accepted as fair if they are no higher than necessary and still sufficient to attract investment. Despite the universality of this regulatory standard, our investigation of recent allowed returns by state commissions shows that a key risk—financial risk—as measured by accepted, measurable metrics, has not been a factor affecting the level of allowed returns in the United States in recent years.

Setting the Standard

NERC’s new cyber security rules may minimize cost of compliance, but they leave utilities guessing on how to identify risks.

Liam Baker, vice president for regulatory affairs at US Power Generating, questions whether his company’s power plants and control systems in New York and Massachusetts must comply with the electric industry’s new mandatory standards for cyber security. Baker voiced his doubts in written comments he filed in October with FERC.

2025: A Murky Mix

Which power technologies will dominate?

U.S. power-plant construction tends to follow fads. Identifying these trends is easier than determining the primary drivers and issues that contributed to them. Understanding how these drivers affect power-planning decisions can help utilities predict generation-construction trends in the future and avoid getting caught in a group-think trap.

Sticker Shock!

Increasing prices for materials, equipment and services are driving utility infrastructure costs into uncharted territory.

The evidence is overwhelming: After a decade of relatively stable, or even declining, construction costs, the industry is now facing a prolonged period of elevated construction price tags. What are the causes behind this trend, and how might the cost increases translate into higher rates?