Commission Watch
FERC looks ahead to the new year as it wraps up loose ends from 2002.
FERC: SMD/Grid Issues Lead 2003 Agenda
Commission
People
We welcome submissions to People, especially those accompanied by a Color Photograph. Send to:
California Gov. Gray Davis named Michael Peevey president of the state's PUC, replacing Loretta Lynch. Lynch was expected to remain with the commission until the completion of her term, in January 2005. Peevey has served on the commission since March of 2002. He previously was president of Edison International. Davis also appointed Susan Kennedy commissioner, replacing Henry Duque.
Richard G. Newman, chairman and CEO of AECOM Technology Corp., joined the Sempra Energy board of directors.
Frontlines
How Einstein discovered relativity, locational pricing, and participant-funded transmission.
Regulation No. 226: Perestroika for Russian Energy Investment
The Federal Energy Commission of Russia is set to restructure the country's energy rules and make opportunities for investment attractive.
The Federal Energy Commission of Russia is set to restructure the country's energy rules and make opportunities for investment attractive.
Potential investors in Russian energy will be particularly interested in Regulation 226, "On Price Formation Regarding Electric and Heat Energy." Enacted on April 2, 2002, this regulation, if implemented as fully presented, provides an attractive basis for the balance of interests between investors and consumers of Russian electricity called for by Federal Energy Commission of Russia (FEC) Chairman Geor
Competition Lost
U.S. companies' international strategies turn sour, as Europe faces a future with an oligopoly of power companies.
U.S. companies' international strategies turn sour, as Europe faces a future with an oligopoly of power companies.
While the European Union is pushing to give all industrial and commercial customers electric choice by 2004, giant incumbent European utilities are increasingly dominating power markets across Europe and the United Kingdom.
Energy Trading: Down But Not Out
The speculative electricity trading industry has a bad case of rigor mortis, but current efforts might breathe new life into the practice.
Trading is dead. At least that’s what some analysts are saying about the electricity markets. “Trading died with Enron on Dec. 2, 2001,” says Mark Williams, an energy risk management expert at Boston University. Whether trading is really dead or not, some signs of a rebirth are beginning to emerge.
Risk Experts Speak Out: Where the CCRO Fell Short
A surprisingly timid effort for an industry on the brink.
The purpose for the Committee of Chief Risk Officers (CCRO) recommendations, as stated in the introduction to their 198-page opus, is "to provide guidance on new methods and tools to establish a strong foundation for future growth in this (merchant energy) industry." But the reality is that the recommendations, almost without exception, fail to provide strong leadership in the areas of past and potential future abuse.
Perspective
An analyst looks at prospects for emerging power technologies in light of the recent turmoil over deregulation.
Goodbye to All That?
Commission Watch
State regulators redouble their deregulation efforts-or abandon them altogether.
Retail Energy in 2002: A Regulatory About-face
State regulators redouble their deregulation efforts-or abandon them altogether.
The past year was a phenomenal one for state public utility regulators.
A historical confluence of events, including the catastrophic failure of the move to deregulate California electric markets and a nationwide epidemic of corporate financial scandals, led in large part by energy trading firms, helps to explain the developments.
Frontlines
The commission may find it's powerless on capital finance and credit issues. <p><b class="hook">Some say that without Alan Greenspan attending the Federal Energy Regulatory Commission's</b> (FERC's) Jan. 16 and Feb. 5 technical conferences on capital availability for energy infrastructure and energy market credit issues, the commission will have few options other than market enforcement and the design of fair and competitive markets</p> <p>In announcing the conferences in Washington, FERC declared its interest in clarifying the state of capital available to energy markets and infrastructure. But what, if anything, can the commission do to support the embattled energy merchant and energy trading space during its current credit crunch?</p> <p>Certainly, FERC's concern is understandable. What's the point in designing an energy market that has no participants? Furthermore, the commission is all too aware that illiquid wholesale markets don't end in "just and reasonable" prices.</p> <p>The issue is timely, with wholesale energy markets in a rather bleak state (see <i>"Energy Markets: Down but Not Out,"</i> on p. 18).</p> <p>Yet, given that FERC has no congressional authority to shore up confidence in markets by providing liquidity to avert a collapse in the sector, as the Federal Reserve did during the 1997 stock market crash, what can the commission do?</p> <p>The agency can provide performance-based ratemaking to attract infrastructure projects and their financiers in the area of transmission. In terms of energy markets, the commission can also develop a standard market that inspires investor and industry confidence. As everyone knows, properly designed markets would attract more market players and financiers, and thus provide liquidity.</p> <p>But FERC may have to face that it cannot bail out the industry from its current credit problems. Credit ratings analysts already predict a grim year for utilities.</p> <p>Fitch Ratings believes that a debt crisis will dominate the U.S. power sector in 2003 and could last well into 2004. "Companies that specialize in the sale of wholesale energy are coping by stretching out debt maturities, retaining the assets they can manage, shedding the rest, and hoping they will stay afloat long enough for energy demand and prices to strengthen," according to a Fitch report.</p> <p>Of course, FERC's inquiry opens up the controversial issue of whether the government should bail out the industry. Given events in the airline industry recently, the prevailing wisdom in Washington is that markets for airline transportation and power will have to sort themselves out.</p> <p> </p> <p class="center"><b>Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.</b></p>
FERC: Lender of Last Resort?
The commission may find it's powerless on capital finance and credit issues.
Some say that without Alan Greenspan attending the Federal Energy Regulatory Commission's (FERC's) Jan. 16 and Feb. 5 technical conferences on capital availability for energy infrastructure and energy market credit issues, the commission will have few options other than market enforcement and the design of fair and competitive markets