Cross State Air Pollution Rule

Ongoing litigation over EPA rules raises compliance risks and costs. North Carolina utilities, however, benefited from the state’s forward thinking.

The power and gas markets look very different today from what we were anticipating three to four years ago. Gas has gone from seeming shortage to seeming abundance with recent spot prices falling to well under $3/mcf. Power prices and volatility are down significantly. Demand is soft and excess capacity exists in most of the country. While it might be easy to attribute the conditions in the power markets largely to the recession, the reality is that the fundamentals of the market are materially changing—creating opportunities while revealing new pitfalls.

Shale gas discoveries and ballooning inventories have pushed natural gas prices down to a 10-year low. At the same time, increasingly stringent emissions regulations are squeezing out some coal-fired power assets. Are we witnessing a power-fuel revolution? And if so, what’s the best survival strategy?