Energy Policy Act of 2005

Understanding the downstream effects of reading and billing from a customer’s meter in a near real-time scenario will increase significantly the data throughput into current customer information systems. Can current systems handle the volume increase? Will call centers have the capacity to handle increased call volumes once customers have access to smart meters and all that they imply? In this case, would outsourcing certain information technology processes be the answer to reducing a utility’s risk and costs?

The expected increase in gas consumption for electric generation and high commodity prices has fueled a renewed interest in developing more LNG and other non-conventional resources (coal-bed methane, tight sands and shales, Arctic gas)

New regulations from FERC to prevent energy industry market manipulation take deep root in securities industry law. Modeled in part on the Securities Exchange Act of 1934 (Exchange Act), the Energy Policy Act of 2005 (EPACT) outlaws direct or indirect use or employment of manipulative or deceptive devices or contrivances in energy industries FERC regulates under the Natural Gas Act (NGA), the Natural Gas Policy Act of 1978 (NGPA), and the Federal Power Act (FPA).

Important challenges still confront the development of a coherent strategy to create an efficient modern transmission system. Assuming FERC and Congress are earnest about creating a 21st century grid, new ideas, projects, and technologies need to emerge.

The Energy Policy Act of 2005 gave states a new federally enforceable right to access holding company books and records, but concern remains that some of these initiatives may run counter to the goal of capital attraction.

What a difference a year makes. In 2004, automated metering infrastructure (AMI) was in something of a slump, but the Energy Policy Act of 2005, an uptick in natural disasters, and encouraging results from pilot projects have strengthened the business case for investing in AMI.

What a difference a year makes.

In 2004, the automated metering industry was in something of a slump. After the 2003 Northeast blackout, and facing rising gas prices and diminished investor confidence during a time of war, many utilities put automated meter reading (AMR) on the back burner.

The time has come to start the transition from the current economic demand-response programs to demand response that arises naturally through market-based retail pricing.

Over the past few decades, utility sponsored conservation and load-management programs have helped thousands of customers better manage their energy costs. While these programs have helped lower overall electricity use, they generally have not provided an economic incentive for customers to reduce their consumption at specific times in response to wholesale electricity prices.

In its March 2005 report to the House Energy and Commerce Committee, the Federal Energy Regulatory Commission (FERC) repeated its request for enhanced civil penalty authority. When Congress passed the Energy Policy Act of 2005 (EPACT), it granted FERC all the authority that it had requested, and more. The new director of FERC’s Office of Market Oversight and Investigations (OMOI) called the new penalty authority “awesome.”¹

Hidden in the 1,700-plus pages of the Energy Policy Act of 2005 is a set of regulatory requirements that will redefine the technology, leadership, training, culture, compensation, job design, and organizational models currently employed in the industry.

Power-industry restructuring redistributed financial uncertainties that discourage generation investment and ultimately raise the price of electricity to consumers.