A cost-benefit study shows the value of adding synchronized generating reserves to prevent blackouts on the scale of Aug.14.

If nothing else, the blackout of Aug. 14 showed just how physically vulnerable the electric transmission network has become to problems that begin at a very localized level. That vulnerability stems in part of the greater volume of long-distance transactions imposed on the grid by today's power industry.

Will the CFTC move Into FERC's house?

Most of us in the energy industry have long thought that the "transmission of electric energy in interstate commerce" falls within the exclusive jurisdiction of the Federal Energy Regulatory Commission (FERC). The same goes for electric sales at wholesale, if also conducted in interstate commerce. We know that because the law¹ and the courts tell us so. And natural gas is much the same.²

Financial players bring credit depth to energy markets, but will they play by the rules?

The center of gravity for energy marketing and trading activity is moving from Houston to Wall Street. Some major financial institutions already have plunged into the market, while others are testing the waters, gearing up to participate in a bigger way. Already their impact is being felt, and it is most definitely welcome.

Business & Money

FERC's ruling on cash management programs will introduce new transparency into how utilities manage their cash.

On Oct. 22, the Federal Energy Regulatory Commission (FERC) ruled that FERC-regulated entities must file their cash management agreements with the commission and notify the commission within 45 days after the end of each calendar quarter when their proprietary capital ratio drops below 30 percent, and when it subsequently returns to or exceeds 30 percent.

Commission Watch

ISO New England dares to dream, again.

ISO New England (ISO-NE) wants to become a regional transmission organization (RTO). But just the idea-prior to any official filing at the Federal Energy Regulatory Commission (FERC)-has come under attack. ISO-NE is going to find rough waters ahead, despite a three-year effort aimed at a smooth transition to becoming an RTO. And now with the Oct. 31 filing of the 2,000-plus-page RTO proposal at FERC, the stage is set for these battles to be fought, again.

A number of factors point to expanded nuclear generation. But when?

The role that nuclear power will play in the U.S. electricity generation mix during the coming decades has been a subject of continuing speculation. Few analysts deny the remarkably improved prospects for the existing fleet of reactors: Efficiencies realized by industry consolidation, reactor uprates, and plant license renewals have, in a period of about five years, greatly increased the market value of nuclear plants and the competitive advantage of companies that own them.

Generators struggle to plan for the future as they cope with an unstable present.

When the acting administrator at the Environmental Protection Agency (EPA), Marianne Horinko, signed the EPA's "routine replacement" rule on Aug. 27, 2003, she proclaimed that the new approach to Clean Air Act regulation would "provide … power plants with the regulatory certainty they need."

Business & Money

Obtaining a position measurement in energy markets has become more complex and has increased financial risks for integrated utilities.

"What's your position?" The answer to that simple question in today's energy markets is anything but simple. In fact, answering this question may be the single most difficult challenge faced by a fully integrated energy firm in its efforts to manage risk.

Commission Watch

Feds seek plug-and-play for distributed generation, but utilities want the power to stay local.

Pity the poor Federal Energy Regulatory Commission (FERC). With its market crusade out of favor, and transmission reform suddenly suspect after the Aug. 14 blackout, it could use a new agenda.

Up to now, many in the industry thought everybody but the regulators had tired of the constant back-and-forth over regional market issues such as standard market design. This is not to say that state regulators have been able to find any common resolution. In fact, in our annual Regulators Forum on page 22, PUC chiefs from five states continue to disagree on what role the federal government should have.