News Analysis
New England puts a price on electric reliability, but some say the charge looks more like a tax.
Does ICAP qualify as a true commercial product, traded on its own merit with a tangible value for customers?
There's no getting around it—price caps aren't for everyone.
Have gas prices fallen victim to speculation?
On Thursday, Dec. 8, as natural gas hit $40 at the citygate for Southern California (prices hit $60 that Friday), I found myself in Colonial Williamsburg, a guest of Michigan State University's Institute of Public Utilities, at the group's annual conference, watching a panel of industry experts try in vain to explain what was happening.
Frontlines
$$$/MWH???
Frontlines
What's a Utility?
Never before have investors known less about what their company is up to.
How many different types of "utility" companies can you name? Which ones would you trust the most to double or triple your investment nest egg? Which ones make you nervous?
An interview with David A. Boger, Stephen D. Moritz and Joseph G. Baran of Strategic Energy Ltd.
The expiration and renegotiation of firm transportation contracts on the pipelines in North America is becoming increasingly complex. For example, TransCanada Pipeline ("TransCanada") in the past consistently renewed its expiring contracts for five- to 10-year periods at maximum rates. It also regularly expanded its capacity, requiring 10-year commitments two years in advance of availability.
Power plants can bid on more than one product. That's why most spark-spread studies miss the mark.
Forward energy prices can make it look easy to place a value on a power plant. Yet something is missing. Plants can sell more than one product. One price may be up while another is down. As Einstein said, a theory should be as simple as possible, but no simpler.
That is why it is worth reexamining the methods commonly used to calculate forward price curves and estimate the expected revenues and profits of generating assets.
But does anyone know the real price of power?
You've read the headlines from Maine - how regulators asked for bids for competitive electricity but got prices higher than the old regulated rate.
But it gets worse. The more open the market, the higher the bid.
Central Maine Power and Bangor Hydro-Electric operate within ISO New England, which now is open for competition.
Roll over wireless, tell your meter the news.
AMR has come full circle - from industry darling to problem child and now back again to the next new thing. For this latest reincarnation, thank the Internet.
Early AMR efforts focused on how to recoup costs through lower operating expenses and more accurate usage data, but infrastructure startup costs proved a stumbling block to modernization when industry uncertainty over deregulation made companies wary of whether they'd ever see a return on their investment.
Now deregulation has matured enough to remove some uncertainties.
Shaky merger policy finds the FERC at war with itself.
"IN HIS DELIGHTFUL ARTICLE, "THE FOLKLORE OF Deregulation," published this summer in the Yale Journal on Regulation, federal judge Richard Cudahy notes the ethereal nature of "virtual electricity." This new product, he explains,"exists only as a blip on a computer screen and will never give one a shock." "Reality," he notes, has "retreated to the money part of the system."
We could use a dose of that reality in looking at electric utility mergers.