With the introduction of retail competition in the electricity industry, regulatory authorities in many jurisdictions are now overseeing the purchase of electricity at wholesale by electric utilities for customers that do not otherwise obtain supply from independent retailers. There are two primary ways in which, under the supervision of regulatory authorities, electric utilities purchase electricity for these non-shopping customers: through simultaneous descending clock auctions or through fairly common sealed-bid auctions, commonly known as Requests for Proposals.

While many utilities have embarked upon efforts to define a path toward the next generation utility, these efforts often are siloed initiatives driven by the generation, transmission and distribution (T&D) or customer segments of the organization. Addressing the upcoming challenge will require a coordinated and integrated set of decisions so as not to sub-optimize the end-to-end value chain. Eight critical themes across the generation, T&D and customer elements of the value chain will shape the future of our industry.

The New York ISO named Mary McGarvey its vice president and chief financial officer. Pacific Gas and Electric Co. announced that its board of directors elected Barbara Barcon as vice president, finance and chief financial officer. Henry B. “Brew” Barron was appointed president, chief executive officer and chief nuclear offer of Constellation Energy Nuclear Group. MidAmerican Energy Holdings Co. announced that Gregory E. Abel became the chief executive officer. And others...

With utilities anticipating heavy rate increases in the near future, they can ill afford to alienate their customers. At the very least, they need to equip themselves to face an upsurge in customer queries and billing questions, as ratepayers come to grips with the new reality.

The consequences of a flawed strategic choice unfold slowly, but they carry great weight. Consider IBM, which in 1980 chose to outsource to Intel the 16-bit processor needed for its entry into the personal computer market. The Intel chip, however, could not use the operating system that IBM had designed for its older 8-bit processors. And so the company had to outsource the operating system as well as the chip—to a startup company called Microsoft.

This month’s cover story focuses on how utilities intend to find the talent they’ll need over the next few years to replace all those retiring baby boomers. And part of that puzzle naturally involves executive pay: how to attract the best and brightest without going overboard on rewards for performance.

It seems that "outsourcing" has become a dirty word among utility executives. But though left unsaid in polite conversation, the word is still on everybody's mind. They might even be doing it. They just aren't talking about it.

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New Positions:

Southern Co. appointed Chris Hobson senior vice president of environmental affairs, reporting to Charles Goodman, the company's newly named senior vice president of environmental policy and research. Hobson currently serves as vice president of environmental affairs for Southern Co. subsidiary Georgia Power.

A close look at the effect of the dividend tax cut reveals a disappointing investor reaction.

 

While some predicted a very significant increase in price for utilities if dividend taxes were reduced, the actual price change data show a rather different picture.

Two years after 9/11, the industry remains vulnerable.

 

Two years ago the utility industry, like everyone else in America, was blindsided by the terrorist attacks of 9/11. In the aftermath, the rush to secure the grid was on, and the caps on security spending came off-at least for a little while.

Two years later, where are we? Is the grid better protected from attack?

It is, but not by much, according to the experts Fortnightly consulted.