Pacific Northwest

Electric utility executives generally view corporate restructuring as a potential source of economic value and a potential partial solution to financial problems that reflect changing business risks. On the other hand, regulatory commissioners attempt to insulate and regulate the utility component of the restructured energy business and to protect the public interest, including reliability of service at reasonable costs.

PacifiCorp informed FERC, PG&E, and the state of California that it would not renew the contract upon its long-anticipated expiration date of July 31, 2007. Instead, it would take back full ownership of its transmission-line rights and sell the available capacity into the open market under its own tariff at today’s going rate.

After years of feasibility studies, lack of development funds, and escalating fuel costs across the energy spectrum, ocean energy is suddenly a very hot topic.

Regional transmission organizations (RTOs) or independent system operators (ISOs) dominate the major power grids of North America, with the notable exceptions of the Southeast and Pacific Northwest. The purpose of this article is not to criticize system reliability but to highlight the more pervasive challenge today and for the future: Controlling the cost impact of decisions by grid operators on energy market participants.

The North American electric power grid has suffered several significant outages in recent years. These events and other incidents around the world spotlight the need for enforceable grid-reliability standards, wide-area visibility of the health of the power system, and real-time monitoring of grid-reliability performance to prevent blackouts. Effective reliability management requires real-time tools and technologies that can detect standards violations so that timely corrective or preventive actions can be taken.

The most important action regulators can take to minimize consumer electricity costs is, and will continue to be, ensuring competitive wholesale markets, while demanding a rich mixture of products from the suppliers in these markets.

Ken Glozer, President, OMB Professionals Inc.: “The Geopolitics of the Grid” was well done. I enjoyed reading it. Regarding the paragraph raising questions about why there are major disparities in retail electric rates from one region of the country to another, one major contributing reason is archaic and unfair federal subsidies.

Anonymous: “Gravy Train” articulately summarized the emerging tension between utility executive compensation and “return to basics” corporate strategies.

Genuine price signals about the underlying cost of consumer energy usage are an important part of energy efficiency. With those signals, consumers can adapt to save high-cost energy, while making better use of available low-cost sources and supplies.

Whether it’s an aging workforce, the impact of competitive markets, or an outdated transmission system, today’s energy and utility organizations are facing a whole new set of challenges. What many people in the industry don’t realize is that the utility sector is not the first to face these kinds of issues. The U.S. military is dealing with, or has dealt with, a strikingly similar set of problems in recent years.

During the 1980s and early 1990s, integrated resource planning (IRP) was a required practice for many utilities. Then competitive wholesale markets, merchant generation, and restructuring initiatives led many utilities to abandon IRP.

While wholesale competition generally has been successful, the regulatory process changes it brought were less so. And utilities now are getting back into long-term resource planning studies to provide decision support for their “back to basics” business strategies.