Transmission Upgrades:

How to allocate the costs.

Efforts to establish and quantify congestion-reduction and loss-reduction projects are progressing in electric markets with locational marginal price (LMP) regimes. The Path 15 upgrade approval by the California ISO two years ago was largely based upon its economic benefits. A draft report from the Electric Reliability Council of Texas (ERCOT), , states that ERCOT will consider transmission projects that are "economically justified by the reduction of congestion and losses."¹

STATE REGULATORS:

Can natural gas supply keep up with demand for power?

Interviews

Things are looking up for the energy industry, but tough issues remain. Regulators-forced to grapple with the mismatch between volatile natural-gas prices and years of building gas-fired power plants-have learned a thing or two. They now insist on new rate schemes and risk-management methods while promoting the use of liquefied natural gas.

Perspective

A Year After the Blackout:

Grid reliability is still at risk unless the industry quickly takes action.

Untapped T&D measurement data could make the difference on reliability.

Utility executives rely on sound decision making to determine how resources should be allocated, to ensure that systems operate with a maximum efficiency and reliability at the lowest cost. These executives walk the fine line of deciding where money should be spent to minimize the likelihood of an expensive catastrophe while also achieving a targeted level of reliability. These issues include:

How will the industry change in the future?

The utility industry of the future can be best characterized by three words: scale, synergies, and automation. Company leaders and the broader workforce will be touched by these three forces for change. We can already see glimpses of the future around us today. In response to the sweep of deregulation, many power companies no longer generate power. They have divested themselves of their generating plants, ceding that ground to independent producers to concentrate on distribution.

Perspective

A face-to-face interview with FERC Chairman Pat Wood III.

Bold. Fearless. Relentless. These are the words now being used by both critics and supporters to describe Federal Energy Regulatory Commission Chairman Pat Wood III.

FERC's recent policy initiatives and directives mark a strong shift from what was last year regarded as a more reluctant commission.

A coordinated approach helps control costs.

Historically, transmission and distribution assets have been quiet utility stepchildren- generally ignored by both regulators and senior utility management while, their generating asset relations remained in the limelight. But as restructuring of the electric industry evolved in the 1990s, a looming competitive environment created strong pressures within utilities to reduce spending.

Frontlines

Is FERC the rightful heir?

The possibility that energy legislation drafted last year won't pass in 2004 has created a power vacuum. Who now is czar of electric utility reliability? Language in the proposed bill would have answered that question. But when Congress demurred, did that imply an endorsement of the ?

Perspective

Locational pricing makes the network secure, since the utilities and other market participants get 'paid' to monitor the grid.

The recent pressure on the board and stakeholders of the Midwest Independent Transmission System Operator (MISO)-to postpone the startup of energy markets and concentrate instead on "reliability"-is truly unfortunate. It allows opponents of restructuring to continue to pose a false choice: You can have markets or you can have reliability, but never both.