By diving into today’s more diverse energy sector and embracing change, utilities stand to benefit over the long term. This is precisely why I am so excited about the future, even if I do occasionally look back wistfully on the past.
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Author Bio:
Roy Palk is senior energy advisor for the national law firm LeClairRyan, and works out of the firm’s office in Glen Allen, Virginia. Contact him at roy.palk@leclairryan.com.
PUCs are concerned that a rapid shutdown of coal-fired plants will start a full-tilt dash to gas—similar to the one that caused bankruptcies among independent power producers in the late 1990s and early 2000s. But this time around, ratepayers and not IPP investors will be stuck with the risk, if utilities rush to add all that new gas-fired capacity to rate base.
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Frontlines
Author Bio:
Michael T. Burr is Fortnightly’s editor-in-chief. Email him at burr@pur.com
Gas-fired generators and suppliers alike can each share risk and reward from historic low prices with contracts that blend market and fixed prices
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Category:
Energy Risk & Markets
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Sidebar Title:
Presuming Prudence
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In 2010, Colorado Gov. Bill Ritter signed the Clean Air-Clean Jobs Act, which, among other things, explicitly encouraged long-term gas supply contracts. The law specified procedures for commission approval and discouraged subsequent look-back by future commissions.
In April 2012, the Oklahoma Corporation Commission approved a competitive procurement rule that created new opportunities to enter long-term contracts for natural gas and other fuels. The rule created “an open, transparent, fair, and nondiscriminatory competitive bidding process” that would enable Oklahoma utilities to obtain a presumption of prudency for approved agreements.3
A report recently released by the National Regulatory Research Institute noted the proactive measures taken by Colorado, Oklahoma, and Oregon to promote long-term natural gas contracts, while the majority of state commissions provide little guidance.4 – GS and PB
Many utilities engage in hedging to protect customers from price spikes. But unless regulators are involved in crafting and monitoring these programs, they can turn into speculative ventures that put ratepayers at risk — for the benefit of shareholders.
Category:
Business & Money
Author Bio:
John A. Neri is a principal with energy consulting firm Benjamin Schlesinger and Associates, and is a lecturer in economics at the University of Maryland.
The EPA’s new method for measuring the amount of methane that escapes from natural gas wells is based on flawed data. Oklahoma’s attorney general says this misguided policy decision treads on state regulatory authority and stifles resource development.
Category:
Op Ed
Author Bio:
E. Scott Pruitt is attorney general of Oklahoma and chairman of the Republican Attorneys General Association.
