Burns & McDonnell - Watch our T&D How videos
Utility Industry Leading Self Study Online Training Program

PV

Build to Order

Engineers and constructors adapt to serve an industry in transition.
From gas pipelines to PV arrays, the nation’s contractors are seeing growth in utility infrastructure. Fortnightly talks with executives at engineering and construction firms to learn what kinds of projects are moving forward, where they’re located, and what lies over the horizon.

Demand Growth and the New Normal

It’s tempting to attribute the recent slowdown in electricity demand growth entirely to the Great Recession, but consumption growth rates have been declining for at least 50 years. The new normal rate of demand growth likely will be about half of its historic value, with demand rising by less than 1 percent per year. This market plateau calls for a new utility strategy.

Image: 
Figure 1 - Electricity Sales Growth (Two-Decade Distributions)
Figure 2 - Cumulative Demand Growth (2010-2035)
Figure 3 - Arc of Price Responsiveness
Figure 4 - Impact of Codes and Standards on Electricity Consumption
Figure 5 - Efficiency Gains of ENERGY STAR Qualified Models
Figure 6 - ERCOT Loads in Texas (3/9/11 and 8/3/11)
Author Bio: 

Ahmad Faruqui is a principal at The Brattle Group, and Eric Shultz is a research analyst. This article was revised from Faruqui’s presentation at the Goldman Sachs Power & Utility Conference on Aug. 14, 2012. The authors acknowledge research assistance by Jennifer Palmer.

Five forces are putting the squeeze on electricity consumption.

Vendor Neutral

(December2012) KC Electric Association expects soon to finalize installing a Sensus FlexNet network and iCon A electric meters to serve about 4,000 residential and small commercial members across a 5,000-square-mile territory in rural Colorado. Itron and C3 Energy formed an alliance to integrate and jointly market an energy management solution to North American utilities. And others...

Image: 
KC Electric Association is installing Sensus meters in rural Colorado.
PG&E became the first utility to deploy Picarro Surveyor mobile devices for gas leak detection.
Georgia Power started up the final unit at its new McDonough-Atkinson combined-cycle plant.
Siemens will supply a SGT6-5000F gas turbine for a new power plant in Manaus, Brazil.
Category: 
Vendor Neutral

The Fortnightly 40 Best Energy Companies

(September 2012) Our annual financial ranking shows some remarkable shifts among the industry’s shareholder value leaders. Despite flat demand and low commodity prices, investor-owned utilities are investing heavily in capital assets. Investment discipline and operational excellence distinguish leaders on the path to financial performance.
Category: 
The <i>Fortnightly 40</i> Best Energy Companies
Sidebar: 
Sidebar Title: 
Behind the Rankings
Sidebar Body: 

Our annual survey of power and gas company performance relies on a modified DuPont model, based on its 89 year-old namesake approach for calculating shareholder value in asset-intensive industries. In 2008 we tweaked the model—which originally was developed in 1919 by a finance executive at E.I. du Pont de Nemours & Co.—to measure growth on a long-term, sustainable basis (See sidebar “F40 Model Characteristics”).

The Fortnightly 40 model combines several common measures of financial performance—profitability, dividend yield, cash flow, return on equity (ROE) and return on assets (ROA)—together with a sustainable growth-rate calculation, to produce an overall picture of a company’s value and long-term prospects. To avoid the pitfalls of short-term fluctuations, the model evaluates four years of results for each company. (This represents a change from 2008 and previous F40 rankings, which considered three years of financial results.)

The universe for the ranking—which this year numbers 82 companies—includes publicly traded, U.S.-based companies with major assets in energy production, transportation and retail delivery, and positive shareholder equity value for the past four years. Pure-play mining and exploration & production companies are excluded, but a few pure-play merchant power generation companies are included in the sample.–MTB

Credits: The Fortnightly 40 model was developed in 2006 by former Fortnightly Executive Editor Richard Stavros and Jean Reaves Rollins, managing partner of the C Three Group in Atlanta.

F40 Model Characteristics

Time Frame: 4-year average

 

Sample: 80 largest U.S.-based investor-owned power and gas companies, with assets in power generation or electricity and gas transmission and distribution.

Components:

1. Profitability= Margin = Income from Continuing Operations/Total Revenues.

2. Dividend Yield= Annual Declared Dividends/Year-End Stock Price.

3. Free Cash Flow= Operating Cash Flow from Continuing Operations – Capital Expenditures.

4. DuPont ROE Five-Ratio Model:

a. Earnings after taxes (EAT) = Income from Continuing Operations after Taxes;

b. Earnings before taxes (EBT) = Income from Continuing Operations + Income Taxes;

c. Earnings before interest and taxes = Income from Continuing Operations before Income Taxes and Interest;

d. Revenues = Total Revenues;

e. Assets = Total Assets; and

f. Equity = Total Common Shareholders Equity.

5. DuPont ROE= (EAT/EBT)×(EBT/EBIT)×(EBIT/Revenues)×(Revenues/Assets)×(Assets/Equity).

6. DuPont ROA= (EAT/Revenue)×(Revenue/Assets)

7. Sustainable Growth= DuPont ROE×(1–Dividend Payout Ratio).

8. Fortnightly Index9. Companies excluded from the FY2011 survey due to M&A activity: Allegheny Energy, DPL, and Nicor.

Author Bio: 

Michael T. Burr is Fortnightly’s editor-in-chief. He acknowledges the editorial contributions of the C Three Group and Accenture.

A challenging year brings a change in the rankings.

Vendor Neutral

Panda Energy awards turnkey $300 million turnkey contract to Siemens and Bechtel; Dominion starts up 585-MW CFB plant; Ocean Power Technologies and Lockheed Martin partner on wave power project; Infigen awards wind turbine service contract to Mitsubishi; ITC commissions 345-kV line in Oklahoma; ABB tests world’s biggest DC transformer; Xcel gets green light for Tres Amigas-area transmission upgrades; plus contracts and announcements from Elster, Sensus, Enertech, and others.
Image: 
Dominion Virginia Power started up the 585-MW Virginia City circulating fluidized bed power plant in July.
The latest inspection report from the Nuclear Regulatory Commission indicates steam generator tube wear at the San Onofre nuclear plant was caused by excessive vibration under certain circumstances.
ITC Great Plains commissioned the Hugo-Valliant HVDC transmission line and substation project in Oklahoma.
The first three wireless EV charging systems were installed on Nissan LEAFs as part of the Plugless Power program. The systems use electromagnetic induction to charge EV batteries without driver interaction.
Category: 
Vendor Neutral

Letters to the Editor (July 2012)

(July 2012) Thanks for your enlightening editorial about the problems of feed-in tariffs for photovoltaic installations and the distortions they are causing in cost responsibilities among electric utility customers. While these issues are an immediate and growing concern, an entirely different set of problems will emerge over the next decade as the share of renewables in total generation approaches the high levels being dictated by most regulatory authorities.

Category: 
Letters to the Editor

Rooftop Tsunami

A growing wave of rooftop PV projects is starting to look ominous to some utilities. Will lawmakers accept utilities’ warnings at face value—or will they suspect they’re crying wolf?

Category: 
Frontlines
Sidebar: 
Sidebar Title: 
Transition to a PV World
Sidebar Body: 

Keeping the lights on in a world of mushrooming solar rooftops requires several key technology and policy developments. During the 2012 EEI Annual Convention, panelists on a session titled “Distribution 2020: Implications of a Rapidly Evolving Distribution Grid,” offered several suggestions for managing the transition.

Technology requirements:

• Bi-directional smart grid

• New safety protocols

• Uniform interconnection standards

• Integrated distribution management systems (DMS)

Policy requirements:

• Focus incentives on installations in preferred locations

• Push the limits of demand response with direct load control

• Plan holistically—account for the total costs of distributed generation

• Apply formula rates to keep utilities whole

• Accelerate depreciation appropriately

Author Bio: 

Michael T. Burr is Fortnightly’s editor-in-chief. Email him at burr@pur.com

Utilities sound the alarm as PV nears grid parity.

Vendor Neutral

(July 2012) NRC renews Entergy Pilgrim nuclear license. San Francisco selects EnerNOC. Entergy contracts with Comverge. FPL adds Quantum Ford F-150 PHEVs to its fleet. Lincoln Renewable Energy dedicates 12.5-MW NJ Oak solar project.

Image: 
Bella Energy installed 1.65 MW of PV panels on the roof of the Salt Palace convention center in Salt Lake City.
Lincoln Renewable Energy's 12.5-MW NJ Oak solar project covers  100 acres.
After considering Entergy’s application for more than six years, the NRC approved a 20-year license extension at the Pilgrim nuclear station.
Wisconsin Power & Light paid $392 million to acquire the 600-MW Riverside combined-cycle plant from Calpine.
Quantum Fuel Systems delivered a plug-in hybrid Ford F150 to Florida Power & Light for the utility’s electric vehicle fleet pilot program.
Category: 
Vendor Neutral