- Email: [email protected]
In this issue …
ELECTR IFC 24(3).qxd:INNER COVER
4/4/11
3:23 PM
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Editorial Advisory Board April 2011 • Volume 24, Issue 3
I
n this issue . . .
In the view of Kyle W. Danish, Douglas W. Smith and Kaitlin A. Gregg, recent rulemakings from the Environmental Protection Agency under the Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act represent the most significant environmental regulatory developments of the last two decades for the power sector. The result is likely to be a significant number of plant retirements, with adverse impacts on reserve margins and reliability, and other effects that the authors analyze as the initial deadlines in 2013 loom on the horizon. It makes for sobering reading. Turning to the state level of regulation, Elizabeth Lokey Aldrich and Cassandra Koerner analyze existing and possible legislation pertaining to pore space designation, an issue that has taken on greater significance as commercialization of carbon capture and sequestration is debated. Their conclusion: to date, the legislation that has passed does not provide an environment that would lead to the successful CCS commercialization.
And while allowing the federal government to assume pore space ownership would not solve all the problems, it certainly would simplify some of them by reducing the amount of future litigation. In our next article, Floyd L. Norton IV and Michael Keegan explore the practical consequences arising from the Federal Energy Regulatory Commission’s efforts last September to foster competition in the secondary transmission markets. The practical effects, they warn, remain to be seen, particularly because resellers remain liable to transmission providers even after they’ve reassigned transmission capacity, and because the rules governing the transfer of rollover rights have not yet been established. Steven Michel returns to an intriguing approach he has been exploring in The Electricity Journal, offering a model clean energy standard that, he argues, can drive absolute CO2 reductions while remaining indifferent to generation type. It awards credits based upon relative CO2 emissions and retires credits in a system that encourages energy efficiency. Pierre Bull, Noah Long and Cai Steger explore issues related to the implementation of feed-in tariffs as a means of
The Electricity Journal (ISSN 1040-6190) is published monthly, and bi-monthly in January/February and August/September by Elsevier Inc., 360 Park Avenue South, New York, NY 10010-1710. Periodicals postage paid at New York, NY, and at additional mailing offices. Postmaster: Send address changes to The Electricity Journal, Elsevier, Customer Service Department, 11830 Westline Industrial Drive, St. Louis, MO 63146, USA. Web site: www. elsevier.com/locate/tej
Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected] Publisher Clare Lehane [email protected]
fostering the scaling up of clean, distributed generation. The authors show how FITs can fit into a policy framework to maximize a diverse portfolio of clean energy, and provide some general principles for FIT policies in the U.S. Turning to the arena of corporate governance, Julia E. Sullivan and Jennifer Good offer some guidelines on structuring compensation in an era of greater scrutiny of executive pay. More than ever, they write, it’s important to have a fair and prudent compensation system in place and to carefully monitor pay practices, ensuring that executive pay remains competitive yet reasonable given the currently challenging economic conditions. Finally, Andrew DeBenedictis, David Miller, Jack Moore, Arne Olson and C.K. Woo offer a close-grained analysis of forward pricing data from the Pacific Northwest to identify the existence of a relatively large risk premium, with the implication that forward contract buyers are more risk-averse than sellers. RICHARD COHEN GERRY KHERMOUCH
Subscription rates: euro 109 for European countries and Iran; USD 117 for all countries except Europe, Japan and Iran (personal price). Euro 685 for European countries and Iran; USD 767 for all countries except Europe, Japan and Iran (institutional price). Editorial office: 954-659-0061 Fax: 954-659-0062
The members of The Electricity Journal’s Editorial Advisory Board listed below have graciously agreed to assist us in identifying appropriate topics and authors for each issue, and to review articles in advance of publication when asked We and our readers are continually enriched by their generosity, their ideas, and their critical comments. Responsibility for what appears on these pages is, however, entirely our own.
John A. Anderson, Executive Director Electricity Consumers Resource Council
Sue Kelly, Vice President of Policy Analysis and General Counsel American Public Power Assn.
Miles Bidwell, President Bidwell Associates, Inc.
Ashley C. Brown, Executive Director, Harvard Electricity Policy Group John F. Kennedy School of Government, Harvard University
Ralph Cavanagh, Senior Staff Attorney Natural Resources Defense Council, San Francisco
Reinier Lock, Attorney Washington, DC
J. Robert Malko, Professor of Finance Utah State University
Steven A. Mitnick, Chief Executive Officer Conjunction LLC, Washington, DC
David K. Owens, Executive Vice President, Business Operations Group, Edison Electric Institute
Scott Hempling, Attorney-at-Law, Executive Director National Regulatory Research Institute
Benjamin Hobbs, Professor, Department of Geography and Environmental Engineering, The Johns Hopkins University
William W. Hogan, Raymond Plank Professor of Global Energy Policy John F. Kennedy School of Government, Harvard University
Paul L. Joskow, Elizabeth and James Killian Professor of Economics and Management Massachusetts Institute of Technology
Edward Kahn, Principal Analysis Group/Economics, San Francisco
Joshua Z. Rokach Silver Spring, MD
Mohammad Shahidehpour, Bodine Distinguished Professor and Chairman, Electrical and Computer Engineering Department Illinois Institute of Technology Chicago
F.P. Sioshansi, President Menlo Energy Economics, San Francisco
Irwin Stelzer, Director, Regulatory Policy Studies, Hudson Institute
Richard D. Tabors, Vice President Charles River Associates, Boston
4/4/11
3:23 PM
Page 1
Editorial Advisory Board April 2011 • Volume 24, Issue 3
I
n this issue . . .
In the view of Kyle W. Danish, Douglas W. Smith and Kaitlin A. Gregg, recent rulemakings from the Environmental Protection Agency under the Clean Air Act, Clean Water Act, and Resource Conservation and Recovery Act represent the most significant environmental regulatory developments of the last two decades for the power sector. The result is likely to be a significant number of plant retirements, with adverse impacts on reserve margins and reliability, and other effects that the authors analyze as the initial deadlines in 2013 loom on the horizon. It makes for sobering reading. Turning to the state level of regulation, Elizabeth Lokey Aldrich and Cassandra Koerner analyze existing and possible legislation pertaining to pore space designation, an issue that has taken on greater significance as commercialization of carbon capture and sequestration is debated. Their conclusion: to date, the legislation that has passed does not provide an environment that would lead to the successful CCS commercialization.
And while allowing the federal government to assume pore space ownership would not solve all the problems, it certainly would simplify some of them by reducing the amount of future litigation. In our next article, Floyd L. Norton IV and Michael Keegan explore the practical consequences arising from the Federal Energy Regulatory Commission’s efforts last September to foster competition in the secondary transmission markets. The practical effects, they warn, remain to be seen, particularly because resellers remain liable to transmission providers even after they’ve reassigned transmission capacity, and because the rules governing the transfer of rollover rights have not yet been established. Steven Michel returns to an intriguing approach he has been exploring in The Electricity Journal, offering a model clean energy standard that, he argues, can drive absolute CO2 reductions while remaining indifferent to generation type. It awards credits based upon relative CO2 emissions and retires credits in a system that encourages energy efficiency. Pierre Bull, Noah Long and Cai Steger explore issues related to the implementation of feed-in tariffs as a means of
The Electricity Journal (ISSN 1040-6190) is published monthly, and bi-monthly in January/February and August/September by Elsevier Inc., 360 Park Avenue South, New York, NY 10010-1710. Periodicals postage paid at New York, NY, and at additional mailing offices. Postmaster: Send address changes to The Electricity Journal, Elsevier, Customer Service Department, 11830 Westline Industrial Drive, St. Louis, MO 63146, USA. Web site: www. elsevier.com/locate/tej
Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected] Publisher Clare Lehane [email protected]
fostering the scaling up of clean, distributed generation. The authors show how FITs can fit into a policy framework to maximize a diverse portfolio of clean energy, and provide some general principles for FIT policies in the U.S. Turning to the arena of corporate governance, Julia E. Sullivan and Jennifer Good offer some guidelines on structuring compensation in an era of greater scrutiny of executive pay. More than ever, they write, it’s important to have a fair and prudent compensation system in place and to carefully monitor pay practices, ensuring that executive pay remains competitive yet reasonable given the currently challenging economic conditions. Finally, Andrew DeBenedictis, David Miller, Jack Moore, Arne Olson and C.K. Woo offer a close-grained analysis of forward pricing data from the Pacific Northwest to identify the existence of a relatively large risk premium, with the implication that forward contract buyers are more risk-averse than sellers. RICHARD COHEN GERRY KHERMOUCH
Subscription rates: euro 109 for European countries and Iran; USD 117 for all countries except Europe, Japan and Iran (personal price). Euro 685 for European countries and Iran; USD 767 for all countries except Europe, Japan and Iran (institutional price). Editorial office: 954-659-0061 Fax: 954-659-0062
The members of The Electricity Journal’s Editorial Advisory Board listed below have graciously agreed to assist us in identifying appropriate topics and authors for each issue, and to review articles in advance of publication when asked We and our readers are continually enriched by their generosity, their ideas, and their critical comments. Responsibility for what appears on these pages is, however, entirely our own.
John A. Anderson, Executive Director Electricity Consumers Resource Council
Sue Kelly, Vice President of Policy Analysis and General Counsel American Public Power Assn.
Miles Bidwell, President Bidwell Associates, Inc.
Ashley C. Brown, Executive Director, Harvard Electricity Policy Group John F. Kennedy School of Government, Harvard University
Ralph Cavanagh, Senior Staff Attorney Natural Resources Defense Council, San Francisco
Reinier Lock, Attorney Washington, DC
J. Robert Malko, Professor of Finance Utah State University
Steven A. Mitnick, Chief Executive Officer Conjunction LLC, Washington, DC
David K. Owens, Executive Vice President, Business Operations Group, Edison Electric Institute
Scott Hempling, Attorney-at-Law, Executive Director National Regulatory Research Institute
Benjamin Hobbs, Professor, Department of Geography and Environmental Engineering, The Johns Hopkins University
William W. Hogan, Raymond Plank Professor of Global Energy Policy John F. Kennedy School of Government, Harvard University
Paul L. Joskow, Elizabeth and James Killian Professor of Economics and Management Massachusetts Institute of Technology
Edward Kahn, Principal Analysis Group/Economics, San Francisco
Joshua Z. Rokach Silver Spring, MD
Mohammad Shahidehpour, Bodine Distinguished Professor and Chairman, Electrical and Computer Engineering Department Illinois Institute of Technology Chicago
F.P. Sioshansi, President Menlo Energy Economics, San Francisco
Irwin Stelzer, Director, Regulatory Policy Studies, Hudson Institute
Richard D. Tabors, Vice President Charles River Associates, Boston