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IBC - Editorial Board
Editorial Advisory Board May 2014 • Volume 27, Issue 4
I
n this issue . . .
With our opening article this month we return to the issue of nuclear power, and whether or not the much-anticipated renaissance can actually occur. Mary Anne Sullivan, Dan Stenger, Amy Roma and Matt Tynan offer a rundown of technological and regulatory innovations that are changing expectations for the next-generation nuclear fleet and offer some modest policy suggestions that might help secure for nuclear power what they view as an appropriate share of a balanced generation mix for the future. Our Editorial Board member Ken Costello continues his thoughtful and thorough re-examination of the fundamental tenets of regulation with a schema for the evaluation of alternative rate mechanisms by state utility commissions. At a more micro level, Larry Blank and Doug Gegax zero in on a long-running debate regarding the amount of demand-related costs that should be recovered through the energy charge versus the fixed monthly customer charge. The evidence suggests that it is correct to collect most of the demand-related capacity costs through the kilowatt- hour energy charge, they conclude. On the climate change front, Shankar Chandramowli and Frank F. Felder make the case that recent advancements in climate data
projections have opened up the possibility of incorporating climate data in power systems planning, providing both a set of challenges and opportunities. The Washington-based consultant Harry H. Istepanian offers a sobering, unflinching look at the dire financial condition of the Iraqi power sector, showing how the government’s intervention in tariff-setting has created losses that it can no longer sustain. The highest policy priority, he argues, should be to rebalance the structure of tariffs and realign prices with underlying costs, in part to restore revenue adequacy and generate internal funds for capital investment and in part to eliminate poorly targeted and inequitable subsidies that have created this unsustainable fiscal burden. Debabrata Chattopadhyay and Shikha Jha also look at distortions to the market, this time in Southeast Asia, exploring the impact of energy subsidies among the so-called ASEAN-5 nations, and the complex tradeoffs these subsidies entail. Amy Sopinka and Lawrence Pitt celebrate – and dissect – the fiftieth anniversary of the Columbia River Treaty, as we approach a September 2014 milestone at which either partner, the U.S. or Canada, can announce its desire to terminate participation. Already, the authors note, there appears to be a significant chasm between the two countries with respect to how they will allocate the costs and benefits associated with future coordinated operations.
On the technical side, using Vermont as a case history, Steven Letendre, Bruce Bentley and David Dunn offer an assessment of how today’s highly efficient heat pump technology offers a chance to transition back to electricity as an energy source for home heating, at a savings both in money to consumers and in greenhouse gas emissions to our beleaguered planet. Derek E.H. Olmstead and Matt J. Ayres offer insight into how the small energy-only market in Alberta, Canada, serves as a Petri dish of sorts in examining how, despite the clear exercise of market power, the market can still be viewed as effectively competitive. They note both the implications and outstanding questions of this, while acknowledging that it is unclear whether the Alberta framework is applicable elsewhere. We conclude with an exhaustive analysis by Benjamin K. Sovacool, Daniel Nugent and Alex Gilbert of a database of 401 power plant and transmission projects in 57 countries that offers the perhaps un-startling conclusion that cost overruns are pervasive. More absorbingly, though, the authors review how hydroelectric dams, nuclear power plants, wind farms, and solar facilities each have their own unique set of construction risks. ■
Richard Cohen Gerry Khermouch
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
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
Frank A. Felder Bloustein School of Planning and Public Policy, Rutgers University, New Jersey
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
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.
Web site: www. elsevier.com/locate/tej
Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected] Publisher Katherine Eve [email protected]
Subscription rates: euro 114 for European countries and Iran; USD 123 for all countries except Europe, Japan and Iran (personal price). Euro 725 for European countries and Iran; USD 812 for all countries except Europe, Japan and Iran (institutional price). Editorial office: 954-659-0061 Fax: 954-659-0062
Edward Kahn, Principal Analysis Group/Economics, San Francisco
Sue Kelly, Vice President of Policy Analysis and General Counsel American Public Power Assn.
J. Robert Malko, Professor of Finance Utah State University
Janine Migden-Ostrander, Principal, The Regulatory Assistance Program
Steven A. Mitnick, President, Build Energy America Senior Energy Advisor, Bates White Economic Consulting
David K. Owens, Executive Vice President, Business Operations Group, Edison Electric Institute
Varun Rai, Assistant Professor, The LBJ School of Public Affairs, The University of Texas at Austin
Joshua Z. Rokach Lexicon Strategy Group, Washington
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
I
n this issue . . .
With our opening article this month we return to the issue of nuclear power, and whether or not the much-anticipated renaissance can actually occur. Mary Anne Sullivan, Dan Stenger, Amy Roma and Matt Tynan offer a rundown of technological and regulatory innovations that are changing expectations for the next-generation nuclear fleet and offer some modest policy suggestions that might help secure for nuclear power what they view as an appropriate share of a balanced generation mix for the future. Our Editorial Board member Ken Costello continues his thoughtful and thorough re-examination of the fundamental tenets of regulation with a schema for the evaluation of alternative rate mechanisms by state utility commissions. At a more micro level, Larry Blank and Doug Gegax zero in on a long-running debate regarding the amount of demand-related costs that should be recovered through the energy charge versus the fixed monthly customer charge. The evidence suggests that it is correct to collect most of the demand-related capacity costs through the kilowatt- hour energy charge, they conclude. On the climate change front, Shankar Chandramowli and Frank F. Felder make the case that recent advancements in climate data
projections have opened up the possibility of incorporating climate data in power systems planning, providing both a set of challenges and opportunities. The Washington-based consultant Harry H. Istepanian offers a sobering, unflinching look at the dire financial condition of the Iraqi power sector, showing how the government’s intervention in tariff-setting has created losses that it can no longer sustain. The highest policy priority, he argues, should be to rebalance the structure of tariffs and realign prices with underlying costs, in part to restore revenue adequacy and generate internal funds for capital investment and in part to eliminate poorly targeted and inequitable subsidies that have created this unsustainable fiscal burden. Debabrata Chattopadhyay and Shikha Jha also look at distortions to the market, this time in Southeast Asia, exploring the impact of energy subsidies among the so-called ASEAN-5 nations, and the complex tradeoffs these subsidies entail. Amy Sopinka and Lawrence Pitt celebrate – and dissect – the fiftieth anniversary of the Columbia River Treaty, as we approach a September 2014 milestone at which either partner, the U.S. or Canada, can announce its desire to terminate participation. Already, the authors note, there appears to be a significant chasm between the two countries with respect to how they will allocate the costs and benefits associated with future coordinated operations.
On the technical side, using Vermont as a case history, Steven Letendre, Bruce Bentley and David Dunn offer an assessment of how today’s highly efficient heat pump technology offers a chance to transition back to electricity as an energy source for home heating, at a savings both in money to consumers and in greenhouse gas emissions to our beleaguered planet. Derek E.H. Olmstead and Matt J. Ayres offer insight into how the small energy-only market in Alberta, Canada, serves as a Petri dish of sorts in examining how, despite the clear exercise of market power, the market can still be viewed as effectively competitive. They note both the implications and outstanding questions of this, while acknowledging that it is unclear whether the Alberta framework is applicable elsewhere. We conclude with an exhaustive analysis by Benjamin K. Sovacool, Daniel Nugent and Alex Gilbert of a database of 401 power plant and transmission projects in 57 countries that offers the perhaps un-startling conclusion that cost overruns are pervasive. More absorbingly, though, the authors review how hydroelectric dams, nuclear power plants, wind farms, and solar facilities each have their own unique set of construction risks. ■
Richard Cohen Gerry Khermouch
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
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
Frank A. Felder Bloustein School of Planning and Public Policy, Rutgers University, New Jersey
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
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.
Web site: www. elsevier.com/locate/tej
Editor Richard Cohen [email protected] Managing Editor Gerry Khermouch [email protected] Publisher Katherine Eve [email protected]
Subscription rates: euro 114 for European countries and Iran; USD 123 for all countries except Europe, Japan and Iran (personal price). Euro 725 for European countries and Iran; USD 812 for all countries except Europe, Japan and Iran (institutional price). Editorial office: 954-659-0061 Fax: 954-659-0062
Edward Kahn, Principal Analysis Group/Economics, San Francisco
Sue Kelly, Vice President of Policy Analysis and General Counsel American Public Power Assn.
J. Robert Malko, Professor of Finance Utah State University
Janine Migden-Ostrander, Principal, The Regulatory Assistance Program
Steven A. Mitnick, President, Build Energy America Senior Energy Advisor, Bates White Economic Consulting
David K. Owens, Executive Vice President, Business Operations Group, Edison Electric Institute
Varun Rai, Assistant Professor, The LBJ School of Public Affairs, The University of Texas at Austin
Joshua Z. Rokach Lexicon Strategy Group, Washington
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