July 29, 2009

With carbon cap-and-trade legislation wending its way through Congress in the early part of the year, many electric power companies were taking a wait-and-see attitude toward new plant construction. And wait. And wait.

That doesn't tell the whole story, though, as many producers are doing more than wait -- they are canceling coal plants outright. According to the Edison Electric Institute, at least nine coal plants representing 6,650 megawatts have been canceled by May 2009, joining 24 plants that were scuttled in 2008.

July 27, 2009

Times are tough inside utility boardrooms. A biting recession and volatile energy prices are creating a backlash among the various constituencies, forcing those members to generally stifle pay raises and especially those for top managers.

Executives must be concerned about the messages that their compensation deals are sending to employees and shareholders. It's particularly true in a difficult economy when companies are cutting expenses and reducing staff. Workers don't mind seeing their chief executives get rewarded for good work. But they, too, want to be compensated if they deliver results. Now, though, it is time to hunker down so as to emerge lean and mean when the coast is clear.

July 24, 2009

The federal stimulus package is expected to give rise to utility-related telecom spending and spearhead what may become the third link into consumers' homes -- one that would provide high-speed broadband access. Utilities, with their ubiquitous wires, will almost certainly make an indelible contribution to community development.

While utilities are focused on their bread and butter enterprises, they are positioned to prosper in the New Energy economy. They, in fact, own the rights-of-way where the fiber allowing for high-speed Internet access would be laid. Their role would be divided between providing advanced energy services and traditional Internet offerings -- a service that they would likely outsource to other, more knowledgeable retailers.

July 22, 2009

Not long ago, the notion of adding reliability and intelligence to utility operations seemed arcane and dull. Now it has become vogue. The latest such advance is in the area of reducing transmission line losses and thereby increasing reliability.

The so-called high-temperature superconducting cable can virtually eliminate the resistance to electricity flow, thereby greatly increasing the efficiency of the wire. And while the technology is now expensive, government agencies are pitching in and trying to get those next generation wires into the mainstream. In time, it will succeed. The demand for power will not abate and will therefore necessitate the deployment of cutting-edge tools to enhance grid security.

July 20, 2009

Exelon Corp. hungers to buy NRG Energy. But its "final" offer may still be inadequate. NRG's board is urging its shareholders to reject the hostile bid, noting that the utility has exceeded expectations while Exelon has not.

Exelon's July 2 proposal to buy the merchant generator that sells its power at market prices comes eight months after its first bid. But this time, the Chicago-based conglomerate has upped the ante by 12 percent and thereby pegged the total value at $7.73 billion in stock. And while Exelon has said the reason it increased its bid is because it has identified an additional $1.5 billion in synergies, the reality is that NRG's share price has graduated higher than the original bid.