Blog: General

February 2013

These comments were submitted by Fred Grygiel*, Former Chief Economist NJ Board of Public Utilities.

The Hempling essay, “Utility Mergers: Who Has a Vision?”  is, as always, interesting and informing. Here are some observations based on my experiences with some very large merger cases in NJ such as Exelon/PSEG; First Energy/GPU; Pepco/Atlantic Electric; and AGL Resources/Etown Corp.

Please note this is a “staff” perspective about who has a vision . . . OK, here we go, the petition is filed:

February 2013

A colleague at a state commission was reviewing the 2010 paper I worked on for the National Renewable Energy Laboratory, entitled "Renewable Energy Prices in State-Level Feed-in Tariffs: Federal Law Constraints and Possible Solutions."  He was asking about ways to compensate renewable generators at levels exceeding avoided cost.

January 2013

—  SEE COMMENT FROM READER POSTED BELOW BLOG 

The precise definition of “unbundling” is often unclear. Some statutes identify it as “separately identifying and charging” for different services. Other textbooks define it as “making services separately available”. Understanding the concept is crucial to the process of figuring out how to de-integrate a vertically integrated utility:  “Unbundling” competitive functions from noncompetitive functions.

January 2013

What word best describes our utility industries' bumpy rides from monopoly markets to competitive markets?  "Evolution" implies natural, gradual change, stimulated by random events.  "Transition" is almost content-free, omitting any sense of who is doing what.   "Conversion" implies active decisions, decisions necessary to overcome resistance and inertia, decisions by government to change legal rights and obligations; by utilities to change asset ownership, pricing options and product mix; by non-utilities to change competitive strate

January 2013

A monopoly market structure does not, on its own, align compensation with performance.  How well does the regulatory process address this challenge?

December 2012

Within a utility’s assigned exclusive service territory, the incumbent cannot “pick and choose” which areas to serve. The utility may not slice its service territory into slivers and then serve only the most profitable. Some courts have found that this unconditional obligation can cause a utility to make large investments that produce little revenue, such as adding infrastructure to a low-population area in advance of load growth.