The ScottMadden Energy Industry Update – August 2014

August 2014

I Feel the Earth Move under My Feet

We are pleased to announce our Summer 2014 issue of THESCOTTMADDEN ENERGY INDUSTRY UPDATE. This semi-annual publication features our view of recent significant events and emerging trends in the energy industry.

 

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The energy and utility industries continue to anticipate and react to potential fundamental shifts in the 100+ year-old model of investment, regulation, and earnings. Policy and regulatory changes are big factors driving the design of the new landscape. For many of these changes, significant investment in existing and new infrastructure is needed across all parts of the energy value chain. And by the way, load growth is no longer, so investment and cost recovery are uncertain. Highlights include:

View from the Executive Suite (click here)	Utility Industry Concentration Lags Other Capital-Intensive Industries While utility consolidation continues, the sector lags other industries because of regulatory constraints and inherent "local" nature of energy infrastructure.   Also: Executive Summary CEO Themes: Message to Shareholders Utility Mergers and Acquisitions: Various Sectors, Various Rationales Yieldcos – A Fad or Here to Stay?
Energy Supply, Demand, and Markets (click here)	Fossil-Fired Generation: Ninth Inning for Some Units With more stringent mercury emissions regulations taking effect in 2015, along with the possible reinstatement of the Cross-State Air Pollution Rule, a large amount of fossil-fired generation is slated to retire in 2015 and 2016.   Also: Fossil-Fired Generation: Are Proposed Existing Source Greenhouse Gas Standards the Nail in the Coffin? Progress and Prospects for New Nuclear Renewables Development: More Steel (and Modules) "in the Ground," But Policy Uncertainty Remains a Barrier Natural Gas Midstream Infrastructure: Much Thought To Be Needed Power Demand and Prices: Peakier and More Volatile?—Is Enough Happening?
Managing the Energy and Utility Enterprise (click here)	The Polar Vortex: Can We Avoid Trouble Next Winter? In January 2014, extreme cold weather affected natural gas and electricity markets in the upper Midwest, the Northeast, and the Southeast for several days. For some regions, particularly the Mid-Atlantic, loss of available power generation nearly led to emergency conditions and gas pipeline capacity utilization was pushed to its limits.   Also: EPRI's Integrated Grid Vision Gas-Power Interdependence: No Shortage of Studies, But Will the Industry Be Ready for Next Winter? A Maturity Model Emerges for Renewable Energy Water and Energy: A Persistent Concern
Rates, Regulation, and Policy (click here)	Competitive Transmission: Why Is This So Hard? Order 1000 is introducing competition to the transmission portion of the electrical grid and substantially changes the landscape for transmission development.   Also: Organized Capacity and Energy Markets: The Saga Continues In a New York State of Mind: The Empire State's "Reforming the Energy Vision" Initiative Existing Source CO2 Emissions Regulation: Dealing with the Muddle Latest in Regional Competitive Processes Under Order 1000 LNG Exports: Application Reshuffling and More Studies, But Development Continues Current Regulatory Landscape: You Can't Always Get What You Want...But Can You Get What You Need? Current Regulatory Landscape: Authorized Returns Have Declined, But Actual Results Are Improving

We hope you will find THE SCOTTMADDEN ENERGY INDUSTRY UPDATE to be a useful and informative resource. If you would like to discuss our observations in greater detail or have us present them or our views on other industry or management issues to your executive team, please contact us. View our Energy Practice area.

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