Regulation, Cost Turbulence Generate a Clean Power Play
In the game of Monopoly, the Electric Co. is a safe, dull play; it is priced low and generates modest income. In the real world, though, the electricity business is rougher than a rodeo bull ride: Governments have joined environmental activists in challenging permit applications for new coal-fired power plants, prices for coal and natural gas are volatile as never before, and states are requiring utilities to meet growing proportions of electricity demand with renewable energy.
The unsettled action has been escalated further by Congress’ piecemeal extension of renewable-energy investment- and production-tax credits, increasing the risk in long-term investment decisions. Developers insist that renewable-energy projects will die if the credits expire, but investor-owned utilities, driven by renewable portfolio standards and with recourse to cost recovery, say they will build even without the credits.