June 23, 2008

The rising cost of materials and labor has the potential to put an end to the nuclear renaissance before it ever gets started. Company estimates that have been released show costs for an individual unit could be as high as $12 billion, and one consultant expects those estimates could rise if material prices continue to escalate.

Florida Power & Light told the Florida Public Service Commission late last year that the cost for building new units at Turkey Point in south Florida could be up to $8,000 per kilowatt -- or $24 billion for two units. Earlier this year, Progress Energy pegged its cost estimates for two new units on Florida's west coast at about $14 billion plus $3 billion for transmission and distribution. While Progress' estimates are lower than FPL's, they are more than twice as much as the $2,000 per kilowatt that industry contractors promised for new nuclear plants just two years ago.

By Paul Davidson, USA TODAY

Here's a shocker: Electricity bills are heading up. Way up.

Utilities across the USA are raising power prices up to 29%, mostly to pay for soaring fuel costs, but also to build new plants and refurbish an aging power grid.

Even more dramatic rate increases are ahead. The mounting electric bills will further squeeze households struggling with spiraling gasoline prices.

"Consumers now face a tough reality on electricity," says Mark Cooper of Consumer Federation of America.

June 4, 2008

Electricity is in the air now that that NRG Energy had bid $11.3 billion for Calpine Corp. If the deal between the two unregulated power merchants goes through, it would send a positive economic vibe that, despite liquidity concerns, the sector will remain vibrant.

After a severe trough, independent power producers appear poised for takeoff. As individual enterprises, though, they lack the financial wherewithal and the economies of scale to increase productivity and efficiencies. Through consolidation, they can achieve such gains -- all within the context of expected generation shortages combined with projected rises in demand. Risks still exist, however, as uncertain regulations, escalating construction costs and stiffer lending standards dampen the atmosphere.

June 6, 2008

Coal will continue to be the engine that carries the nation forward. But it will have to be re-invented to comport with changing environmental and economic standards.

That is the tone set by the National Coal Council, which in a presentation to the U.S. Department of Energy says that "clean coal" will become the foundation of national energy policy. It provides energy security and economic prosperity -- all at a time when the global demand for power and gas is expected to continue rising.

The coal group has a tough job ahead. The international community is focused on reducing global warming pollution and on promoting the use of alternative fuels. As such, state regulators in this country are clamping down on proposed coal facilities while key investment bankers have said they will compute the cost of carbon emissions when deciding how much to charge for such loans.

May 23, 2008

Some utilities are going full steam ahead. They are going after rail carriers, saying that those enterprises are exploiting their market power and causing captive shippers to pay inflated prices.

As such, utility associations and coal operators say that railroads' exemptions from federal antitrust laws must be deleted. While they have strong support, those interest groups face an uphill fight. Rail transportation is gaining appeal from those who say its energy and environmental advantages are the wave of the future.