Electric Light & Power - September, October 2009 (Malestrom)

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Sep|Oct|2009
volume 87|05
www.elp.com
Climate Policy
Risk Management
Is Carbon Recycling
a Viable Alternative?
Energy Storage
for System Regulation
Big Solar,
Small Footprint
Signs of Weakness
2008 Utility Financial Rankings
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to access
Spring Energy 2009
Catalogue
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The business of power for utility executives
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How can we get by with less when the

whole world keeps asking for more?
Getting more and more energy from fewer and fewer resources
is our never-ending mission.
In addition to excellent availability and utmost reliability, efficiency is a key requirement when it comes to
supplying energy for the worlds steadily growing megacities. Basically, its all about making best use of all
resources. We apply this principle across the entire energy conversion chain to take efficiency to totally new
levels. Our new 800 kV transformer, for example, makes possible the efficient transmission of electric energy
in the gigawatt range over distances of 850 miles and more. And our new generation of gas turbines makes
combined cycle power plants deliver a record-breaking efficiency of more than 60 per cent.
www.siemens.com/energy
Answers for energy.

Go to http://uaelp.hotims.com for more information.
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Smart Distribution Solutions

Automatically detect and isolate faults, restore power,
and monitor demand.
The distribution solutions you use today from SELprotection, communications,
sensing, monitoring, security, and controlall make your grid smarter. These smart
solutions pay for themselves by improving grid safety, reliability, and efficiency.
To learn more about how to make your distribution systems smarter, please visit our
website at www.selinc.com/9elp.
Schweitzer Engineering Laboratories invented the

worlds first digital distance relay 25 years ago,
improving how the power system provided you with
electric power. Our E.O. Schweitzer Manufacturing
Division has designed and manufactured fault
indicators and sensors for 60 years. Together we are
the technology leaders offering a complete range of
distribution automation solutions for electric power
systems in utilities, industry, and commerce.
www.selinc.com
info@selinc.com
+1.509.332.1890
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Sep|Oct|2009
volume 87|05
Events 6
38
Commentary/Letter to the Editor 8
COLUMNS
40 Econamine FG PlusSM
EE: Priniciples and Practice 12
CO2-Capture Technology
by Dennis W. Johnson; Satish Reddy,
Ph.D.; Donald E. Broeils; and James
H. Brown, PE, PMP, Fluor Corp.
How Low Can We Go? Driving

to Zero Net Energy Buildings
by Penni McLean-Conner, NSTAR
12
Benefit of Counsel 14
Renewables
42 Solar Rising
Long-term PPAs
by Andrew Schifrin and Larry Eisenstat,
Dickstein Shapiro LLP
by Robert Rogan, eSolar
46 Concentrating Solar Thermal
Economic Inquiry 16
Energy and its Uses

by Roger Molina, PE, The M8Group
Multipurpose Megawatts:
How Markets Define New Values
by Tanya Bodell, CRA International Inc.
48 Big Solar, Small Footprint: The Role

Innovative Technologies
Play in our Energy Future
by Nancy Hartsoch, Solfocus Inc.
Taking It Into Account 18

Misguided Market Design
or Market Manipulation?
by Dan Watikiss, Bracewell & Guiliani
Energy Management
52 Energy Storage for System Regulation:
FEATURES
Industry Report 20
48
The 2008 Utility Financial Rankings

Showing Signs of Weakness
by Teresa Hansen, editor in chief
Why its Becoming Important

by Nancy Hartsoch, Solfocus Inc.
54 Outage Management
and Customer Relationships
by Guerry Waters, Oracle Utilities
SECTIONS
Finance
Utility Financial Performance: 28
Warning Signs Ahead
by Brad Kitchens and Greg Litra,
ScottMadden Inc.
Carbon Recycling: An Alternative

to Carbon Capture and Storage
by Rowan Oloman, contributing author
IT/CIS & CRM

56 Retrieve That Data ... and Make IT Snappy!
by Kristen Wright, associate editor
58 The Smart Way to Protect the Grid
60
From Cybersecurity Threat

by David Owens, Edison Electric Institute
Pursuing Government Grants 32

by Michael A. Casey Herman and Phil Koos,
PricewaterhouseCoopers
59 Planning for Another Challenging Year

by Jerry Duvall, CS Week
Generation
Climate Policy Risk Management 36
in the Electricity Industry
by Richard Sandor and Michael Walsh,
Chicago Climate Exchange
T&D
60 Investment in New Transmission Projects
Remains Strong
by Thomas F. Garrity, Siemens
The Uncomfort Zone

66 Bleed it Out
66
By Robert Evans Wilson Jr.

Cover photo: Copyright Jose Marafona
4 | ELECTRICLIGHT&POWER
Sep|Oct|2009
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We need partners that
understand our vision

for the Smart Grid.
Aclara leads.
Aclara understands that utilities need to do more
than collect data. We are driving a future that
integrates AMI, SCADA, distribution automation,
and more into an Intelligent Infrastructure with
the capability for communications and control.
With the strength of our solutions for electric,
gas, and water utilities, we understand your
vision. With our network we will take you there.
Aclara Leads.
Capturing data. Liberating knowledge.

Find out more at Aclara.com
1.800.297.2728 | info@aclara.com
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EVENTS
OCTOBER
Oct. 19-21
The Business of Plugging
In: A Plug-In Electric
Vehicle Conference
Center for Automotive Research
http://pev2009.com
Oct. 21-22
Entelec Fall Seminar Series
Entelec
Denver
http://entelec.org
Oct. 21-22
Rate Case Cost Recovery:
Addressing Energy Efficiency,
Demand Response,
Renewable Energy, and
Smart Grid Investments
EUCI
Los Angeles
http://euci.com/
conferences/1009-rate-case
_______________
Oct. 26-28
Corporate Energy
Management Summit
IQPC
Chicago
http://corporateenergysummit.
com
__
Oct. 26-29
Air Quality VII: An International
Conference on Carbon
Management, Mercury,
Trace Elements, SOX, NOX,
and Particulate Matter
Energy & Environmental
Research Center
Arlington, Va.
http://undeerc.org/AQ7
NOVEMBER
Nov. 9-10
Generation Summit VI Fall 2009
EUCI
Atlanta
http://euci.com/
conferences/1109-ccs/
____________
agenda/php?ci=824
___________
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Editor in Chief
Teresa Hansen
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Senior Editor
Kathleen Davis
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Associate/Online Editor
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West Regional Sales Manager

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Exhibitor Service Manager DistribuTECH

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Chairman
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Senior Vice President, Planning, Development

& Strategic Policy Advancement
Jayne A. Gilsinger
ELECTRICLIGHT&POWER is the official print publication of
May 2428, 2010 : Nashville, Tenn.

ELECTRICLIGHT&POWER is the official supporting publication of
March 23-25, 2010 : Tampa (Fla.) Convention Center

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Sep|Oct|2009
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BUILDING A WORLD OF DIFFERENCE
You cant wait for climate

change consensus
> Climate Strategy Best Practices

> Environmental Strategic Planning
No matter what your personal beliefs are, or what your corporate
> DSM and Energy Efciency Planning
position is, climate change is an issue that has to be addressed.
> Generation Technology Assessments
Enterprise Management Solutions (EMS), the management
> Carbon Footprinting
consulting division of Black & Veatch, can help you determine
> Carbon Price Modeling
what you can do todayto manage demand, identify risk and
> Emissions Market Analysis
exposure, and deal with challenges from sustainability and energy
> Abatement Technology Review
assurance to water scarcity. Our Climate Change Pathnder

methodology will help you chart your best long-term course. Why
wait, when you can have our long-view expertise, deep technical
skills and nearly 100 years of experience at your ngertips? Visit
us on the Web at www.bv.com/consult, or call 913-458-3440.
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Commentary
Smart Grid Success Will Require Customer Cooperation
In a few weeks, the U.S. Department of Energy (DOE) will announce
which utilities will receive the first round of stimulus funding made available by the American Recovery and Reinvestment Act, commonly called the stimulus plan. It will make available $4.5 billion
for smart grid projects that, according to Energy Secretary Steven Chu, will be a down payment on
our nations clean energy economy. The moneys No. 1 purpose is to preserve and create jobs, but
Chu and other industry experts have said the funding will jump-start needed modernization of the nations electricity
grid, helping the United States reach DOE goals of a clean energy economy.
Since the stimulus funding was created and announced in February, utilities have been feverishly working with
vendors and consultants to complete the stimulus applications and raise the matching funds required of companies
that are awarded stimulus funds. By the Aug. 6 deadline for the first round of funding applications, more than 45
utility companies had applied for about $4 billion. Much of the money is planned for smart metering or advanced
metering infrastructure (AMI) projects aimed at enabling customers to better manage their energy use.
Once implemented, these AMI projects are expected to result in a substantial reduction in peak electricity
demand. Reduced demand should reduce the need to build more generation, resulting in a reduction in the countrys
greenhouse gas emissions and the impacts of global warming.
In addition to the work associated with completing the applications, utilities, vendors, government agencies and
other stakeholders have been working with the U.S. Commerce Departments (DOCs) National Institute of Standards and Technologies (NIST) to develop smart grid standards. They have made significant progress. Six months
after beginning the standards development process, the DOC released in September a draft report, NIST Framework
and Roadmap for Smart Grid Interoperability Standards, which identifies about 80 initial standards. Work on standards is continuing.
Much work also is being done to assure that a smart grid will be secure from cyberattacks. And, utilities and
lawmakers are discussing new policies and regulations that will allow utilities to realign their business models to
achieve the smart grid goals and still create revenue for stockholders.
One critical area, however, that might not be getting the attention it needs is convincing utilities customers to
embrace the programs that will be made available with a smart grid. As I mentioned, much of the stimulus money requested is planned for AMI projects. If these projects are approved for stimulus funding, millions of residential smart
meters will be installed, and with these installations will come numerous energy efficiency and demand response
programs for utility customers. At least initially, most of these programs will require customer buy-in and behavior
changes. To cut peak demand to the degree it will be needed, utilities must create and customers must participate in
new programs. Gaining customer participation will not be easy. Someone who works in the customer service area
of a large investor-owned utility told me recently that her company is having little success persuading customers to
enroll in electronic bill payment. She said that less than 5 percent of the utilitys residential customers pay their bills
electronically. Compare that with the credit card industry in which more than half of all credit card bills are paid electronically, and eight out of 10 credit card holders said being able to view their bills online was important to them. The
credit card industry has had much more success connecting with its customers. If utilities cant convince customers
to try electronic billing, will they be successful at convincing them to change their behavior?
The smart grids success at lowering electricity demand depends on customer behavior. If residential customers do not respond to utilities programs aimed at reducing electricity usage, a lot of money is going to be
wasted.
Improving the power grids efficiency and reducing the need for more generating makes much more sense economically and environmentally than building new power plants. A few hurdles must be cleared, and customer participation is probably the biggest. Utilities are used to tackling technology issues and dealing with regulatory issues. For
many, however, developing a range of products and services that will please different customers is new. Recruiting
product and service development expertise from banks and credit card companies might be a good strategy.
Teresa Hansen, editor in chief

Sep|Oct|2009
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Its time for reality about the smart grid.

The smart grid is a journeyone that ends with new ways to think about, manage and use our
precious energy resources. That journey starts here: www.smartgridreality.com
For the smart grid to mature, we need an honest discussion, stripped of the hype. Itrons new
site outlines what we see as critical components to making the smart grid a success.
Ready to know more? Visit www.smartgridreality.com for a dose of reality.
w w w. s m a r t g r i d r e a l i t y. c o m
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Letters to the Editor
Please send your comments and letters to Editor in Chief Teresa Hansen, teresah@pennwell.com.
Dear Editor:
Although some short-term savings may be realized by
purchasing infrastructure (transformers, cable, transmissions
structures) from foreign countries, in the long term this will
reduce our domestic manufacturing capabilities. This is a
homeland security issue, and if and when that manufacturing
capability is required, it wont be under our control.
Jim Stephenson, P.E.
West Islip, N.Y.
{In reference to Achieving Breakthrough Savings From
Low-cost Countries, July/Aug. 2009]
***
Dear Editor:
Ninety-five percent of the electricity consumed in Indiana
comes from coal, which means Hoosier consumers have
enjoyed some of the lowest rates in the nation. In tough
economic times like these, affordable electricity is something
we cant do without. Yet a bill that has made its way through
the U.S. House of Representatives threatens to rob our
consumers of that very necessity. On June 26, the U.S. House
of Representatives approved H.R. 2454, the American Clean
Energy and Security Act 2009 (ACES), otherwise known as
the Waxman-Markey cap-and-trade bill. The measure passed
by a marginal vote of 219-212, indicating how diverse views
are on this issue. While improvements were made to the bill
before it passed the House, Indianas not-for-profit consumerowned municipal and cooperative power providers have
serious concerns about the impact this legislation will have on
residential, commercial and industrial customers in Indiana.
One improvement in the bill was an adjustment from a
100 percent auction of carbon emission allowances to a partial
auction, with some free allowances being given to carbonemitting entities. However, Indiana utilities are being shorted
more than 35 percent beginning in 2012. Too many allowances
are being provided to nonemitting sources and special interest
groups, such as merchant generating plants that do not directly
serve customers. The end result is a redistribution of wealth
from the Midwest, which is heavily reliant on coal for electricity
generation, to the East and West coasts, which are not. The
distribution of allowances to East and West coast states and
merchant plants will do nothing to reduce carbon emissions
and will dramatically increase Indiana electric rates.
Under the current allowance allocation formula,
Indianas not-for-profit utilities receive less than 65 percent
of allowances needed to meet consumer needs, requiring us
to purchase more than 35 percent of the allowances in an
unregulated and speculative trading market.

As it now stands, the ACES Act could have a devastating
effect on Indiana ratepayers and our state economy. Electric
rates would increase at least 20 percent by 2012, and could
double by 2026. This would be an undue hardship for our
economy, industry and fixed-income residential customers.
As further debate takes place, we continue to
recommend:
That the emissions formula be fixed to provide allowances

only to entities that directly serve consumers with power
from carbon-emitting resources.
That utilities receive up to 100 percent of the allowances

needed to comply with the mandate to minimize the rate
impact of the cap-and-trade program. Allowance prices
should have a safety valve to mitigate price spikes.
That the unrealistic emissions reduction mandate of 17

percent below 2005 levels by 2020 be amended to a reasonable and achievable level. Such a revision is necessary
to provide breathing room for utilities to invest in carbonreduction technology without dramatically increasing our
Indiana electric rates, hopefully preventing further loss of
business and industry.
That Congress fund research and development into

carbon-reduction technologies to meet carbon-cap mandates.
We are not opposed to climate change legislation; we
simply seek to protect our members and their consumers,
the ratepayers of Indiana. The current ACES Act does not
safeguard against unfair price increases to Indiana consumers.
We encourage you to engage your congressmen on this issue.
We will continue spreading the message of this bills negative
effect on Indiana and keep doing our part to protect Indianas
electric rates. We urge consumers to contact Sens. Richard
Lugar and Evan Bayh and voice their support for a fair, balanced
and affordable approach to climate change legislation. Learn
more about the issue at http://fairpowernow.org.
Raj Rao,
president & CEO, Indiana Municipal Power Agency
Steve Smith,
president & CEO, Hoosier Energy
Rick Coons,
president & CEO, Wabash Valley Power Association
Bruce Graham,
CEO, Indiana Statewide Association of Rural Electric
Cooperatives
Sep|Oct|2009
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~ A MESSAGE FROM THE SUN ~
GENERATE
CLEAN ENERGY
LOCALLY. INVEST YOUR
ENERGY DOLLARS LOCALLY. I MAY BE
BIASED, BUT THIS SOUNDS LIKE A POWERFUL IDEA.

Greetings Friends. Everyone knows my energy can help lessen your carbon dioxide output.
But did you know it can help your local economy as well? Heres how it works: a local entrepreneur
builds a SunFab factory in your community. The factory produces the worlds largest and most
powerful solar panels. A local utility buys the panels and installs them in a number of 5-20MW
solar farms, avoiding costly transmission upgrades. 2,500 people get jobs. 400 million energy
dollars go into the local economy annually. As a nice side-benefit, greenhouse emissions are
reduced for decades to come. Thats the power of a fab2farm solution centered around a single
SunFab line. Personally, I think its one of the best ideas Ive heard in the past four billion years.
PROUD SPONSOR OF THE SUN.

For over 40 years, Applied Materials has been the world leader in nanomanufacturing technology,
and is now the world leader in solar photovoltaic manufacturing equipment.
fab2farm.com
Applied Materials and the Applied Materials logo are registered trademarks in the U.S. and other countries. 2009. All rights reserved.
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COLUMN
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EE: Principles and Practices
How Low Can We Go? Driving

to Zero Net Energy Buildings
by Penni McLean-Conner, NSTAR
Reducing energy waste has become
a top priority in many states, hence the
rapid development and expansion of
energy efficiency (EE) programs nationwide. Many energy thought leaders
ponder, How low can we go? Can we
achieve zero net energy buildings?
Author
Yes, and zero net energy buildPenni McLean-Conner ingswhich combine aggressive EE
is the vice president of measures with renewable distributed
customer care at NSTAR, generation such as solarare in producthe largest investor- tion in the U.S. and around the world.
Massachusetts is one of several
owned electric and gas
utility in Massachusetts. states that have found zero net energy
McLean-Conner, a buildings save energy costs and reduce
registered professional greenhouse gas (GHG) emissions. The
engineer, serves on state has developed recommendations
several industry boards to make zero net energy buildings the
of directors, including norm by 2030. As utilities advance their
the Massachusetts EE programs, it is important they deTechnology velop, understand and test strategies to
Collaborative and CS ensure zero net energy buildings are apWeek. Her latest book, propriately developed.
Energy Efficiency:
Principles and
Practices, is available
at http://pennwell
books.com.
approaches:
Zero net site energy: Energy produced on-site is at least equal to the
energy used.
Zero net source energy: Energy
produced on-site is at least equal to
the energy used when energy use is
accounted for at its source. In this
case, there is accounting for energy
used to generate and deliver energy
to the building.
Zero net energy cost: The money
a building owner pays a utility for
energy services and use is at least
equal to the amount that the utility
pays the owner for generating and
exporting energy.
Zero net energy emissions: Onsite production of emissions-free,
renewable energy is at least equal
to the energy used that comes from
emissions-producing sources.
Piloting Zero Net Energy Buildings

Zero Net Energy: What is It?
There are a variety of definitions with
respect to zero net energy buildings. A
2006 Department of Energy National
Renewable Energy Laboratory publication, Zero Energy Buildings: A Critical Look at the Definition, defines four
A deep retrofit on a
house, for example,
involves advanced
and fairly invasive
EE measures that
radically improve the
energy performance
of an existing home,
such as an external
wall superinsulation
build out.
There are many efforts to advance building practices associated with zero net
energy buildings via pilots. These pilots
involve deep energy retrofits combined
with renewable distributed generation
achieving 50 to 90 percent reductions in
energy usage.
A deep retrofit on a residential
building, for example, involves advanced and fairly invasive EE measures
that radically improve the energy performance of an existing home. Dramatic energy reductions are achieved
by addressing all energy loads including space conditioning, appliances, plug
loads and hot water. These projects are
costly because building practices and
materials are not yet standardized.
Efficiency measures that address
buildings shells are fundamental in
achieving energy reductions associated
with zero net energy buildings. These
measures typically include an external
wall superinsulation build out, attic insulation enhancements, foundation wall and
slab insulation, extensive whole-house air
sealing and high-performance windows.
These shell enhancements require a build
out of existing shells that involve building out window frames to support deeper
walls and building out roof eaves.
The EE measures are combined with
renewable energy sources. These measures include leveraging natural daylight
to displace light fixtures, installing solar
hot water systems and augmenting with
distributed renewable generation.
To date in Massachusetts, five houses have completed deep retrofits. John
Livermore remodeled his 1973 house to
achieve zero net energy. His efforts should
reduce energy use for heating 70 percent.
Livermore installed solar generation and
hot water to address the remaining energy
needs. He expects to produce excess electricity equal to 1,500 kWh annually.
My motivation for taking action to
reduce our familys carbon footprint was
the understanding that carbon emissions
need to be reduced by about 90 percent
by 2030 in order to stabilize the earths
climate systems, and the realization that
I needed to take personal responsibility for reducing our emissions, Livermore said. We set out to demonstrate
what can be done to reduce the carbon
footprint of a suburban homeowner on
a modest budget, with an overall goal to
reduce our homes net energy usage by
90 percent. We are currently well on our
way to achieving this target.
As utilities and other EE program
administrators expand EE plans, they
should include development of zero
net energy buildings. With research and
pilots devoted to zero net energy buildings, standardized building practices and
materials will become market-ready,
catapulting these building practices to a
cost-effective measure.
Sep|Oct|2009
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Rough Made Easy.
Power plants are among the largest and most complex engineering and construction projects
in the world. Thats why customers turn to Bechtel when they need more power. For over 60
years, weve been providing governments and utilities with power facilities delivered on time
and within budget. Weve led the industry in every major sector, from fossil fuels to nuclear.
We set the pace for clean and efcient power generation, exploring renewable energy like
carbon capture, solar, geothermal and biomass, so our customers can meet their goals for
a sustainable future. Competing in a world hungry for power can be rough. Bechtel helps
make it easy.
BECHTEL POWER
Frederick, Maryland, USA

San Francisco
Houston
1-301-228-8609
London
New Delhi
www.bechtel.com
Shanghai
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COLUMN
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Benefit of Counsel
Long-term PPAs
by Andrew Schifrin and Larry Eisenstat, Dickstein Shapiro LLP
While renewable power generation
has been the belle of the ball in federal
and state energy policy, many renewable
projects have stalled because of their inability to secure financing.
Assuming a renewable projects
technology is proven, whether its economics will support standalone project
financing depends on one thing: predictA u t h o r able, long-term cash flows. The surest,
Andrew Schifrin is a most well-developed vehicle for estabpartner in Dickstein lishing project cash flows is the longShapiro LLPs Energy term power purchase agreement (PPA).
Practice. Reach him Encouraging prospective purchasers to
at 212-277-6534 offer renewable projects long-term PPAs
or schifrina@ with robust pricing would be the most
dicksteinshapiro.com. direct way of attracting capitaldebt
and equityneeded to finance renewLarry Eisenstat is the able generation.
Energy policymakers have been
head of Dickstein
Shapiros Energy sidetracked by indirect means of cash
Practice. E-mail him flow enhancement, such as tax credits,
at eisenstatl@ depreciation and loan guarantees. These
dicksteinshapiro.com subsidies, however, do not compensate
or call 202-420-2224. for the lack of a PPA. There have been
only one or two utility-scale renewable
generation facilities built in recent years
that operate entirely on a merchant basis,
i.e., that do not have a long-term PPA,
even though such projects would have
been eligible for substantial tax incentives. Conversely, virtually every utilityscale renewable project that entered into
commercial operation during this same
time has had a long-term PPA.
For decades, long-term PPAs have
been a key component of power project
development. As industry participants
know, the Public Utility Regulatory Policies Act (PURPA) led to the development of hundreds of power projects. The
primary reason for PURPAs success in
getting power plants built can be attributed to long-term PPAs with robust pricing, which many states required utilities
to offer to qualifying facilities.
Why do long-term PPAs work?
The answer is cash flow, a reliable and
predictable revenue stream that can be

financed. Lenders and investors can get
comfortable with technology risk associated with renewable generation when
a track record demonstrates the technology works. Lenders and investors can
get comfortable with construction risk
if a developer uses a proven turnkey
Energy policymakers have been

sidetracked by indirect means
of cash flow enhancement, such
as tax credits, depreciation and
loan guarantees. These subsidies,
however, do not compensate for
the lack of a power purchase
agreement. There have been
only one or two utility-scale
renewable generation facilities
built in recent years that operate
entirely on a merchant basis.
engineering, procurement and construction (EPC) contractor. And lenders and
investors can get comfortable with operational risk by considering resource
adequacy studies and knowing that a
qualified operator has been retained.
Lenders and investors, however, cannot
get comfortable with electric commodity
price risk and do not want to commit the
significant money required to finance a
power plant without certainty concerning a projects future revenue stream.
A long-term PPA from a creditworthy counterparty can eliminate commodity price risk and provide comfort that a
project will have sufficient revenues for

debt service, capital improvements and
variable operations and maintenance expenses.
There are ways to encourage utilities and others to offer long-term PPAs.
The PURPA-style approach of a state
mandate requiring utilities to offer longterm PPAs would be effective.
As we saw with PURPA, however,
this approach can lead to an acrimonious
and confrontational relationship among
contracting parties.
A better approach would incentivize utilities to enter into long-term PPAs
at prices generally reflective of the thencurrent costs of the renewable projects
construction and future production,
inclusive of a reasonable return on equity. By far the best way would be to assure utilities that should they enter into
such agreements, they would be able to
rate base all of their PPA-related costs
(including pass-through of purchased
power costs) and earn a return on those
costs exactly as if they were capital expenditures.
Moreover, utilities shareholders and ratepayers should benefit from
rate base treatment because it should
improve credit ratings, and that would
lower utilities cost of capital. Another
approach would be to give purchasers (utilities and other large end users)
under long-term PPAs a renewable
purchasers tax credit, called an RPTC.
Such an approach would be more efficient than the current PTC because it
would provide tax credits to entities that
could use them.
As we have witnessed from the governments cash-for-clunkers program,
direct payment incentives work. To accelerate renewable power development,
policymakers should focus on incentives
that would lead to market-priced, longterm PPAs and would allow renewable
projects to secure financing.
Sep|Oct|2009
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The Smart
Grid Choice
Oracle
SAP
GE
IBM
Meter Data Management

Mobile Workforce Management
Network Management
Customer Care & Billing
Middleware
The Most Complete Software Solution
oracle.com/goto/utilities
or call 1.800.275.4775

Copyright 2009, Oracle. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates.
Other names may be trademarks of their respective owners.
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Economic Inquiry
Multipurpose Megawatts:
Markets Define New Values
by Tanya Bodell, CRA International
Author
Tanya Bodell is vice
president of CRA
International Inc. E-mail
her at tbodell@crai.com.
The most important single central
fact about a free
market is that no
exchange takes
place unless both
parties benefit.
- Milton Friedman
Competitive wholesale electricity

markets in the U.S. have evolved substantially. There are now many ways an
electron, or the promise of an electron,
can generate value. As we move toward a
new energy economy, expect to see new
markets that define new values.
prices between day-ahead markets and

real-time spot markets created implicit
arbitrage opportunities. Virtual markets
arose to allow for explicit hedging
opportunities. Competition has since
whittled down the differential to reflect
a day-ahead risk premium.
Energy-only Markets
Financial Transmission Rights
Energy-only markets conceptually pay

a single price for power. This price is
supposed to cover the variable costs
of production (e.g., fuel and variable
operations and maintenance) and the
fixed costs (e.g., capital investment and
the return on that investment required to
encourage new entrants). Market price
caps, however, limit the magnitude of
price spikes, resulting in missing money
otherwise required to cover fixed costs
of production.
Locational marginal pricing considers

transmission constraints in setting the
market clearing price. For those markets
with nodal pricing, markets for financial
transmission rights hedge the basis
differential between generation node
and delivery point.
Capacity Markets
Capacity markets developed to
cover the missing money that power
suppliers could not earn in energy-only
markets. New England, New York,
PJM Interconnection and Midwest
Independent Transmission System
Operator Inc. (MISO) have implemented
capacity markets in some form, and prices
have been set by competitive auctions for
future megawatts of capacity. Demandside response has been a big winner in
some of these markets, foreshadowing
the potential for price-responsive retail
consumption to participate in wholesale
markets.
Virtual Markets
Several wholesale electricity markets
include day-ahead and real-time
settlement. Day-ahead markets allow the
market operator to schedule generation
resources and set prices for market
participants in advance of actual realtime prices. The divergence of settlement
Generation Attributes
variability in minutes, hours and

days, generators contribute to power system frequency regulation by
controlling primary energy supply
rates in seconds to minutes. Not always able to self-supply frequency
control, increased wind penetration
may require new markets for frequency support services.
Demand-side Bidding: Demandside bidding has been incorporated
into energy markets on a limited basismost recently through capacity markets. As automated demand
control equipment and hybrid electric vehicles offer energy storage
and demand response at the retail
level, wholesale electricity market
rules may be revisited. Demandside bidding would allow demand
resources, in combination with
generators, to set real-time prices,
thereby creating a market that accounts for and possibly changes the
price elasticity of demand.
Renewable energy credits (RECs)

formalized a separately defined
property
right
associated
with
renewable
resources.
Generation
information certificates allowed for
further differentiation. Markets for
these environmental commodities
establish verifiable claims for green
Economists design markets to send
power retailers and compliance with
renewable portfolio standards. RECs proper and transparent price signals to
are being further defined into solar decrease the transaction costs of matchrenewable energy credits (SRECs) to ing supply to demand. As competitive
generate separate revenue streams for wholesale electricity markets evolved,
future solar installations, and there has market forces have been at work. Propbeen discussion about alternative energy erty rights and new markets for transactiStockphoto.com/McIninch
portfolio standards that include energy ing those rights have developed. A world
efficiency in the separately traded form with energy efficiency, electricity storage
and renewable resources will need new
of negawatts.
markets to further define the sources
and value of otherwise indistinguishable
And More to Come ...
With advanced metering, smart grid electrons.
How should you respond? Be
penetration and energy storage solutions,
the following markets already are in prepared to participate. Reactive market
participants respond to opportunities
discussion:
Frequency Markets: Higher wind that new and transitioning markets
penetration creates operational generate. Proactive firms increase profits
implications for the transmission by directing the formation of these new
system. Whereas traditional market markets and then participating in those
ancillary services focus on system markets with vantage.
Sep|Oct|2009
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COLUMN
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TTaking
aking It Into Account
Misguided Market Design

or Market Manipulation?
by Dan Watkiss, Bracewell & Guiliani
The Federal Energy Regulatory
Commission (FERC) in a July order
endorsed its enforcement staffs report
that rejected allegations of the market
monitor for the New York Independent
System Operator Inc. (NYISO) that
certain circuitous wholesale electric
A u t h o r energy trades over eight paths in the
Dan Watkiss is a partner Northeast and Mid-Atlantic beginning in
with Bracewell & 2008 amounted to market manipulation
Giuliani in Washington, or violations of the traders wholesale
D.C., representing power tariffs.
The NYISO monitor and others
power companies,
exploration and produc- had complained that the trades at issue
tion and midmarket congested the power grid around Lake
companies, natural Erie (attributable in part to a physical
gas pipelines, power phenomenon known as loop flow)
and liquefied natural resulting in higher costs to power
gas project developers consumers. FERCs order and the staff
and lenders, as well as report addressing these Lake Erie trades
government agencies are noteworthy in their articulation
and regulators. You of what distinguishes unlawful
may reach him at Dan. manipulation from transactions that
Watkiss@bgllp.com. respond rationally to the price signals
from badly designed energy markets. As
energy markets expand geographically
and the volume of physical and financial
trading in energy products grows, this
distinction is likely to prove increasingly
important to the efficient design of
market structures and rules.
Laws and regulations proscribing
manipulation of energy markets have
proliferated in recent years. Most
recently, the Federal Trade Commission
(FTC) announced it will put in place
in November new rules prohibiting
manipulation in wholesale petroleum
markets. The FTCs petroleum
regulations, implemented pursuant to
the Energy Independence and Security
Act of 2007, follow and largely track
FERCs earlier adoption of rules
forbidding manipulation of natural gas
and wholesale electric power markets.
All three sets of anti-manipulation
rules are modeled on the Securities and
Exchange Commissions Rule 10b-5

that prohibits any act or omission that
results in fraud or deceit in connection
with the purchase of a security. The
specific anti-manipulation rule in the
Lake Erie order and report, similar to
Rule 10b-5, makes it a violation of the
Federal Power Act to use or employ any
device, scheme or artifice to defraud,
make an untrue statement of material
fact or omit a material fact or engage
in any act or practice that operates as a
fraud or deceit.
Contrary to the NYISO monitor, that

pricing incentive simply exposed rather
than created a market inefficiency.
In analyzing the circuitously
scheduled transactions, FERC and its
staff detailed the profits and losses
traders incurred. That the circuitous
transactions more often than not were
profitable for sellers left the regulator
with no reason to doubt that their
motive was simply one of responding to
price signals in the market. And because
FERC found no evidence that sellers
FERC determined that the circuitously routed Lake Erie trades caused the harms
that the NYISO monitor allegedthey contributed to loop flows and power
grid congestions, increasing the cost of power to New York consumersand
for that reason FERC authorized the NYISO to prohibit scheduling of wholesale
power trades over the eight identified circuitous paths.
FERC and its staff determined
that the circuitously routed Lake Erie
trades caused the harms that the NYISO
monitor allegedthey contributed to
loop flows and power grid congestion,
increasing the cost of power to New
York consumersand for that reason
FERC authorized the NYISO to
prohibit prospectively the scheduling of
wholesale power trades over the eight
identified circuitous paths. Nevertheless,
the agency concluded that these trades
were not the product of any fraudulent
device, scheme or artifice. Rather,
they were induced by what the agency
characterized as a pricing methodology
mismatch among operators of the
New York, Ontario, Midwest and MidAtlantic grid operators. During periods
of grid congestion, that mismatch made
it more profitable for a seller to schedule
through the four regional markets rather
than more directly from source to sink.
had attempted to affect price levels

artificially or conceal the circuitousness
of their scheduleseach leg of which
was correctly taggedthere was no
basis for finding market manipulation or
for imposing price mitigations available
under the NYISO tariff.
FERCs message in the Lake Erie
order and report is clear: If market
structures or rules make profitable and
reward power transactions that are arguably inefficient, that inefficiency will not
be mistaken as evidence of market manipulation. Rather, it will be received as
proof that the market structures or rules
are disjointed and in need of reform.
That message shows a more mature, deliberate approach to regulating
complex energy markets than characterized earlier periods when any market perturbation was assumed to be the
product of manipulation.
Sep|Oct|2009
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Industry Report
Showing Signs
of Weaknesss
The 2008 Utility Financial Rankings
by Teresa Hansen, editor in chief
The utility financial rankings were described as quiet in 2005, very good in 2006 and remarkable in 2007. From these
descriptions, its clear that utilities financial performance trended upward for several years in a row. The 2008 financial
rankings, however, show a different trend. Jean Reaves Rollins, who has provided the financial data for this report for the past
few years, said the 2008 rankings indicate the industry is showing signs of weakness.
When interviewed for this report last year, the country was already experiencing the recessions impact, and Rollins
predicted that 2008 would see a turn down. She did not think a year ago, however, that it would hit utilities as hard as it did.
The financial services meltdown was just becoming apparent (last September), and its impact on the general economy
took most by surprise, Rollins said.
As in years past, Rollins, head of The C Three Groupa senior management and research advisory firm to the energy
industryprovided data and commentary for this report, which provides Electric Light & Power readers with a glimpse at
utilities financial performance and health. For readers who wish to compare the market results year-after-year, previous
reports are available in archived September-October issues at http://elp.com.
Sep|Oct|2009
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Industry Report
Table 1: Total Revenue Rankings
Company
Total Revenues
2005
Total Revenues
2006
Total Revenues
2007
Total Revenues
2008
Constellation Energy
Exelon
Southern Co.
FPL Group Inc.
Dominion Resources
AES Corp.
PG&E
American Electric Power
Edison International
Integrys Energy
FirstEnergy
Consolidated Edison
Public Service
Enterprise Group Inc.
Duke Energy
Entergy Corp.
Reliant Resources
Williams Companies
Centerpoint Energy
Xcel Energy Inc.
Sempra Energy
PEPCO Holdings
DTE Energy Co.
Progress Energy
NiSource
PPL Corp.
Ameren Corp.
Atmos
NRG
CMS Energy
UGI
Northeast
Utilities System
El Paso Corp.
SCANA Corp.
MDU Resources
Wisconsin Energy Corp.
OGE Energy Corp.
New Jersey Resources
Nicor Inc.
Alliant
Dynegy
Sierra Pacific
Questar
Allegheny Energy
TECO Energy
Pinnacle West
Puget Energy
NStar
Hawaiian Electric
Industries Inc.
Mirant
Southern Union
AGL Resources Inc.
WGL Holdings
Vectren
$16,968,300,000
$15,357,000,000
$13,554,000,000
$11,846,000,000
$17,809,000,000
$10,247,000,000
$11,703,000,000
$12,111,000,000
$11,852,000,000
$6,962,700,000
$11,989,000,000
$11,343,000,000
$19,284,900,000
$15,655,000,000
$14,356,000,000
$15,710,000,000
$16,297,000,000
$11,576,000,000
$12,539,000,000
$12,622,000,000
$12,622,000,000
$6,890,700,000
$11,501,000,000
$11,962,000,000
$21,193,200,000
$18,916,000,000
$15,353,000,000
$15,263,000,000
$15,674,000,000
$13,588,000,000
$13,237,000,000
$13,380,000,000
$13,113,000,000
$10,292,400,000
$12,802,000,000
$13,120,000,000
$19,818,300,000
$18,859,000,000
$17,127,000,000
$16,410,000,000
$16,290,000,000
$16,070,000,000
$14,628,000,000
$14,440,000,000
$14,112,000,000
$14,047,800,000
$13,627,000,000
$13,583,000,000
-6.49%
-0.30%
11.55%
7.51%
3.93%
18.27%
10.51%
7.92%
7.62%
36.49%
6.44%
3.53%
16.80%
22.80%
26.36%
38.53%
-8.53%
56.83%
24.99%
19.23%
19.07%
101.76%
13.66%
19.75%
$11,849,000,000
$6,906,000,000
$10,106,247,000
$9,711,995,000
$9,781,000,000
$9,722,000,000
$9,625,477,000
$11,512,000,000
$8,065,500,000
$8,094,000,000
$7,948,000,000
$7,895,800,000
$5,539,000,000
$6,780,000,000
$4,961,873,000
$2,400,000,000
$5,879,000,000
$4,888,700,000
$11,762,000,000
$10,607,000,000
$10,932,158,000
$10,877,385,000
$9,376,000,000
$9,319,000,000
$9,840,304,000
$11,761,000,000
$8,362,900,000
$8,159,000,000
$8,724,000,000
$7,490,000,000
$6,131,000,000
$6,880,000,000
$6,152,363,000
$5,585,000,000
$6,126,000,000
$5,221,000,000
$12,853,000,000
$12,720,000,000
$11,484,398,000
$11,208,724,000
$10,558,000,000
$9,623,000,000
$10,034,170,000
$11,438,000,000
$9,366,400,000
$8,506,000,000
$9,153,000,000
$7,939,800,000
$6,498,000,000
$7,546,000,000
$5,898,431,000
$5,989,000,000
$6,464,000,000
$5,476,900,000
$13,322,000,000
$13,207,000,000
$13,093,756,000
$12,553,210,000
$12,352,000,000
$11,322,000,000
$11,203,156,000
$10,758,000,000
$10,700,000,000
$9,329,000,000
$9,167,000,000
$8,874,200,000
$8,044,000,000
$7,839,000,000
$7,221,305,000
$6,885,000,000
$6,821,000,000
$6,648,200,000
3.65%
3.83%
14.01%
11.99%
16.99%
17.66%
11.65%
-5.95%
14.24%
9.68%
0.15%
11.77%
23.79%
3.88%
22.43%
14.96%
5.52%
21.39%
12.43%
91.24%
29.56%
29.25%
26.29%
16.46%
16.39%
-6.55%
32.66%
15.26%
15.34%
12.39%
45.22%
15.62%
45.54%
186.88%
16.02%
35.99%
$7,346,220,000
$3,359,000,000
$4,777,000,000
$3,403,923,000
$3,815,500,000
$5,911,500,000
$3,184,582,000
$3,357,800,000
$3,279,600,000
$2,017,000,000
$3,030,219,000
$2,724,888,000
$3,037,887,000
$3,010,000,000
$2,987,955,000
$2,578,008,000
$3,243,120,000
$6,641,716,000
$4,281,000,000
$4,563,000,000
$4,004,539,000
$3,996,400,000
$4,005,600,000
$3,271,229,000
$2,960,000,000
$3,359,400,000
$1,770,000,000
$3,355,950,000
$2,835,600,000
$3,121,489,000
$3,448,100,000
$3,401,748,000
$2,907,063,000
$3,577,702,000
$5,822,226,000
$4,648,000,000
$4,621,000,000
$4,247,896,000
$4,237,800,000
$3,797,600,000
$3,021,765,000
$3,176,300,000
$3,437,000,000
$3,103,000,000
$3,600,960,000
$2,726,600,000
$3,307,020,000
$3,536,100,000
$3,523,620,000
$3,220,147,000
$3,261,784,000
$5,800,095,000
$5,363,000,000
$5,319,000,000
$5,003,278,000
$4,431,000,000
$4,070,700,000
$3,816,210,000
$3,776,600,000
$3,681,700,000
$3,549,000,000
$3,528,113,000
$3,465,100,000
$3,385,900,000
$3,375,300,000
$3,367,076,000
$3,357,773,000
$3,345,387,000
-0.38%
15.38%
15.10%
17.78%
4.56%
7.19%
26.29%
18.90%
7.12%
14.37%
-2.02%
27.09%
2.39%
-4.55%
-4.44%
4.27%
2.56%
-21.05%
59.66%
11.35%
46.99%
16.13%
-31.14%
19.83%
12.47%
12.26%
75.95%
16.43%
27.16%
11.46%
12.14%
12.69%
30.25%
3.15%
$2,215,564,000
$2,620,000,000
$1,266,882,000
$2,718,000,000
$2,163,343,000
$2,028,000,000
$2,460,904,000
$3,087,000,000
$2,340,144,000
$2,621,000,000
$2,637,883,000
$2,041,600,000
$2,536,418,000
$2,019,000,000
$2,616,665,000
$2,494,000,000
$2,646,008,000
$2,281,900,000
$3,218,920,000
$3,188,000,000
$3,070,154,000
$2,800,000,000
$2,628,194,000
$2,484,700,000
26.91%
57.90%
17.33%
12.27%
-0.67%
8.89%
45.29%
21.68%
142.34%
3.02%
21.49%
22.52%
Sep|Oct|2009
2007-2008 2005-2008
Growth Rate Growth Rate
Company
Total Revenues
2005
Total Revenues
2006
Total Revenues
2007
Total Revenues
2008
National Fuel Gas Co.

Laclede
Southwest Gas
Piedmont Natural Gas
PNM Resources
Westar
Portland General Electric
Avista Corp.
Great Plains Energy
DPL Inc.
Equitable Resources Inc.
Energen
Unisource Energy
CH Energy Group
Otter Tail Corp.
Northwest Natural Gas
CLECO
El Paso Electric
Northwestern Corp.
Black Hills
South Jersey Industries
IdaCorp
UIL Holdings
Allete (Minnesota Power)
MGE Energy
Empire District Electric Co.
Central Vermont
Chesapeake Utilities
Florida Public Utilities
Delta Natural Gas
RGC Resources
Energy West
$1,860,774,000
$1,597,032,000
$1,714,283,000
$1,761,091,000
$1,566,110,000
$1,583,278,000
$1,446,000,000
$1,359,607,000
$2,604,882,000
$1,284,900,000
$1,253,724,000
$1,128,394,000
$1,224,056,000
$972,506,000
$981,869,000
$910,486,000
$920,154,000
$803,913,000
$1,165,750,000
$613,541,000
$906,016,000
$842,864,000
$812,223,000
$737,400,000
$513,370,000
$362,720,000
$311,359,000
$229,629,736
$130,123,000
$84,181,233
$121,647,787
$67,888,984
$2,239,675,000
$1,997,551,000
$2,024,758,000
$1,924,628,000
$1,963,360,000
$1,605,743,000
$1,520,000,000
$1,506,311,000
$2,675,349,000
$1,393,500,000
$1,267,910,000
$1,393,986,000
$1,308,141,000
$993,433,000
$1,104,954,000
$1,013,172,000
$1,000,675,000
$816,455,000
$1,132,653,000
$656,882,000
$931,428,000
$926,291,000
$846,721,000
$767,100,000
$507,546,000
$412,171,000
$325,738,000
$231,200,591
$134,393,000
$117,247,144
$107,797,750
$74,695,561
$2,039,566,000
$2,021,594,000
$2,152,088,000
$1,711,292,000
$1,914,029,000
$1,726,834,000
$1,743,000,000
$1,417,757,000
$3,267,100,000
$1,515,700,000
$1,381,406,000
$1,435,060,000
$1,381,373,000
$1,196,757,000
$1,238,887,000
$1,033,193,000
$1,025,419,000
$877,427,000
$1,200,060,000
$695,914,000
$956,371,000
$879,394,000
$981,999,000
$841,700,000
$537,594,000
$490,160,000
$329,107,000
$258,286,000
$136,542,000
$98,168,000
$89,901,000
$59,373,000
$2,400,361,000
$2,208,973,000
$2,144,743,000
$2,089,108,000
$1,959,522,000
$1,838,996,000
$1,745,000,000
$1,676,763,000
$1,670,100,000
$1,601,600,000
$1,576,488,000
$1,568,910,000
$1,397,511,000
$1,332,851,000
$1,311,197,000
$1,260,793,000
$1,080,198,000
$1,038,930,000
$1,037,855,000
$1,005,790,000
$961,977,000
$960,414,000
$948,720,000
$801,000,000
$595,993,000
$518,163,000
$342,162,000
$291,443,477
$168,548,000
$112,657,117
$94,636,826
$76,833,248
Total
$399,355,355,740 $425,932,242,046 $453,204,283,000 $492,195,363,668

6.65%
6.40%
8.60%
2007-2008 2005-2008
Growth Rate Growth Rate
17.69%
9.27%
-0.34%
22.08%
2.38%
6.50%
0.11%
18.27%
-48.88%
5.67%
14.12%
9.33%
1.17%
11.37%
5.84%
22.03%
5.34%
18.41%
-13.52%
44.53%
0.59%
9.21%
-3.39%
-4.84%
10.86%
5.71%
3.97%
12.84%
23.44%
14.76%
5.27%
29.41%
29.00%
38.32%
25.11%
18.63%
25.12%
16.15%
20.68%
23.33%
-35.89%
24.65%
25.74%
39.04%
14.17%
37.05%
33.54%
38.47%
17.39%
29.23%
-10.97%
63.93%
6.18%
13.95%
16.81%
8.62%
16.09%
42.85%
9.89%
26.92%
29.53%
33.83%
-22.20%
13.17%
8.60%
8.60%
23.25%
Source: The C Three Group
A number of utilities saw their revenues drop, in

many cases, reflecting rapidly decreasing unit sales,
especially in the last half of 2008, Rollins said.
ELECTRICLIGHT&POWER | 21
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Industry Report
Table 2: Capital Expenditures
Company
CapEx 2005
CapEx 2006
CapEx 2007
CapEx 2008
FPL Group Inc.

Duke Energy
Southern Co.
PG&E
Dominion Resources
Williams Companies
Exelon
FirstEnergy
El Paso Corp.
AES Corp.
Progress Energy
Questar
Consolidated Edison
Sempra Energy
Entergy Corp.
Xcel Energy Inc.
Ameren Corporation
Public Service
Sierra Pacific
PPL Corp.
DTE Energy Co.
Northeast
Utilities System
OGE Energy Corp.
Great Plains Energy
Centerpoint Energy
Allegheny Energy
NiSource
Westar
Pinnacle West
SCANA Corp.
NRG
Alliant
Puget Energy
CMS Energy
PEPCO Holdings
MDU Resources
Mirant
Dynegy
TECO Energy
Southern Union
Integrys Energy
Atmos
Energen
NStar
Vectren
AGL Resources Inc.
$2,477,000,000
$2,327,000,000
$2,370,000,000
$2,404,000,000
$1,804,000,000
$2,763,000,000
$1,299,000,000
$2,165,000,000
$1,208,000,000
$1,868,000,000
$1,474,000,000
$826,000,000
$1,439,000,000
$712,700,000
$1,617,000,000
$1,377,000,000
$1,704,436,000
$1,304,468,000
$760,000,000
$935,000,000
$3,739,000,000
$3,381,000,000
$2,994,000,000
$3,528,000,000
$2,402,000,000
$3,659,000,000
$2,509,200,000
$2,418,000,000
$1,315,000,000
$2,536,000,000
$2,164,000,000
$1,460,000,000
$1,686,000,000
$909,800,000
$1,847,000,000
$1,907,000,000
$1,795,472,000
$1,626,000,000
$962,900,000
$992,000,000
$4,319,000,000
$3,125,000,000
$3,545,000,000
$3,556,000,000
$2,769,000,000
$3,621,000,000
$2,816,000,000
$2,674,000,000
$1,633,000,000
$2,826,000,000
$2,495,000,000
$2,425,000,000
$2,201,000,000
$1,383,500,000
$1,928,000,000
$2,011,000,000
$2,098,102,000
$2,095,721,000
$1,295,700,000
$1,381,000,000
$4,550,000,000
$4,386,000,000
$3,961,000,000
$3,800,000,000
$3,628,000,000
$3,554,000,000
$3,475,000,000
$3,117,000,000
$2,888,000,000
$2,824,000,000
$2,757,000,000
$2,735,000,000
$2,555,000,000
$2,437,200,000
$2,322,000,000
$2,295,000,000
$2,212,255,000
$2,112,135,000
$1,934,100,000
$1,896,000,000
5.35%
40.35%
11.73%
6.86%
31.02%
-1.85%
23.40%
16.57%
76.85%
-0.07%
10.50%
12.78%
16.08%
76.16%
20.44%
14.12%
5.44%
0.78%
49.27%
37.29%
83.69%
88.48%
67.13%
58.07%
101.11%
28.63%
167.51%
43.97%
139.07%
51.18%
87.04%
231.11%
77.55%
241.97%
43.60%
66.67%
29.79%
61.92%
154.49%
102.78%
$1,053,000,000
$686,394,000
$811,000,000
$1,065,000,000
$275,454,000
$1,015,000,000
$986,019,000
$1,394,000,000
$1,403,000,000
$403,094,000
$1,348,000,000
$1,197,326,000
$1,685,000,000
$1,299,000,000
$776,667,000
$1,771,000,000
$1,535,503,000
$1,418,000,000
$1,373,000,000
$1,343,996,000
31.38%
28.24%
-15.85%
5.70%
73.05%
68.19%
123.71%
74.85%
28.92%
387.92%
$775,355,000
$297,200,000
$745,100,000
$328,900,000
$693,000,000
$306,461,000
$590,400,000
$212,814,000
$633,532,000
$385,000,000
$106,000,000
$538,100,000
$583,594,000
$593,000,000
$467,100,000
$377,856,000
$101,000,000
$195,000,000
$295,300,000
$279,721,000
$401,900,000
$333,183,000
$230,715,000
$387,265,000
$219,530,000
$231,600,000
$255,000,000
$267,000,000
$872,181,000
$486,600,000
$928,700,000
$481,600,000
$1,007,000,000
$447,325,000
$637,400,000
$344,860,000
$737,779,000
$522,000,000
$221,000,000
$399,000,000
$749,516,000
$670,000,000
$474,600,000
$479,872,000
$133,000,000
$155,000,000
$455,700,000
$347,896,000
$337,500,000
$425,324,000
$302,177,000
$426,146,000
$294,159,000
$281,400,000
$371,000,000
$253,000,000
$1,114,824,000
$557,700,000
$1,211,500,000
$516,000,000
$1,114,000,000
$848,397,000
$788,300,000
$748,156,000
$918,581,000
$725,000,000
$481,000,000
$542,000,000
$737,258,000
$1,263,000,000
$623,400,000
$558,283,000
$560,000,000
$379,000,000
$494,400,000
$616,883,000
$376,900,000
$392,435,000
$373,857,000
$360,130,000
$276,728,000
$334,500,000
$455,000,000
$259,000,000
$1,255,407,000
$1,184,500,000
$1,137,100,000
$1,023,700,000
$1,020,000,000
$994,100,000
$969,900,000
$937,242,000
$935,577,000
$904,000,000
$899,000,000
$879,000,000
$846,001,000
$792,000,000
$781,000,000
$746,478,000
$731,000,000
$611,000,000
$589,500,000
$588,611,000
$532,800,000
$472,273,000
$460,237,000
$422,224,000
$397,734,000
$391,000,000
$383,000,000
$372,000,000
12.61%
112.39%
-6.14%
98.39%
-8.44%
17.17%
23.04%
25.27%
1.85%
24.69%
86.90%
62.18%
14.75%
-37.29%
25.28%
33.71%
30.54%
61.21%
19.24%
-4.58%
41.36%
20.34%
23.11%
17.24%
43.73%
16.89%
-15.82%
43.63%
61.91%
298.55%
52.61%
211.25%
47.19%
224.38%
64.28%
340.40%
47.68%
134.81%
748.11%
63.35%
44.96%
33.56%
67.20%
97.56%
623.76%
213.33%
99.63%
110.43%
32.57%
41.75%
99.48%
9.03%
81.18%
68.83%
50.20%
39.33%
Change from Change from

2007-2008 2005-2008
Company
CapEx 2005
CapEx 2006
CapEx 2007
CapEx 2008
Unisource Energy
PNM Resources
CLECO
Black Hills
Reliant Resources
Southwest Gas
Hawaiian Electric
Industries Inc.
Otter Tail Corp.
Nicor Inc.
DPL Inc.
IdaCorp
UGI
El Paso Electric
Avista Corp.
UIL Holdings
WGL Holdings
MGE Energy
Northwestern Corp.
CH Energy Group
Laclede
Central Vermont
RGC Resources
Delta Natural Gas
Energy West
$203,428,000
$221,814,000
$159,393,000
$136,279,000
$82,296,000
$58,600,000
$294,369,000
$238,261,000
$321,118,000
$236,495,000
$308,450,000
$96,793,000
$102,300,000
$345,325,000
$245,366,000
$400,903,000
$510,192,000
$261,371,000
$118,856,000
$210,200,000
$340,875,000
$349,289,000
$344,951,000
$335,757,000
$328,922,000
$310,462,000
$301,100,000
$300,217,000
42.35%
-13.96%
-34.19%
25.84%
161.21%
43.24%
-11.93%
71.70%
55.51%
110.65%
141.36%
277.25%
413.82%
1.99%
$223,675,000
$59,969,000
$201,900,000
$169,600,000
$193,314,000
$158,400,000
$104,151,000
$219,358,000
$60,303,000
$68,638,000
$191,407,000
$112,768,000
$96,000,000
$85,771,000
$80,877,000
$63,879,000
$52,801,000
$92,906,000
$60,203,000
$17,558,000
$33,008,235
$12,441,000
$7,427,000
$5,338,356
$2,187,614
$210,529,000
$69,448,000
$187,400,000
$335,600,000
$225,048,000
$191,700,000
$120,784,000
$165,085,000
$76,774,000
$223,400,000
$204,116,000
$159,757,000
$97,000,000
$92,575,000
$101,046,000
$75,070,000
$66,293,000
$73,677,000
$63,416,000
$19,504,000
$48,845,828
$13,116,000
$7,815,000
$7,781,396
$1,865,594
$218,297,000
$161,985,000
$173,200,000
$346,200,000
$287,751,000
$223,100,000
$196,988,000
$209,091,000
$248,202,000
$183,393,000
$135,231,000
$164,531,000
$118,100,000
$136,258,000
$258,341,000
$84,601,000
$63,524,000
$55,539,000
$58,870,000
$23,663,000
$31,277,000
$16,740,000
$6,004,000
$8,083,000
$2,407,000
$282,051,000
$265,888,000
$249,900,000
$243,600,000
$243,544,000
$232,100,000
$224,478,000
$222,698,000
$215,728,000
$213,280,000
$181,001,000
$134,961,000
$124,563,000
$105,777,000
$103,998,000
$84,198,000
$73,446,000
$61,972,000
$56,621,000
$36,835,000
$30,755,845
$11,227,000
$6,539,369
$5,563,667
$3,869,832
29.21%
64.14%
44.28%
-29.64%
-15.36%
4.03%
13.96%
6.51%
-13.08%
16.30%
33.85%
-17.97%
5.47%
-22.37%
-59.74%
-0.48%
15.62%
11.58%
-3.82%
55.66%
-1.67%
-32.93%
8.92%
-31.17%
60.77%
26.10%
343.38%
23.77%
43.63%
25.98%
46.53%
115.53%
1.52%
257.74%
210.73%
-5.44%
19.68%
29.75%
23.32%
28.59%
31.81%
39.10%
-33.30%
-5.95%
109.79%
-6.82%
-9.76%
-11.95%
4.22%
76.90%
$93,821,865,713
17.82%
17.82%
17.82%
83.65%
Total
$51,086,137,205 $66,760,607,818 $79,629,387,000

30.68%
19.28%

2007-2008 2005-2008
2008 saw a decrease in capital expenditure growth,

but not an actual decrease in capital spending from
2007 to 2008. Rollins expects this trend to continue
in 2009.
Sep|Oct|2009
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Industry Report
Table 3: Income From Continuing Operations
Company
Income From
Income From
Income From
Income From
Continuing
Continuing
Continuing
Continuing
Operations 2005 Operations 2006 Operations 2007 Operations 2008 2007-2008 2005-2008
Company
Income From
Income From
Income From
Income From
Continuing
Continuing
Continuing
Continuing
Operations 2005 Operations 2006 Operations 2007 Operations 2008 2007-2008 2005-2008
Exelon
Dominion Resources
Southern Co.
FPL Group Inc.
Williams Companies
FirstEnergy
Duke Energy
Entergy Corp.
AES Corp.
Mirant
PG&E
Sempra Energy
NRG
Public Service
Consolidated Edison
PPL Corp.
El Paso Corp.
$965,000,000
$1,033,000,000
$1,591,000,000
$901,000,000
$473,000,000
$1,029,000,000
$891,000,000
$893,000,000
$943,125,000
$365,000,000
$1,137,000,000
($1,385,000,000)
$904,000,000
$913,000,000
$68,000,000
$1,592,000,000
$1,530,000,000
$1,573,000,000
$1,281,000,000
$347,000,000
$1,002,000,000
$1,254,000,000
$1,080,000,000
$1,133,098,000
$176,000,000
$1,181,000,000
$1,752,000,000
$991,000,000
$1,091,000,000
$543,000,000
$2,736,000,000
$2,705,000,000
$1,734,000,000
$1,312,000,000
$847,000,000
$1,144,000,000
$1,309,000,000
$1,522,000,000
$1,134,849,000
$495,000,000
$1,098,000,000
$433,000,000
$1,006,000,000
$1,125,000,000
$569,000,000
$2,717,000,000
$1,836,000,000
$1,742,000,000
$1,639,000,000
$1,418,000,000
$1,368,000,000
$1,342,000,000
$1,279,000,000
$1,220,566,000
$1,216,000,000
$1,215,000,000
$1,215,000,000
$1,184,000,000
$1,113,000,000
$1,016,000,000
-0.69%
-32.13%
0.46%
24.92%
67.41%
19.58%
2.52%
-15.97%
7.55%
145.66%
10.66%
180.60%
17.69%
-1.07%
78.56%
181.55%
77.73%
9.49%
81.91%
199.79%
32.94%
50.62%
43.23%
29.42%
233.15%
6.86%
-187.73%
30.97%
21.91%
1394.12%
$136,300,000
$106,072,000
$18,535,000
$101,270,000
$180,779,000
$63,661,000
$128,300,000
$94,694,000
$221,908,000
$97,189,000
$72,856,000
$100,075,000
$135,200,000
$107,900,000
$65,281,000
$104,387,000
$151,331,000
$82,272,000
$119,500,000
$116,523,000
$113,910,000
$110,007,000
$102,141,000
$98,414,000
-11.61%
7.99%
74.49%
5.38%
-32.50%
19.62%
-12.33%
9.85%
514.57%
8.63%
-43.50%
54.59%
$837,000,000
$745,000,000
$678,000,000
$679,000,000
$740,000,000
$865,000,000
$1,319,000,000
$925,000,000
$1,288,000,000
$983,000,000
$922,000,000
$922,000,000
-25.47%
-0.32%
-28.42%
17.44%
23.76%
35.99%
($506,000,000)
$523,000,000
$325,681,000
$508,731,000
$628,000,000
$537,000,000
$225,000,000
$63,065,000
$303,600,000
$320,000,000
$173,012,000
$81,000,000
($94,000,000)
$371,200,000
$153,096,000
$265,291,000
$56,400,000
$189,488,000
$531,000,000
$551,000,000
$444,100,000
$567,513,000
$547,000,000
$433,000,000
$432,000,000
$319,321,000
$312,500,000
$310,000,000
$273,570,000
($308,000,000)
($90,000,000)
$248,300,000
$217,083,000
$307,778,000
$338,300,000
$138,091,000
$436,000,000
$693,000,000
$507,400,000
$573,107,000
$618,000,000
$971,000,000
$399,000,000
$412,214,000
$336,500,000
$320,000,000
$309,233,000
$324,000,000
($227,000,000)
$334,200,000
$228,711,000
$322,786,000
$424,700,000
$337,455,000
$823,000,000
$773,000,000
$683,800,000
$645,720,000
$605,000,000
$546,000,000
$447,000,000
$395,400,000
$358,600,000
$346,000,000
$321,915,000
$319,000,000
$300,000,000
$300,000,000
$295,151,000
$293,673,000
$280,000,000
$268,728,000
88.76%
11.54%
34.77%
12.67%
-2.10%
-43.77%
12.03%
-4.08%
6.57%
8.13%
4.10%
-1.54%
-232.16%
-10.23%
29.05%
-9.02%
-34.07%
-20.37%
-262.65%
47.80%
109.96%
26.93%
-3.66%
1.68%
98.67%
526.97%
18.12%
8.13%
86.07%
293.83%
-419.15%
-19.18%
92.79%
10.70%
396.45%
41.82%
Nicor Inc.
WGL Holdings
CLECO
IdaCorp
Hawaiian Electric
Industries, Inc.
NiSource
El Paso Electric
Avista Corp.
Northwestern Corp.
Southwest Gas
Laclede
MGE Energy
UIL Holdings
Otter Tail Corp.
CH Energy Group
Central Vermont
Unisource Energy
Delta Natural Gas
RGC Resources
Energy West
Black Hills
$126,689,000
$64,000,000
$17,600,000
$306,800,000
$35,522,000
$39,770,000
$44,988,000
$61,547,000
$58,149,000
$43,823,000
$40,070,000
$32,091,000
$33,476,000
$24,944,000
$53,902,000
$44,291,000
$5,978,000
$52,253,000
$10,467,614
$4,998,619
$3,387,933
$4,219,000
$927,713
$32,792,000
$108,001,000
$71,000,000
$77,300,000
$281,800,000
$67,450,000
$72,250,000
$72,941,000
$37,900,000
$63,415,000
$83,860,000
$48,989,000
$42,423,000
$58,716,000
$40,029,000
$51,112,000
$43,084,000
$17,984,000
$69,243,000
$10,506,525
$5,024,635
$3,511,531
$4,140,000
$1,911,249
$74,046,000
$84,779,000
$145,000,000
$87,600,000
$321,400,000
$74,753,000
$62,659,000
$38,475,000
$53,191,000
$74,497,000
$83,246,000
$49,771,000
$48,825,000
$46,693,000
$33,181,000
$53,225,000
$42,636,000
$15,436,000
$58,373,000
$13,198,000
$5,298,000
$3,806,000
$3,272,000
$2,257,480
$100,124,000
$90,278,000
$87,000,000
$82,500,000
$79,000,000
$77,621,000
$77,178,000
$73,620,000
$69,525,000
$67,601,000
$60,973,000
$57,526,000
$52,768,000
$48,385,000
$39,722,000
$35,125,000
$35,081,000
$16,017,000
$14,021,000
$13,607,259
$6,829,868
$4,257,824
$3,457,000
$3,311,375
6.49%
-40.00%
-5.82%
-75.42%
3.84%
23.17%
91.35%
30.71%
-9.26%
-26.76%
15.58%
8.08%
3.62%
19.71%
-34.01%
-17.72%
3.76%
-75.98%
3.10%
28.91%
11.87%
5.65%
46.68%
-28.74%
35.94%
368.75%
-74.25%
118.52%
94.06%
63.64%
12.96%
16.25%
39.13%
43.56%
64.43%
44.54%
59.24%
-34.84%
-20.79%
167.93%
-73.17%
29.99%
36.64%
25.68%
-18.06%
256.94%
($52,167,000)
-152.10%
-259.08%
PNM Resources
$51,113,000
$107,960,000
$59,358,000
Reliant Resources
($330,556,000)
$535,900,000
($327,812,000)
$748,600,000
$365,107,000
$822,400,000
($305,272,000)
($748,112,000)
($1,314,400,000)
-614.29%
-304.90%
-259.82%
-697.25%
126.32%
-345.27%
Total
$21,412,590,879 $30,088,559,940 $36,991,565,480

40.52%
22.94%
$34,819,424,326
-5.87%
-5.87%
-5.87%
62.61%
$132,936,000
$216,025,000
$139,600,000
$206,774,000
$262,100,000
$212,000,000
$176,200,000
$317,143,000
$277,451,000
$147,737,000
$165,309,000
$244,400,000
$167,224,000
$108,800,000
$155,800,000
$126,000,000
$245,896,000
$257,483,000
$221,800,000
$221,515,000
$244,200,000
$211,000,000
$204,300,000
$298,780,000
$197,295,000
$168,492,000
$168,354,000
$398,900,000
$184,464,000
$143,100,000
$251,300,000
$157,600,000
$260,828,000
$255,604,000
$244,500,000
$237,547,000
$231,400,000
$217,000,000
$215,500,000
$213,557,000
$208,887,000
$180,331,000
$178,140,000
$162,400,000
$154,929,000
$129,000,000
$124,800,000
$119,500,000
6.07%
-0.73%
10.23%
7.24%
-5.24%
2.84%
5.48%
-28.52%
5.88%
7.03%
5.81%
-59.29%
-16.01%
-9.85%
-50.34%
-24.18%
-201.53%
-1.15%
40.19%
21.11%
43.55%
12.44%
14.93%
-4.30%
154.01%
32.81%
32.08%
-23.03%
5.91%
-5.70%
-20.71%
-25.64%
Progress Energy
Questar
Xcel Energy Inc.
Ameren Corp.
DTE Energy Co.
Centerpoint Energy
Allegheny Energy
SCANA Corp.
Energen
Dynegy
CMS Energy
PEPCO Holdings
Southern Union
MDU Resources
Alliant
Northeast
Utilities System
($256,903,000)
Equitable Resources Inc. $258,574,000
DPL Inc.
$174,400,000
NStar
$196,135,000
OGE Energy Corp.
$161,200,000
AGL Resources Inc.
$193,000,000
UGI
$187,500,000
Pinnacle West
$223,163,000
Sierra Pacific
$82,237,000
Atmos
$135,785,000
Westar
$134,868,000
TECO Energy
$211,000,000
Puget Energy
$146,283,000
Vectren
$136,800,000
Integrys Energy
$157,400,000
Great Plains Energy
$160,700,000
While utilities have focused on adjusting to and operating in the economic recession, many have an even
bigger issue to address pending environmental
legislation.
Sep|Oct|2009
BEMaGS
F
BEMaGS
Industry Report
Overall Revenue Up, But Not for Everyone
While overall revenue was up almost 9 percent, income from
continuing operations dropped year-over-year by 4 percent, the first
time in four years, Rollins said. A number of utilities saw their
actual revenues drop, in many cases, reflecting rapidly decreasing
unit sales, especially in the last half of 2008.
Rollins predicts that in 2009 utilities will experience significantly
decreased unit sales, which will be reflected in reported revenues.
As Table 1 on page 21 illustrates, the utilities holding the top 10
slots in the total revenue rankings changed little from the previous
couple of years. While there was a little movement in the order of the
top 10 companies, only one newcomer, Integrys Energy, managed to
break into the top 10 list, while Consolidated Edison slipped out of
the top 10.
Integrys Energys revenue growth was driven in part by its
acquisition of Peoples Gas in 2007 and significant revenue growth in
its nonregulated businesses, Rollins said. Integrys is in the process of
divesting most of its nonregulated businesses.
Capital Expenditures and Free Cash Flow

Not surprisingly, 2008 saw a decrease in capital expenditure growth,
but not an actual decrease in capital spending from 2007 to 2008,
Rollins said. She expects this trend to continue into 2009.
Generally, the industry has made minimum capital investments
in the past 30 years, Rollins said.

A period came after the build out of the U.S. nuclear power
plant fleet where focus was on getting balance sheets more balanced.
Then came the deregulation trend where for years utility executives
faced tremendous ambiguity about what would be regulated and what
would move to unregulated status, she said.
Now we are in a period of catch up, Rollins said. Environmental
compliance, new technologies such as smart meters and smart grid,
renewable energy, demand growth and aging existing infrastructure
are all driving the need for new infrastructure and thus increasing
capital expenditures.
Based on anecdotal information, however, Rollins expects an
upturn in capital expenditure growth in 2010 as the recession winds
down and general economic indicators improve.
Capital expenditures are increasing and so are asset bases, she
said. There was more than 9 percent growth in the asset base of the
industry from 2007 to 2008, and we expect to see further growth in
2009.
Rollins said all of these capital expenditures are taking a toll
on free cash flow. An almost 90 percent growth in negative free cash
flow year over year was seen from 2007 to 2008. Although many
companies slashed budgets in 2009, capital and noncapital free cash
flow are still expected to take utilities further into negative territory.
This trend is being driven by the significant downturn in unit sales.
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Sep|Oct|2009
BEMaGS
F
BEMaGS
F
Industry Report
Table 4: Free Cash Flow
Company
Calculated Free
Cash Flow
2005
Calculated Free
Cash Flow
2006
Calculated Free
Cash Flow
2007
Calculated Free
Cash Flow
2008
Exelon
Entergy Corp.
Public Service
NRG
UGI
DTE Energy Co.
PPL Corp.
NStar
DPL Inc.
Energen
MDU Resources
Vectren
CH Energy Group
Energy West
Delta Natural Gas
Southwest Gas
RGC Resources
Central Vermont
Laclede
Hawaiian Electric
Industries Inc.
($18,000,000)
($236,628,000)
$2,417,000,000
$1,652,367,000
$1,822,000,000
$461,668,000
$3,434,000,000
$1,111,745,000
88.47%
140.81%
-19177.78%
-569.83%
($104,000,000)
($38,000,000)
$279,300,000
($64,000,000)
$577,000,000
($26,886,000)
$134,000,000
$104,409,000
$97,816,000
($16,934,000)
$152,021,000
$105,383,000
$36,800,000
($19,129,000)
($1,451,146)
($2,228,000)
$2,034,080
($56,745,000)
($19,719,672)
($1,913,105)
($12,289,000)
$42,834,000
$916,000,000
$187,000,000
$87,700,000
$53,000,000
$364,000,000
$533,461,000
($48,800,000)
$180,743,000
$177,241,000
$51,566,000
($89,286,000)
$179,603,000
$28,800,000
$12,818,000
$6,663,703
$6,974,000
($1,358,348)
($63,971,000)
($18,728,830)
$2,481,460
$6,665,000
($71,682,000)
$570,000,000
$1,036,000,000
$233,100,000
($174,000,000)
($114,000,000)
$131,250,000
($28,100,000)
$110,310,000
$117,469,000
$65,540,000
$58,882,000
$4,909,000
($36,400,000)
($51,522,000)
($3,678,000)
($2,214,000)
$6,403,000
$6,936,000
($5,595,000)
$617,000
$10,429,000
$22,421,000
$574,000,000
$535,000,000
$232,300,000
$186,000,000
$171,000,000
$120,864,000
$119,600,000
$108,996,000
$85,042,000
$73,763,000
$58,922,000
$39,709,000
$32,200,000
$25,087,000
$1,567,451
$1,393,000
$1,028,864
($469,000)
($2,213,456)
($6,319,504)
($8,435,000)
($20,089,000)
0.70%
-48.36%
-0.34%
-206.90%
-250.00%
-7.91%
-525.62%
-1.19%
-27.60%
12.55%
0.07%
708.90%
-188.46%
-148.69%
-142.62%
-162.92%
-83.93%
-106.76%
-60.44%
-1124.23%
-180.88%
-189.60%
-651.92%
-1507.89%
-16.83%
-390.63%
-70.36%
-549.54%
-10.75%
4.39%
-13.06%
-535.59%
-61.24%
-62.32%
-12.50%
-231.15%
-208.01%
-162.52%
-49.42%
-99.17%
-88.78%
230.33%
-31.36%
-146.90%
($5,237,000)
($32,394,000)
($53,580,000)
($489,000,000)
$2,439,000
$65,723,000
$70,455,000
($25,961,000)
$26,655,000
($61,084,000)
($31,818,000)
($89,124,000)
$75,523,000
$8,464,000
($44,603,000)
$4,000,000
$97,214,000
$64,032,000
$44,398,000
$53,541,000
($29,641,000)
$110,909,000
($55,270,000)
$36,381,000
($1,056,000)
($59,672,000)
$92,307,000
$226,000,000
($14,678,000)
($56,377,000)
$77,400,000
$48,767,000
($143,583,000)
($146,475,000)
($207,150,000)
$42,550,000
($24,127,000)
($31,065,000)
($35,583,000)
($54,000,000)
($54,745,000)
($69,277,000)
($72,278,000)
($72,999,000)
($73,425,000)
($101,784,000)
($107,031,000)
($107,320,000)
2184.75%
-47.94%
-138.55%
-123.89%
272.97%
22.88%
-193.38%
-249.69%
-48.86%
-30.51%
-48.33%
-352.22%
360.70%
-4.10%
-33.59%
-88.96%
-2344.57%
-205.41%
-202.59%
181.19%
-375.46%
66.63%
236.39%
20.42%
($8,031,000)
$150,900,000
($100,303,000)
($619,600,000)
$98,270,000
($579,000,000)
($111,799,000)
($120,000,000)
-213.77%
-79.27%
1292.09%
-179.52%
$5,533,000
$96,764,000
($999,459,000)
$179,659,000
($187,000,000)
($5,100,000)
$35,831,000
($592,000,000)
$38,570,000
($152,028,000)
($344,277,000)
$1,179,080,000
$315,779,000
$101,000,000
$40,200,000
$10,798,000
($16,000,000)
($48,755,000)
($79,728,000)
($260,645,000)
$642,887,000
$146,662,000
$117,000,000
($87,100,000)
($77,173,000)
($340,000,000)
($9,292,000)
($120,288,000)
($122,009,000)
($127,767,000)
($132,700,000)
($145,000,000)
($149,000,000)
($154,567,000)
($169,000,000)
($183,281,000)
50.87%
-53.19%
-119.87%
-190.48%
-223.93%
71.07%
100.29%
-50.29%
1872.46%
-2274.01%
-226.09%
-87.22%
-173.86%
-22.46%
2821.57%
-531.38%
-71.45%
-575.19%
$117,000,000
($118,200,000)
$53,000,000
($265,000,000)
$111,200,000
$18,000,000
($111,000,000)
$59,600,000
($1,236,000,000)
($200,000,000)
($201,700,000)
($233,000,000)
80.18%
-438.42%
-81.15%
-270.94%
70.64%
-539.62%
MGE Energy
Mirant
El Paso Electric
Northwestern Corp.
Unisource Energy
WGL Holdings
UIL Holdings
Southern Union
IdaCorp
Avista Corp.
Williams Companies
Empire District
Electric Co.
Pinnacle West
Reliant Resources
Allegheny Energy
AGL Resources Inc.
Otter Tail Corp.
Centerpoint Energy
Black Hills
Portland
General Electric
TECO Energy
CMS Energy
Company
Calculated Free
Cash Flow
2005
Calculated Free
Cash Flow
2006
Calculated Free
Cash Flow
2007
Calculated Free
Cash Flow
2008
CLECO
PNM Resources
Nicor Inc.
Integrys Energy
Atmos
Dynegy
Puget Energy
Ameren Corp.
PEPCO Holdings
NiSource
El Paso Corp.
Xcel Energy Inc.
SCANA Corp.
Alliant
$90,338,000
($11,706,000)
$4,300,000
($324,500,000)
$53,761,000
($219,000,000)
($327,783,000)
$316,000,000
$519,800,000
$139,300,000
($1,507,000,000)
($166,100,000)
($120,751,000)
$82,000,000
$27,300,000
($145,052,000)
($76,694,000)
$259,600,000
($264,600,000)
($113,875,000)
($360,000,000)
($564,009,000)
$287,000,000
($272,000,000)
$514,000,000
($340,000,000)
($198,900,000)
$297,996,000
$231,000,000
$4,300,000
($247,167,000)
($178,370,000)
$79,000,000
($138,400,000)
$154,660,000
($11,000,000)
($173,257,000)
($279,000,000)
$171,600,000
($31,400,000)
($657,000,000)
($679,000,000)
($523,505,000)
$5,000,000
$46,800,000
($246,231,000)
($256,854,000)
($277,300,000)
($282,800,000)
($291,942,000)
($292,000,000)
($309,419,000)
($363,000,000)
($368,000,000)
($384,600,000)
($387,000,000)
($400,100,000)
($432,619,000)
($450,000,000)
-0.38%
44.00%
-451.01%
104.34%
-288.76%
2554.55%
78.59%
30.11%
-314.45%
1124.84%
-41.10%
-41.08%
-17.36%
-9100.00%
-372.57%
2094.21%
-6548.84%
-12.85%
-643.04%
33.33%
-5.60%
-214.87%
-170.80%
-376.09%
-74.32%
140.88%
258.27%
-648.78%
OGE Energy Corp.

Southern Co.
AES Corp.
Great Plains Energy
Northeast Utilities System
Westar
FirstEnergy
PG&E
Dominion Resources
Questar
Duke Energy
Sierra Pacific
Sempra Energy
FPL Group Inc.
Progress Energy
Consolidated Edison
$140,700,000
$160,000,000
$1,394,000,000
$87,991,000
($334,151,000)
$379,000,000
($132,800,000)
$141,077,000
$1,012,000,000
($537,269,000)
$605,000,000
($140,000,000)
($17,700,000)
$491,000,000
($451,849,000)
($884,000,000)
($930,000,000)
($527,000,000)
$28,000,000
($827,000,000)
$82,900,000
($174,000,000)
$891,000,000
($172,618,000)
($465,107,000)
$1,032,000,000
($437,600,000)
($88,874,000)
$624,000,000
$214,752,000
$312,000,000
$346,000,000
$55,200,000
$367,000,000
($556,577,000)
($241,000,000)
($1,241,000,000)
($796,000,000)
$315,000,000
($493,000,000)
($229,200,000)
($150,000,000)
($68,000,000)
($183,800,000)
($866,389,000)
$367,000,000
($367,900,000)
($501,340,000)
$61,000,000
($349,947,000)
($223,000,000)
($3,867,000,000)
($242,500,000)
$83,000,000
($443,505,000)
$80,000,000
($726,000,000)
($1,168,000,000)
($949,000,000)
($373,000,000)
($559,500,000)
($559,500,000)
($563,000,000)
($570,000,000)
($585,800,000)
($605,989,000)
($614,000,000)
($659,800,000)
($662,352,000)
($669,000,000)
($834,839,000)
($879,000,000)
($895,000,000)
($941,000,000)
($1,058,000,000)
($1,076,589,000)
($1,114,000,000)
($1,147,000,000)
($1,224,000,000)
($1,337,000,000)
($1,693,000,000)
-1295.51%
144.11%
275.33%
738.24%
218.72%
-30.06%
-267.30%
79.34%
32.12%
-1196.72%
138.56%
294.17%
-76.86%
288.04%
-1374.70%
142.75%
-1492.50%
57.99%
4.79%
40.89%
353.89%
-2149.45%
-497.65%
-451.88%
-140.89%
-765.75%
81.35%
-262.01%
396.84%
-569.50%
-166.11%
55.39%
-245.29%
539.29%
5216.38%
-315.48%
138.26%
26.02%
23.33%
132.26%
-4875.00%
104.72%
Total
($2,728,826,843) $5,998,140,985
-319.81%
87.27%
87.27%
599.54%
($10,193,681,000) ($19,089,287,645)
-269.95%
87.27%
Although many companies slashed budgets in 2009,

capital and noncapital free cash flows are still expected to take utilities further into negative territory.
Sep|Oct|2009
BEMaGS
F
BEMaGS
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Industry Report
Dividends Up, But Growing Slower
In last years report, Rollins said that shareholders were the big
winners due to dividends and share prices. While most utilities are still
paying dividends to their shareholders, the dividends are declining
along with share prices.
Dividend policies are still fairly sacred in this industry, Rollins
said. Integrys and Great Plains both cut their dividends in 2009 and
saw an immediate hammering of their stocks. While divided payout
was up more than 6 percent from 2007 to 2008, we do not expect to
see that kind of growth from 2008 to 2009.
Generally, utility stocks are still trading at 15 to 20 percent below
their highs back in June 2008.
In addition, Rollins said another trend has emerged: For the first
time since 2002, utility stocks on average are not outpacing indices
such as the Dow Industrials and the S&P 500.
Climate Bill Adds Uncertainty

While utilities have been focused on adjusting to and operating in the
economic recession, many have an even bigger issue to address
pending environmental legislation. In late June, H.R. 2454: American
Clean Energy and Security Act 2009, also known as the WaxmanMarkey bill, was approved by the House and sent to the Senate. This
bill includes a cap-and-trade provision for dealing with greenhouse

gas emissions.
Just how much such a bill will cost the industry and its customers
is the subject of much debate. Some estimates show the cost to be as
low as $175 per household, while others come in above $1,000 a year
per household.
At this point, the true cost is still unknown, but utilities will feel
an impact.
Separating the spin from reality on both sides of this issue is
difficult, Rollins said, but if passed with its intended purpose, those
companies with less reliance on coal should be the winners.
In addition, no one knows whether the Senate will approve a
version of the bill this year. Most people in the industry agree that if a
bill is not sent to the presidents desk in 2009, some version of a clean
energy bill will be signed into law in 2010.
It is not clear that a cap-and-trade bill will pass this session, and if
it does, it isnt clear what it will actually contain, Rollins said. There
are very powerful interests on both sides of this issue. It is likely that if a
bill does pass, it will be a muted version.
A pending clean energy bill and a weak economy have affected and
will continue to affect utilities in 2009 and beyond. Next years numbers
will tell us how much.
Dont miss these

Archived Webcasts.
The Smart Grid Horizon: From a Distribution
Automation Vantage Point
originally broadcast: June 16, 2009, sponsors: Itron, Comverge,
Sensus, AT&T, Open Systems International
Information Managemen
Management in Utilities:
How to Prepare for the Imminent Increase in Data
originally broadcast: July 28, 2009, sponsor: SAP
Municipals Small and Large Benefit from Smart Meter Solutions

originally broadcast: September 2, 2009, sponsors: Itron, Tantalus,
Black & Veatch, Oracle
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Utility Financial Performance:

Warning Signs Ahead
by Brad Kitchens and Greg Litra, ScottMadden Inc.
Even amid signs of economic recovery, the recent collapse of

the stock market in the winter of 2008-09 and talk of a new
post-recession investment environment has led to concerns
about what factors will affect electric utility industry
valuations going forward. What will drive stock prices? How
should corporate executives preserve shareholder value?
While price-to-earnings ratios of various electric sectors

had reached some heady heights during 2000-01 and 2007,
those valuations might have overshot on the downside their
recent historical norms. (See Figure 2.)
Figure 2: Price to Trailing 12-Month Earnings Ratio
For Selected Energy Indexes (Mid-1999 to Mid-2009)
24
Drivers of Utility Stock Prices
Greg Litra is a director

at ScottMadden Inc.
with principal expertise
in financial, economic
and regulatory analysis,
strategic planning,
corporate governance,
risk management and
transaction support. He
graduated from the
University of South
Carolina School of
Law and earned an
M.S.I.A. from Carnegie
Mellon University and
a bachelors degree
from Wofford College.
Reach him at glitra@
scottmadden.com.
Figure 1: Changes in Selected Energy Indexes

And the Dow Jones Industrials (Mid-1999 to Mid-2009)
100
80
SNL Electric Company

SNL Energy Large Diversified
Dow Jones Industrial Average
60
Index Value Change (in %)
Brad Kitchens is
president and CEO of
ScottMadden Inc. He
has a bachelors degree
from Rose-Hulman
Institute of Technology
and an MBA from Duke
University. Reach
him at sbkitchens@
scottmadden.com.
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Source: SNL Financial
Many attribute the most recent rise in stock performance

to a defensive flight by investors to the relative safety of
utility returns. That the sector continued to have access to
capital, albeit pricey, through the worst of the credit crunch
added to its appeal.
22
Price-Earnings Ratio
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SNL Electric Company

SNL Energy Large Diversified
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Authors
Stock prices can serve as a proxy for the health status of an industry. Industry fundamentalsrevenue sources and trends,
asset base, reinvestment requirements, operating and overhead costsremain significant stock cost drivers. And while
macroeconomic factors still influence the direction of electric
utility stock prices, a few industry-specific fundamentals have
helped those valuations avoid some, though not all, of the declines of the broader averages.
The collapse of the merchant power sector in the early
2000s and subsequent downturns in 2001 and 2003 caught merchant generator and electric utility stock prices in the downdraft.
Utility stock prices have since slowly climbed back from their
falloff as utilities deleveraged their balance sheets, unwound
diversification strategies, resized their competitive wholesale
businesses and refocused on their core regulated activities.
Since then and until mid-2008, electric utility stocks have performed well (or in the case of diversified utilities, roughly the
same) compared to broader indexes. (See Figure 1.)
Source: SNL Financial
But as utility stock prices have weathered the recent

downturn with relative resilience, unfavorable trends continue
to weigh upon the sector:
Financial consequences of climate change legislation,
renewable portfolio standards and implementation
of smart grid. Potential constraints on carbon dioxide
emissions, new renewable resource requirements and smart
grid improvements needed to realize more effective energy
efficiency and demand response likely will entail an expansion
of assets, many in rate base. The resulting returns likely will
be recoverable in rates. Unfortunately, the uncertainty and
scale of potential investment and, as a result, the potential
for sizeable rate-increase requests is beginning to weigh upon
the industry. Cash needed to fund capital expenditures will be
significant and potentially burdensome. Regulatory scrutiny
almost certainly will be on the rise.
Natural gas price volatility. Natural gas-fired generation
has been the predominant form of power generation capacity
installed in the past five years and comprises slightly more
than 40 percent of the installed capacity and more than 20
percent of net generation in the U.S. Until recently, price
volatility has been persistent as natural gas has become a key
fuel for the power sector. Suddenly, storage levels are on the
rise, particularly in the face of mild temperatures and limited
supply disruptions. The recent promise of more economic,
unconventional gas sources could lead to abundant gas
supplies, which might mute price volatility. As recently as the
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early 2000s, however, the industry banked on an infinite steady supply
of $4-per-million British thermal units of gas, but price escalation
through the mid-2000s proved those hopes wrong. Margins remain
vulnerable to unfavorable unhedged swings in gas prices, especially
for firms with a sizeable wholesale business. Conversely, continued
low gas prices threaten companies focused on unhedged coal and
other forms of baseload generation. Either factor may blindside the
industry and disrupt certain company valuations.
Anemic power sales. Through the first four months of 2009,
revenues for the U.S. electric industry were off by more than 4 percent
from the same period in 2008 because of flat residential sales and a
nearly 13 percent drop in industrial sales. Most industry observers
expect these sales levels to return, but concerns surround the timing
of the recovery and the possibility that sectors such as automobile
manufacturing might never fully regain their pre-recession levels of
demand. Given the high fixed-cost nature of the industry and absent
a different ratemaking paradigm, a prolonged sag in electric sales
revenues will continue to dent the industrys earnings prospects.
Rate recovery. Timely, complete recovery of prudently incurred
costs is critical for utilities. The expiration of many rate freezes in the
early and mid-2000s forced many utilities to apply for rate increases
to recover expenses incurred because of escalating fuel prices and
investments in grid-reliability upgrades and new generation capacity.
The Edison Electric Institute estimates that despite the current
recession, investor-owned electric utilities plan to commit some
$230 billion for capital projects during 2008-10. Also looming for
the industry are new and unknown costs for carbon-control measures
and other environmental mandates. With customer resistance to rate
increases, a constructive relationship with regulators will be critical
to avoid lagging or outright denial of recovery adjustments and to
preserve balance sheet strength and utility earnings.
Utility Performance During Past Downturns

History can sometimes be instructive when gauging expectations for
industry stock performance. During the Great Depression after the initial stock market crash of 1929, utility stocks performed on par with
the broader average. The Dow Jones Utilities Index, created just prior
to the crash at the markets peak, lost more than 88 percent of its value
from early September 1929 to mid-1932, roughly paralleling the Dow
Jones Industrial Average (DJIA), which fell to less than 11 percent of
its early September 1929 value during the same period. The indices
diverged in mid-1933, however, as the DJIA recovered to 40 percent of
its value while the Dow Utilities languished at levels below 20 percent
of its pre-crash value until and beyond the outbreak of World War II.
There are similarities and differences between the electric utility industry during that period and todays Great Recession (see Figure 3).
These are long-lived events. In all, the Dow Jones Utilities Index
took about 30 years to return to pre-crash levels.
More worrisome is a repeat of the 1970s through early 1980s. The
industry faced challenges similar to those in todays environment:
Ambitious, heavily financed capital expansion plans (including
nuclear plants) made more expensive by the effects of spiraling
inflation on materials, labor and borrowing costs,
Meaningful cost increases in building and operating power plants
Figure 3: The Electric Utility Industry:

Comparing Todays Recession and the Great Depression
Similarities
Differences
Stable, regulated earnings stream
Significant growth potential with still
Relatively ready access to debt capital
relatively low electric market penetration
Large incremental investment
Rapidly improving technology
in infrastructure
Regulatory drag with enactment of the
Scale economies following
Public Utility Holding Company Act (PUHCA)
industry consolidation
Active public power movement, with public
Large-scale fiscal stimulus
outcry over excessive utility profits
driven by new environmental regulations affecting air, water and
hazardous waste,
Escalating prices for all generation fuels and legislative limitations
on wider use of certain fuels (natural gas and petroleum),
Slackened electric demand caused by a sluggish economy and
conservation in the 1970s and exacerbated by a recession in the
early 1980s, just as new capacity was coming online.
The primary difference between this and these earlier periods
is inflation, which today is a nagging concern given the level of
government spending but not yet a problem for the U.S. economy.
Implications for Industry Leaders

Earnings growth will not be achieved easily when customers are worried
about the continued viability of their businesses and jobs, increasing their
savings rates and growing more sensitive to electricity price increases as
wages and costs of other goods and services are in decline. Utilities also
have some unknown financial exposures to regulatory mandates and fuel
prices and must prepare for various scenarios, the outcomes of which
could affect the stability, certainty and sustainability of earnings.
Companies must continue to aggressively pursue constructive
regulatory relationships, as a primary strategy. This is the cornerstone
of revenue consistency and profitability. Given the scale of potential
capital expenditures for new energy resources (including new and expensive technologies such as carbon capture and storage, advanced nuclear, renewables and energy efficiency), a regulatory predetermination
of prudency will help avoid some of the 1970s expansion pitfalls.
Second, utilities must hedge their bets on generation fuels. The
past has taught us that a diversified portfolio may be marginally more
expensive in the near term but could prevent price volatility, public
furor and policy intervention later.
Third, a continued focus on wringing costs out of the enterprise
and actively managing the risks of potential price inflationwhether
administrative or general costs, construction or fuel expenseswill
always remain an important driver of shareholder value.
Finally, as the cost-reduction scale declines, utilities must think
more creatively about topline growth and create attractive services
and products to leverage ever-expanding technological advances
in battery and other electric technologies, as well as the publics
continued interest in sustainability and green energy.
The industry has done well historically during uncertainty and
adversity. The stabilization of cash flows is evident as a result of recent cost-control actions. An improved economy should assist with
longer-term, top-line growth. As these factors develop, higher valuations should result for many utilities.
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Pursuing Government Grants
Authors
Casey Herman is the
leader of PricewaterhouseCoopers U.S.
Utilities Accounting
and Auditing Practice.
He has a Bachelor of
Science in economics
and accounting from
Tulane University.
Philip Koos is a director

in the Government
Contracts Practice at
PricewaterhouseCoopers and has more than
15 years of government
contract accounting and
compliance experience.
He graduated with a
Bachelor of Science
from York College of
Pennsylvania and a
Master of Business
Administration from The
American University.
The economic stimulus package offers utility and power

companies an opportunity to jump-start smart grid and other
clean energy projects.
Its no wonder utility companies are enticed by the
American Recovery and Reinvestment Act of 2009 (ARRA)
and its billions of economic stimulus dollars waiting to be
spent on renewable energy projects, smart grid technologies
and clean energy initiatives.
Signed into law Feb. 17, the federal legislation provides
about $83 billion in tax incentives, loan guarantees and
government grants for investments in energy-efficient
technologies and renewable energy programs. These
incentives might be a precursor to a more comprehensive U.S.
energy policy with renewable energy and a cap-and-trade
climate change as prominent components.
As the legislative debate on how best to cut carbon
emissions continues, utility companies are looking at federal
tax incentives and grants to offset investments in costly
infrastructure projects that are mostly optional but soon could
become mandatory.
Rather than delay, many utility companies see federal
stimulus grants as an opportunity to jump-start their energy
initiatives. There is also a presumption that regulators expect
utilities to access these incentives to mitigate raising customer
rates to pay for the improvements.
The stimulus package earmarks $4.5 billion for smart grid
projects to help utilities retool the electrical grid while saving
power and reducing congestion that can result in blackouts.
As wind, solar and geothermal energy sources evolve, smart
grid technology becomes essential to making renewable
energy sources available to customers with evolving plug-in
needs from new electronic devices to electric cars.
Because the energy efficiency advantages of a smarter
electrical grid are critical and the projects are expensive to
build, the Department of Energy recently raised the grant cap
from $20 million to $200 million. Further, the Federal Energy
Regulatory Commission issued a policy statement and plan to
accelerate smart grid technology development.
But its not easy money. With significant financial and
regulatory incentives to apply for stimulus grant funding
come federal oversight provisions that might require some
utility companies to implement new procedures or tailor
policies to ensure their compliance.
The government anticipates spending $74.5 million on
federal and state audits of approved stimulus projects. An
additional $84 million of the ARRA money will be spent
on oversight activities of the Recovery Accountability and
Transparency Board, created to prevent fraud, waste and
abuse.
by Michael A. Casey Herman and Phil Koos, PricewaterhouseCoopers
To know whether pursuing a federal stimulus grant

will be advantageous, utility companies must understand the
government grant process and know about the compliance,
accounting and tax implications.
Federal Grant Knowledge, Preparation

At $787 billion, ARRA is the largest combined spending and
tax bill in U.S. history. Accountability and transparency are of
primary importance to the U.S. government. Even companies
with federal grant experience and knowledge might need
a refresher to understand and comply with ARRAs new
reporting measures.
Without the proper compliance structure, a utility could
be excluded from receiving ARRA grants or risk having
grant payments suspended before a project is complete.
Failure to meet any of the complex reporting, accounting
and compliance requirements could cause an award to be
terminated and result in unwanted publicity.
Compliance, Reporting Depend on Whose Rules

Compliance requirements may vary depending on the type
of award (contract or grant) and whether the grant is federal
or state. Differences also might exist among states, making
it difficult to identify applicable regulations and laws. It is
important to have this kind of information before the grant is
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awarded because compliance requirements begin with the proposal
and application and generally end three years after final payment.
Compliance begins with the pricing included in the proposal or
budget submitted to the funding agency. If compliance requirements
associated with the cost proposal or budget are not fully understood,
it could result in future disallowance of costs by the government or
findings of defective pricing associated with contracts subject to the
Truth in Negotiations Act (TINA). Such findings can have severe
impact because they reduce the costs that can be recovered by a
company and may result in fines and penalties if certain laws, such as
TINA, are violated.
Key elements associated with proposal pricing include the
allowability of costs, methods to estimate cost categories such as
labor, ensuring proposed cost sharing conforms to the rules and
indirect costs calculated using the appropriate causal or beneficial
relationships. Also, ensuring the pricing is properly supported by
basis of estimates, historical data and other corroborating information
can help companies mitigate findings associated with pre-award
audits of the proposal or budget and reduce the risk of defective
pricing allegations. The proposal process also gives organizations an
opportunity to understand the compliance requirements that will be
applied during the performance of the contract.
Compliance during the life of an award involves many systems
and might require developing additional policies, procedures and
internal controls. The compliance requirements involve the accounting
system and related subsystems including but not limited to:
Time and expense reporting,
Labor distribution,
Procurement,
Materials management,
Billing,
Government property, and
Contract and subcontract administration
For example, the government may take an ownership interest in
equipment and real property purchased under an award. This often
results in seeking disposition instructions from the government at the
end of the project, which may have a negative cash flow impact on the
company. Understanding this up-front helps companies make the bid
or no-bid decision by considering potential pricing and negotiation
techniques that reduce the risks associated with government
property.
Understanding requirements associated with the regulations is
important to developing a negotiating position and mitigating risk of
fraud, waste, abuse, adverse pre-award findings that may preclude
an award and adverse findings during performance of an award. For
companies new to government-funded awards, this requires early
planning to assess and compare current systems with the award
requirements so risks are understood and action can be taken to
remediate deficiencies prior to accepting an award. Failure to plan
might lead to significant government fines and penalties and negative
media coverage if fraud, waste or abuse exist or negative audit
findings result.
In addition to core system requirements, companies are subject
Sep|Oct|2009
to other equally important laws and regulations. For example, ARRA

funding opportunities may require the application of the provisions of
the Buy American Act as well as the concept of prevailing wages of the
Davis-Bacon Act. The Buy American Act could have implications on
procurement methods, and the prevailing wage provisions can affect
reporting, record retention requirements and labor costs. Also applicable to Recovery Act funds is the False Claims Act, which imposes
significant criminal and civil penalties, fines and possible prosecution
if invoices include improper amounts. Having the proper project reporting process and billing controls is critical to mitigate risk.
Key elements associated with proposal pricing include

the allowability of cost, methods to estimate cost
categories such as labor, ensuring proposed cost sharing
conforms to the rules and indirect costs calculated using
the appropriate causal or beneficial relationships.
Ensuring the pricing is properly supported by basis

of estimates, historical data and other corroborating
information can help companies mitigate findings
associated with pre-award audits of the proposal or budget
and reduce the risk of defective pricing allegations.
Reporting
Recovery Act awards include the normal reporting requirements
associated with government funding including but not limited to
progress and financial reports and annual incurred cost submissions.
The Recovery Act, however, requires substantially more reporting
and transparency than is normally expected with government funding,
including the reporting of data and information in public forums
for review by all interested parties. Specifically, recipients may be
required to report on the following:
Job creation and retention,
Total ARRA funds awarded, amount of money received and
expended and the funding amount not yet committed as a project
expense,
Details of the project, including a description of the activity and
evaluation of the completion status, and
Detailed information on subawards, including names and
locations of subawardees, primary place of performance of the
work, a description of the subawards and unique identifiers (i.e.,
name or code) for the subawardees and their parents.
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In addition, entities receiving Recovery Act funding may
be required to report the total compensation of the five highestpaid individuals employed by the contractor and the first-tier
subcontractor.
Companies also must be aware that federal government
regulations may change and states may implement their own reporting
requirements. Therefore, before proposing on or accepting an award,
companies should have the proper systems and methods to stay
current on state and federal reporting requirements and to be able to
identify and capture the right data to meet reporting requirements.
Companies also should be aware that the information provided
to the government may include data that can be obtained through the
Freedom of Information Act. Therefore, protection of sensitive and
proprietary data must be a top priority.
Securing Stimulus Funding

Utility company leaders who understand federal grant compliance,
accounting and tax implications are able to apply for and secure
funding to advance the strategic directions of their companies.
Although deadlines for companies to submit certain grant
applications are approaching, there is ample time to act now and take
advantage of federal funding to:
Prioritize projects by developing a list of viable ventures,
Conduct an early assessment of each project to understand the
objectives of each opportunity and the evaluation factors to use

for calculating an effective bid and the costs involved to submit
the proposal or application,
Develop and manage the application by assessing the costing
techniques to facilitate compliance,
Develop application strategies that strive for competitive
advantage while being mindful of economic consequences, and
Evaluate accounting and compliance systems by:
Assessing compliance gaps in the organization and
developing and implementing actions to remediate any
weaknesses and enhance the organizations competitive
position. The goal is to convince the government that
the organization is ready to accept and perform under an
award.
Understanding compliance risks and public perception
risks and developing methods to mitigate any risks that
might arise because of the transparency requirements of the
economic stimulus package.
Federal stimulus grants might not be easy money, but ARRA

funding is available and can provide utilities a crucial boost to
implement smart grid technology and other energy initiatives, such as
renewables and core infrastructure. It also can help the utility industry
enhance its public image and put a spotlight on the many areas where
the industry is engaged in clean energy programs.
Exclusive C Three Equity Index

Fifth Positive Month in a Row
12 Month Value of $100 Invested on 8/1/2008
July continued the move back into positive

Even With Five Months Of Good News, None of our Indicies Are Positive Yet
2008 The C Three Group
territory for The C Three Groups equity
$110
indices. They are still outperforming the Dow
Industrials and the S&P 500.
$100
This in light of the fact that many
$90
companies are still reporting depressed yearover-year unit sales and are predicting that
$80
the unit sales downturn is going to last longer
than originally predicted.
$70
Some industry wags are even beginning
$60
to speak the unspeakable: that the sales
declines could be permanent.
$50
Southern Co., Xcel Energy, Portland
G&E, DTE Energy, FirstEnergy, Exelon
$40
8
9
8
8
8
8
9
9
9
9
08
08
08
and Public Service Enterprise have reported
0/0
8/0
1/0
1/0
0/0
1/0
1/0
0/0
1/0
1/0
31/
30/
31/
3/3
2/2
8/3
4/3
9/3
7/3
1/3
6/3
7/3
5/3
12/
11/
10/
continued year-over-year declines in retail
The C Three Group Composite
LDC
Regulated Electric Gas Combination
and wholesale sales.
Less
Regulated
Gas
Focus
Regulated
Electric
Less Regulated Electric Focus
Only Dominion Resources has so far
Dow Jones Industrial
reported slightly higher year-over-year unit
sales. While unit sales declines have been and residential sales are down as well. The more companies report 2Q earnings.
steepest in the industrial sector, commercial C Three Group expects this trend to hold as
Sep|Oct|2009
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March 23-25, 2010 Tampa Convention Center Tampa, Florida
WE KNEW THE GRID BEFORE IT WAS SMART!

Register today and save $200!
Download the registration form online to receive additional discounts for utilities, government facilities, students, and water utilities.
Celebrating 20 years as the leading annual T & D event. DistribuTECH covers automation and control
systems, energy efficiency, engineering, demand response, renewables integration, power delivery equipment
and water utility technology. No show provides more educational and networking opportunities than DistribuTECH.
Join us for our 20th Anniversary celebration!
Visit www.distributech.com for more information.
Co-located Event: Utility Products Conference & Exposition

CATV, and water equipment. Utility Products Conference & Exposition will have its own exhibit
UTILITY
floor and a dedicated conference track. All attendees, however, will be able to visit both exhibit
conference & exposition
Utility Products Conference & Exposition focuses on the buyers and sellers of power, telecom,
PRODUCTS
floors. Full conference registration is only $175 (if registered by December 31, 2009). For more
information, please visit __________________
www.utilityproductsexpo.com.
Owned &
Produced by:
Flagship Media Sponsors:
Supporting Publications:
Now Including:
Host Utility:
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Generation
Climate Policy Risk Management

in the Electricity Industry
f
Authors
Dr. Richard Sandor is

founder, chairman and
CEO of the Chicago
Climate Exchange and
the Chicago Climate
Futures Exchange.
Dr. Michael Walsh is
executive vice president
of the Chicago Climate
Exchange.
For electric power companies facing climate policy risk, the

message is clear: If you are not proactively managing your
exposure, now is the time to start.
The U.S. House of Representatives has passed carbon
cap-and-trade legislation that would impose carbon dioxideemission limits in 2012 and steadily increase thereafter, and
the Senate is considering similar mandates.
Given the major economic implications, building
knowledge of your companys emissions inventory and
developing intelligent compliance and risk management
strategies are critical. This means understanding the full scale
of your economic exposure, assessing compliance options and
implementing compliance and trading procedures that will
help you cost-effectively meet any federal emission limits.
Many energy producers can develop a good strategy by
leveraging their previous experience in market-based, environmental management. While many power generators have
more than a decade of experience in managing within emission-allowance systems, the nature and economic scale of the
proposed carbon caps is unprecedented.
Electricity producers met and solved the acid rain problem when the federal government regulated sulfur dioxide
and nitrogen oxide. Creation and implementation of management plans and cost controls for this unprecedented task were
challenging initially. After more than a decade of experience
under the Clean Air Act Amendments of 1990, we see that
major cuts in acid rain emissions have been realized at moderate cost, public health benefits are substantial and managing
SO2 and NOX has become another part of doing business.
Our family of U.S. exchangesthe Chicago Climate
Exchange (CCX) and Chicago Climate Futures Exchange
(CCFE)hosts rules-based and transparent trading for environmental markets. Reductions achieved through CCX are
the only reductions made in North America through a legally
binding compliance regime providing independent, third-party verification by the Financial Industry Regulatory Authority
(FINRA, formerly NASD). CCFE is a Commodity Futures
Trading Commission-regulated market that offers standardized and cleared futures contracts on emission allowances and
other environmental products and provides counterparty, riskfree transactions.
In operating these exchanges, we work with a range
of electric power generators: rate-regulated investor-owned
utilities such as Tampa Electric Co. (TECO) and American
Electric Power (AEP); merchant generators such as NRG
Energy Inc. and Reliant Energy; municipals such as American Municipal Power Inc. Ohio; and co-ops such as Hoosier
by Richard Sandor and Michael Walsh, Chicago Climate Exchange

Energy and Associated Electric Cooperative Inc. in Missouri.
Along with a diverse, multisectoral group of industrials, governments and universities, these members of CCXs cap-andtrade program have taken on voluntary, legally binding commitments to reduce their carbon emissions 6 percent below
2000 levels by 2010.
We also get to see implementation of best practices
through our work with energy companies that use our federally regulated futures and options contracts to manage price
exposure for emission allowances in the Environmental Protection Agencys (EPAs) SO2 and NOX programs.
Active hedging through use of CCFEs futures contracts
for the newly launched northeast U.S. Regional Greenhouse
Gas Initiative (RGGI) have made the CCFE market the industry price reference for this first mandatory U.S. CO2 capand-trade program.
Responding to customer demand, CCFE recently
launched the only futures contract covering CO2 emission allowances for a national U.S. regulatory environment. The contracts, for expiration dates in January 2013 and later, require
delivery of U.S. emission allowances established in a federal,
mandatory, cap-and-trade program. If there is no federal mandate when a contract expires, sellers must deliver specified
emission allowances established under other mandatory programs (including European Union and RGGI allowances).
As the debate in Washington, D.C., continues, companies
are left waiting in holding patterns for details while they consider how to integrate carbon management into their overall
business plans.
Basic unknowns remain: What will emission limits be?
How much might my emissions exceed the cap and necessitate mitigation through market transactions?
In considering emerging risks, however, some things are
known. If a mandatory carbon cap becomes law, the electricity industry will face a new cost center that impacts budgets,
shareholders and customers. These knowns signal it is time
to organize and test options for near-term implementation of
risk-management strategies.
Legislative Direction
The U.S. House recently passed the American Clean Energy
and Security Act of 2009the Waxman-Markey bill. While
the content, timing and political fate of final legislation hinges
heavily on Senate action, the major economic implications
of carbon and renewable energy goals make it important to
understand the bills core elements.
Like the existing SO2 and NOX cap-and-trade programs,
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each power plant would be responsible to obtain and retire emission
allowances (or project-based offset credits) in amounts equal to its
total calendar year emissions. When free allowance issuance ends in
2030, all regulated entities will be required to purchase 100 percent of
the allowances needed for compliance.
To assure that the value of freely issued allowances results in
customer benefits, the allowances dedicated to the sector are issued
directly to local distribution companies (LDCs). Public utility
commissions (PUCs) are assigned overseeing disposition of the
allowances issued to LDCs. Emission allowances will not be issued
to an LDC until the PUC completes a ratemaking process addressing
how it will use the allowances and reports that plan to the EPA.
The quantity of allowances issued to each LDC is based 50 percent
on its power generators historic emissions from power generated for
The quantity of allowances issued to each LDC is based 50 percent on its power generators historic emissions from power generated for retail, and 50 percent on its share of total national
electricity deliveries. The latter calculation is updated every three
years. Unused allowances can be banked for use or sale in later
years. As one of several cost-containment features, regulated entities can borrow allowances from their next year allotment at no
cost and from years beyond that with interest. A limited earlyaction crediting provision allows owners of verified early industrial emission reductions and emission offset projects to receive
federal allowances.
retail, and 50 percent on its share of total national electricity deliveries.

The latter calculation is updated every three years. Unused allowances
can be banked for use or sale in later years. As one of several costcontainment features, regulated entities can borrow allowances from
their next year allotment at no cost and from years beyond that with
interest. A limited early-action crediting provision allows owners
of verified early industrial emission reductions and emission offset
projects to receive federal allowances.
Sep|Oct|2009
Initial analysis suggests many coal-based utilities would start

short by 25 percent in 2012. Applying this shortfall to a generator that
emits 10 million tons a year would imply a purchase obligation of 2.5
million tons of emission allowances. At an allowance price of $20 per
ton, (price scenarios are discussed later), this would add $50 million
to annual operating costs.
Like the electricity sector, oil refiners are covered starting in
2012. Refiners are responsible for the carbon footprints of their sold
products (gasoline, diesel, jet fuel, etc.), but receive essentially zero
allowance allocation.
This carbon footprint of 2.5 billion metric tons of CO2 would have
to be covered through purchase of allowances at the federal auctions or
from other sectors that are given allowances for stimulating objectives
such as end-use energy efficiency (e.g., allowances are issued to state
governments that will sell allowances to fund efficiency programs).
A rough estimate of fuel-price impacts is 1 cent per gallon for
each dollar of allowance costs (e.g., a $20 allowance price converts to
a 20 cent per gallon gasoline price increase).
Manufacturers are covered starting in 2014. Their allocations are
relatively generous in part to protect international competitiveness of
trade-sensitive industries. Starting in 2016, natural gas distributors
must cover the carbon content of the fuel they deliver (except to
power plants). As with all sectors, allocations to these sectors phase
down to zero by 2030.
Allowances imports are allowed from approved comparable
foreign cap-and-trade programs. Credits from approved domestic
and international mitigation projects, such as methane capture and
tropical forest protection, can be used for compliance.
Up to 1 billion domestic and 1 billion international offsets can be
used each year. Costs, technical capacity and the multitude of detailed
rules and required international agreements, however, will make it
difficult to realize these quantities.
The bill also sets CO2 emission performance standards for
new electricity plants. The standards, which would take effect after
carbon capture reaches specified installation levels nationally, would
effectively require new plants to capture carbon or use combinedcycle natural gas.
To stimulate carbon capture and sequestration, the bill authorizes
an industry-led and funded Carbon Storage Research Corp. and
allows considerable allowances to be used as a bonus to plants that
install such systems.
A $10 minimum auction price and reserve allowance auctions
at $28 (these prices rise annually by 5 percent plus inflation) suggest
an initial range of possible allowance prices. The EPAs economic
analysis yields near-term prices of $11-$17 per metric ton of CO2,
rising to around $20 in 2020 and the mid-$20s in 2025. The modeling
generates prices considerably higher if international offsets do not
flow in at maximum allowed levels.
Climate Policy Risk-Management Best Practices

Working with leading energy companies, we have seen a suite of
practices that drive superior results in cost-effectively complying with
CLIMATE continued on 39
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Carbon Recycling: An Alternative

to Carbon Capture and Storage
c
Author
Rowan Oloman is a
freelance writer in
Vancouver, Canada.
She has a masters
degree in environmental
management from the
University of New South
Wales and a bachelors
degree in environmental
geography from the
University of Sydney.
Oloman works as
the director of
several international
conservation projects
and as a researcher for
green tech solutions.
Carbon capture and storage is being hailed as the answer to

the globes most pressing question: What will we do with the
27 billion metric tons of carbon dioxide emitted yearly from
the burning of fossil fuels?
Touted as the most promising interim solution to deal
with the greenhouse gas responsible for global warming,
carbon capture and storage still remains unproven, costly and
will not be commercially available for another 10-20 years.
Meanwhile scientists are exploring alternatives to carbon
capture and storage by capitalizing on CO2 as a commodity
instead of treating it as a waste.
Twenty-seven billion tons of CO2 is already a hefty
number, but energy-related CO2 emissions are projected to
reach 43 billion metric tons per year by 2030, an increase
of 60 percent. A report by the International Energy Agency
(IEA) estimates that growing energy demands from emerging
giants such as China and India coupled with a lack of costeffective alternatives to fossil fuels means that by 2050, 77
percent of the worlds power still will be derived from fossil
fuels.
We will require immediate policy action and a
technological transition on an unprecedented scale, IEA
Executive Director Nobuo Tanaka said in Tokyo after
releasing the report.
Carbon capture and storage, the process of capturing
CO2 and storing it in deep geological formations in the ocean
or as mineral carbonates, is being promoted by the IEA and
others as the most promising technology to deal with fossil
fuel-derived emissions. Not negating the role of alternative
energies, the IEA is merely realistic about the enduring use
of fossil fuels and the urgent need to deal with the resulting
CO2.
U.S. Secretary of Energy Steven Chu announced May
15 at the National Coal Council that $2.4 billion from the
American Recovery and Reinvestment Act will be used to
expand and accelerate the commercial deployment of carbon
capture and storage technology, including financing to train a
generation of engineers and geologists to work in the field.
To prevent the worst effects of climate change, Chu
said, we must accelerate our efforts to capture and store
carbon in a safe and cost-effective way.
Governments in Europe, Australia, Canada and China
also are investing in the technology. Nevertheless, several
massive hurdles still stand in the way of full-scale carbon
capture and storage deployment.
U.K. consulting firm McKinsey figures that adding
by Rowan Oloman, contributing author

carbon capture and storage to the next generation of European
power plants could lift their price by up to $1.3 billion
each. The firms analysis shows that the typical cost of a
demonstration project is likely to be in the range of $80 to
$120 per tonne of CO2 sequestered.
Legally, there are concerns whether CO2 transport and
long-term storage present human- or ecosystem-related risks
and who is responsible if a leak occurs. While progress is
underway in some countries, no country has developed the
comprehensive, detailed legal and regulatory framework
necessary to effectively govern the use of carbon capture and
storage.
Legally, there are concerns whether CO2 transport and

long-term storage present human- or ecosystem-related risks and who is responsible if a leak occurs. While
progress in underway in some countries, no country has
developed the comprehensive, detailed legal and regulatory framework necessary to effectively govern the use of
carbon capture and storage.
No full-scale carbon capture and storage project that

captures and sequesters CO2 from a coal-fired power plant
exists. The IEA is hopeful that 10 full-scale demonstration
plants will be running globally by 2015, meaning it might be
10 to 20 years before carbon capture and storage technology
is readily available.
So why expensively transport and store the CO2
underground when it could be profitably recycled postcapture?
Researchers and start-up companies are investigating a
range of CO2 conversion methods, said Larry Kristof, CEO
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of Mantra Energy. The company is gaining international recognition
in carbon recycling.
The market is open for innovation, Kristof said. It is likely that
governments will soon legally mandate carbon capture from industrial
plants, and there needs to be a cost-effective way to implement it.
Mantras technology, the electro-reduction of CO2 (ERC), aims
to take CO2 directly from industrial waste gases and convert it to
formate salts, formic acid or both, which are valuable chemicals used
in industrial applications. Formic acid also has the potential to lead in
fuel cell development as a direct fuel and a fuel storage material for
on-demand release of hydrogen.
The ERC technology could provide a net revenue of up to
$700 per tonne of CO2 recycled, with a return on investment (ROI)
previously forecast at 20 percent per year, depending on local costs.
Compared with carbon capture and storage, the ERC provides
a positive ROI, not an unrecoverable cost. Plus, a demonstration
ERC unit could be installed at a clients premises within a year and
a commercial plant within two yearsmuch faster than for carbon
capture and storage.
In a speech to the United States Senate, Margie Tatro, director
of Fuel and Water Systems at Sandia National Laboratories, a U.S.
Department of Energy research center that develops science-based
technologies to support national security, advocates that carbon
recycling is the way of the future.
We must act now to stimulate this area of research and
development, Tatro said. Other countries are exploring reuse and
recycling of CO2, and it would be unfortunate if the U.S. became

dependent on imported technology in this critical area.
Carbon recycling options being developed globally vary. The
range includes the biochemical conversion of CO2 into algal biofuel,
the thermochemical conversion into methanol and the biocatalytic
or solar photocatalytic conversion of CO2 to fuels. Each has its own
advantages and disadvantages, and some are more believable than
others.
At this stage, what sets Mantra, and a handful of others, apart is
that it has a publicly disclosed patent application backed up by several
technical articles in reputable journals and already has established
market interest for its products.
As fear of climate change grips the globe, businesses and
governments are desperate to find an answer to the CO2 problem.
Relying solely on carbon capture and storage is incredibly risky and,
in many places, unworkably expensive. More imaginative thinking
shows that the 27 billion metric tons of CO2 per year might represent
a business opportunity.
A budding industry, carbon recycling for profit offers a viable
alternative to carbon capture and storage programs. As a portfolio
of solutions must be developed to address climate change, carbon
recycling is destined to be at the forefront.
CLIMATE continued from 37
requirements of emission cap-and-trade programs. Some of the best

practices include:
Making climate risk management strategy a board-level issue,
Implementing board strategy through a team involving the
chief financial officer, general counsel, environmental and fuel
specialists and energy and emissions traders,
Monitoring legislative activity, weighing in directly with your
Congressional delegation and through industry associations,
Immediately initiating coordination discussions with your PUCs
and LDCs,
Evaluating costs and risks of internal mitigation options,
comparing internal costs with possible allowance prices: Are
fuel switching, modified dispatch order, end-use efficiency, new
nuclear and expanded power purchases effective options for
your organization?
Using holistic environmental management to integrate the carbon
strategy with your approach to renewable energy requirements
and other regulated pollutants,
Identifying possible upside opportunities from trading: new
revenue sources, strategic allowance and offset purchase
activities directed to enhance business relationships and your
local economy,
Developing emission-trading capabilities by establishing access
to relevant markets and building and testing internal procedures
for approving, processing and accounting for allowance trades,
Sep|Oct|2009
On the Net:
McKinsey site: http://mckinsey.com
Mantra Energy site: http://mantraenergy.com
Evaluating your options for selecting an optimal, historic

emission baseline from the range of allowed time periods,
Assessing the economics of carbon capture and sequestration
in light of potentially significant financial support from a final
legislative package,
Weighing the merits of gaining practical experience through
participation in voluntary initiatives such as the Carbon
Disclosure Project, CCE and EPAs Climate Leaders program,
Understanding the benefits and risks associated with buying
credits from existing early offset projects and emission-allowance
programs that can be converted into federal allowances, and
Working together with generators, LDCs and PUCs now to
understand and plan optimal implementation plans.
Federal greenhouse gas regulation is another in a long line of

business challenges faced by energy producers. It is yet another
challenge for businesses that have solved such daunting problems as
rural electrification, production of ever-cleaner fuels and the reduction
of SO2 and NOX emissions.
Energy industry leaders will use existing tools and innovate new
ones to provide cleaner energy in years to come while keeping energy
affordable. This issue is no longer in the distant future.
The time to learn how to manage, reduce and trade carbon is
now.
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Econamine FG PlusSM
CO2-Capture Technology
by Dennis W. Johnson; Satish Reddy, Ph.D.; Donald E. Broeils; and James H. Brown, PE, PMP, Fluor Corp.
Technology for removal of carbon dioxide from flue gas

streams was developed for use in the beverage industry. In
1989, Fluor Corp. purchased from Dow Chemical Co. the
license for a CO2-capture technology. Today, post-combustion
carbon capture is being considered as one of the technologies
to reduce carbon emissions at coal-fired power plants. This
represents challenges that impact many parts of modern power
plants and has created activity and investment in research.
The most significant challenges for coal applications are
approaches that reduce the requirements for process steam
and electrical power. Affordable carbon-capture technologies
with proven commercial experience will have the upper hand.
Benefits to power generators that might be required to capture carbon will be in future developments and a potentially
shorter scale-up timeline than other carbon-capture processes
such as oxy-fuel and pre-combustion.
Author
Dennis W. Johnson is senior director of process

specialty engineering,
power, at Fluor Corp.
Reach him at dennis.
johnson@fluor.com.
Donald E. Broeils is
vice president of plant
betterment services,
power, at Fluor Corp.
Econamine FG PlusSM Process Technology Background

The Econamine FG PlusSM technology is a proven technology of the carbon-capture industry. It is the first and most
widely applied process that has extensive demonstrated operating experience in the removal of CO2 from high oxygen
content flue gases (up to 15 volume percent). The flow diagram is similar to gas-treating processes, which have been
practiced for many years. Simple, reliable equipment that is
In all, Fluor has built more than 400 CO2capture

systems including gas-sweetening, hydrogen plants and
captured 365 short tons per day of food-grade CO2 from the
exhaust of the natural gas-fired power plant at the Bellingham (Mass.) Energy Center. Fluor designed and constructed
the plant and maintained continuous operation from 1991 to
2005 (see Figure 2). The experience gained from the design,
construction and more than 14 years of operation is used to
further advance the technology.
Enhancements to the CO2-Capture Technology

An advanced simulator has been developed to account for
mass transfer, heat transfer and reaction kinetics. This allows
computerized testing of new configurations and advancements
for further improvement. The Econamine FG PlusSM process
has been improved through solvent and process enhancements
to lower energy consumption and solvent loss. These
enhancements along with advanced features are incorporated
into the designs. The advanced features, most of which have
been proven commercially, include:
The solvent has been reformulated for greater CO2

carrying capacity (per solvent circulation rate), which
results in lower energy cost for the CO2 capture.
Absorber intercooling is used to optimize the temperature

profile in the absorber for kinetic and thermodynamic
(equilibrium) considerations.
Lean vapor compression reduces the energy demand of

regeneration.
Advanced reclaiming technologies minimize reagent

losses.
Energy demand integration with the power plant cycle

reduces the impact on the power plant.
Large tower design reduces capital costs and space.
Satish Reddy is fossil-fueled plants.

executive director
of carbon-capture
technologies at Fluor well-known to gas-treating operating personnel is used. FigCorp. Reach him at ure 1 shows a typical flow diagram. The technology does not
satish.reddy@fluor.com. require a custom-manufactured or expensive solvent. The
Figure 1: Econamine FG+SM Process Schematic

PRODUCT CO
ABSORBER VENT
D EM IN W A T ER M A K EU P
CW
CW
James H. Brown, PE,

PMP, is director of
engineering of the solid
fueled projects business
line, power, at Fluor
Corp. Reach him at
james.brown@fluor.com.
main ingredient is readily available, inexpensive and produced worldwide.

While many CO2-removal technologies are being researched through laboratory and pilot-scale testing, this
amine-based technology has a significant operating history
at commercial facilities collecting CO2 from multiple sources, including low CO2 concentration flue gas (less than 3.1
volume percent) with high oxygen concentrations (greater
than 13 volume percent). One of the most significant power
applications of this CO2-removal system was the plant that
CW
2 -S T A G E D C C
LP
LP
S TE A M
S YS T EM
S TE A M
FLUE GAS
FROM FGD
W A ST E T O
M A K EU P
D IS PO SA L
SO LV E N T
EX C E SS
SO D A A S H
W A TER
B LO W D OW N
N aO H
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This list serves as a menu of some options from which a customized plant design can be developed. Each CO2-removal application has unique site requirements, flue gas conditions and operating
parameters. Based on the given CO2-removal application, it might be
beneficial to implement only some of the enhancement features. In
this way, every plant will be optimized for its specific CO2-removal
application.
Provisions for addition of post-combustion CO2 capture can vary from

being cognizant of the requirements for the design to full integration
of the power, steam and cooling needs, as well as infrastructure for
CO2 transportation.
At a minimum, the analysis and early decisions concerning CO2
capture with particular emphasis on the commercial post-combustion,
carbon-capture technology should include in-depth analysis of the
permitting requirements, plant arrangement and integration into the
power plant (i.e., boiler, turbine, feedwater and condenser circuits,
etc., to limit the impact on the power production of the generator and
fully optimize the entire power generation system, carbon-capture
system or both) and access for operation and maintenance.
Even with the deployment of proven technologies with high
efficiency, pollutant-removal technologies, impurities in the flue
gasparticularly SOX, nitrogen dioxide (NO2), hydrogen chloride
(HCl) and hydrogen fluoride (HF)will lead to the formation of
heat-stable salt (HSS) in the carbon-capture systems.
The HSS must be converted back into the base solvent in a
reclaiming process. Fluor has assessed that it is often more costeffective to reduce HSS precursors before the flue gas encounters the
solvent.
Figure 2: Econamine Plant in Uthamaniyah, Saudi Arabia

Regenerator
26.5ft Diameter
The basic Econamine FG PlusSM technology has been

demonstrated on coal-fired flue gas on a 5 Te/d CO2-capture test
facility that processed a coal-fired flue gas for part of its limited test
run at a Tokyo Electric Power (TEPCO) plant in Kawasaki, Japan.
In addition to extensive development programs, E.ON Energie
AG is using the carbon-capture technology for a retrofitted demonstration plant that will commence operation in 2010 at E.ONs coal-fired
power plant in Wilhelmshaven, Germany. Econamine FG PlusSM advanced features will be incorporated into the demonstration plant that
Sep|Oct|2009
Of the 400 CO2 Fluor capture systems, there are more than 25
licensed plants worldwide that employ the Econamine FG PlusSM
Application at Coal-fired Power Plants
Absorber
25ft Diameter
is designed to recover 70 Te/d CO2 from the flue gas produced by the
Wilhelmshaven plant while processing 20,000 Nm3/h of power plant
flue gas at a CO2 capture rate of at least 90 percent of the CO2 contained in that gas. This will be the first time that the advanced features
of the Econamine FG PlusSM system are demonstrated on coal.
technology on flue gases from oil and gas turbine power plants to
steam-methane reformers.
Further ongoing enhancements of the technology occur through
select project applications. Numerous studies and proposals for applications have been completed for refineries, gas turbines and coal-fired
power plants. Active engagement in the increasing wave of activity for
potential implementation of CO2 capture to industry is essential. Table
1 shows a list of some of the studies and the range of potential application of post-combustion, carbon-capture systems for large and small
plants and natural gas and coal-fired applications. It also illustrates the
international concern for developing carbon-capture technologies.
Table 1: Selected Econamine FG PlusSM CO2-Capture Projects
Project
E.ON Energie coalfired
power plant demo
Gassnova Karsto CO2
FEED study
E.ON UK CO2 feasibility
coal plant feasibility study
10 units in Europe
SaskPower Boundary Dam
FEED study
Tenaska Trailblazer
technology evaluation
Completion
2010
July 2008
2007
1015
October 2009
Details
20,000 m3/hr in
Germany
420MW combined
cycle plant in Norway
300MW coal plant
350MW coal plant in US
Foodgrade (beverage) CO2
150MW coal plant
late 2009
900MW coal plant
January 2008
Econamine FG PlusSM technology is a proven, cost-effective

process for the removal of CO2 from low-pressure, oxygen-containing
flue gas streams. The commercial performance has been demonstrated
successfully for 20 years.
The consideration for integrating carbon capture into a power
plant requires careful analysis and decision-making beyond adding
space or capacity for electrical power and steam. These decisions can
play an important part in reducing the impact to the plant and improve
the economics of power production.
Important advances will reduce the steam and electric power
requirements. Early decisions concerning CO2 capture should include
in-depth analysis of the permitting requirements, plant arrangement
and integration into the power plant (i.e., boiler, turbine, feedwater and
condenser circuits, etc., to limit the impact on the power production
of the generator and fully optimize the entire power generation
system, carbon-capture system or both) and access for operation and
maintenance.
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Renewables
Solar Rising
s
Author
Robert Rogan is
eSolars senior vice
president of North
American markets.
Solar power is often offered as one of the most promising

forms of renewable energy. How effective can solar power
be, and how close is the solar power industry to being able to
deliver on the promise of the technology?
Solar energy is the least utilized source of energy, even
among other renewable energy sources such as wind and
geothermal, despite that worldwide concentrated solar power
(CSP) capacity is forecast to increase nearly 18-fold in the
next five years from its current 588-MW potential to around
10.5 GW. Amongst this tremendous potential to deliver
inexpensive, pervasive power at peak, adoption of solar power
has increased only in recent years.
To understand this slow pace of deployment, one needs
to look only at the perceived barriers to entry: The energy
is too expensive to deploy; the construction and permitting
process is too lengthy; and the investment needed to build
new transmission lines is too great.
In recent years, photovoltaic (PV) solar has had an
easier time integrating into our energy mix and avoiding these
barriers. Thin film PV panels are lower in cost and have been
used in utility-scale solar power, but their low efficiency leads
to higher installed system cost. Smaller PV solar installations
were easier to get off the ground at first. In contrast, CSP is
becoming more attractive for large-scale solar energy needs.
CSP is used as a utility-scale resource and can scale
economically. CSP is already the least expensive and most
efficient form of solar power for utility-scale providers in areas with favorable incentives and ample solar resources of
at least 2,000 kW per hour of
annual direct normal irradiation per square meter. In the
solar-rich, U.S. Southwest
on 63,000 square miles, more
than 1,100 quadrillion British
thermal units of solar radiation reach the earth each year.
Consequently, concentrating
solar thermal power stands to
make the biggest impact on
U.S. utilities power generation portfolios.
With solar subsidies in
place and increased consumer awareness of the benefits
of solar energy, there is finally the opportunity for solar to play a major role in the
United States power generation mix. We are seeing the
by Robert Rogan, eSolar

emergence of solar thermal companies that have seized old
industry challenges (cost, transmission lines, permitting) as
opportunities to forge transformative, disruptive solutions.
As the first tower CSP plants come online in the United
States in more than 20 years, which models will rise to the
top? Four central challenges face the industry that we at eSolar think will distinguish companies that can effectively deliver value to customers from those that cannot:
Price
Speed of deployment
Scalability, and
Grid impact.
Leading solar thermal companies understand this and
are moving to address these obstacles, thereby advancing the
industry.
Concentrating Solar Technologies

There are five main concentrating technologies: trough,
compact linear Fresnel reflector (CLFR), dish Stirling engine,
concentrating PV (CPV) and tower.
Trough technology. The trough is the most
mature concentrating solar technology with commercial
demonstrations since the 1980s and total installed capacity
of more than 550 MW. It uses a one-axis tracking system to
concentrate sunlight onto tubes, inside which synthetic oil
runs and then through a heat exchanger converts water into
steam that consequently goes through the steam turbine.
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The Team That Delivers
From Siting and Permitting to complete Engineering, Procurement,

Construction and Startup, our experienced team is ready to support all our
clients power needs.
Since 1946, CH2M HILL has been a global leader in engineering, construction
We take safety seriously
for our employees,
contractors and visitors,
and were pleased that
our High Bridge project is
achieving that goal.
David Wilks
President,
Xcel Energy Supply
and operations. By implementing innovative approaches throughout our

diverse portfolio of industries, we ensure cost savings, social responsibility,
and a safer work environment - for every client, on every project, every time.
CH2M HILL provides full service engineering, procurement, construction,
operations & maintenance, consulting, environmental, and program
management capabilities that span the entire energy value chain, including:
Solar, Wind, Geothermal, Alternative/Waste Fuels, and Traditional Power
Generation.
Delivering global power projects

with safe and innovative solutions
ataky200909.025
2009 CH2M HILL
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Renewables
The concentration level achieved by the optics system is low
because it uses single-axis tracking, hence the maximum temperature
achieved is low, driving down the efficiency of the plant. The main
advantage of this technology is its maturity. Its main disadvantage
is the relatively higher cost and, at times, limited supply of materials.
CLFR technolology. In CLFR technology, mirrors track the
sun and focus on a tube where synthetic oil gets heated and goes to
heat exchangers to produce steam, or direct steam generation can
take place directly in the tubes. Unlike in trough technology, the
tubes are fixed in place, but the tracking field is still one-dimensional
and the concentration level is low (thus having lower maximum
temperature and lower operating efficiency necessitating the use of
water cooling).
Stirling engine technology. The dish Stirling engine uses a
dual-axis tracking system in a tracking dish to focus the sunlight on a
Stirling engine. Each dish system produces between 10 to 25 kW and
is considered the highest efficiency solar thermal solution available.
This technology, however, foregoes some of the most established
benefits for concentrating solar thermal in utility-scale applications.
Practically, it offers minimal economies of scale for large-scale
projects, making it more suitable for distributed power applications
under 10 MW. The dish engine technology neither provides storage
nor can be used to hybridize a traditional steam power plant.
CPV technology. Another variation of concentrating solar energy
is CPV technology, in which light is concentrated on semiconductors
that convert light energy directly to electricity. Several companies
using high-efficiency solar cells adopted this concept recently.
Solar Systems of Australia uses mirrors to focus light on an array
of semiconductors, and the California-based Amonix system uses
Fresnel lenses to focus light on individual solar cells grouped in series
and parallel.
Tower technology. Tower technology uses either direct steam
generation or molten salt technology. Both approaches have been
demonstrated in Solar One in the 1980s and Solar Two (using molten
salt) in the 1990s in California. Today, however, there are only 35
MW of commercial installation worldwide. The latest demonstration
is Spains PS-10 and PS-20 projects. The tower system uses dualaxis tracking mirrors called heliostats to concentrate sunlight on a
central receiver atop a tower. Because of the dual-axis tracking,
higher temperatures can be achieved, hence higher efficiency. Tower
technology has the potential of being the lowest-cost. The PS-10
represents typical tower technology, which uses large mirrorseach
mirror is 120 square metersthat are mounted using poles that
are dug into the ground with large motors and drives to rotate the
heliostats and track the sun.
The eSolar Solution

eSolar developed its technology with the key hurdles to solar power
plant deployment in mind. eSolars approach, which starts with a
46-MW generating unit on 160 acres that can be replicated to scale
to more than 500 MW, was designed to meet the barriers to entry
while delivering a range of options to a variety of power producers,
from large utilities and power providers to smaller, regional
utilities. Uniform design and a smaller minimum footprint give the
company its competitive advantages in price, scalability and speed

and facilitate grid integration. Companies able to innovate around
existing deployment hurdles will be best positioned to serve utilities
by offering easily scalable, cost-effective solar technology.
The eSolar approach leverages prefabricated parts produced in
high volumes on pre-existing manufacturing lines, which can quickly
scale to meet future increase in demand, and therefore do not require
construction of new production facilities. Furthermore, prefabricated
parts can be easily assembled in the field with minimal labor and, with
the use of a proprietary system for heliostat calibration and tracking,
the overall capital cost of a plant as well as the cost of operations is
reduced further.
eSolar Case Study: Sierra SunTower

eSolars Sierra SunTower power plant in Lancaster, Calif.,
demonstrates a new blueprint for global solar deployment and is
the only operating CSP tower in the United States. The facility uses
24,000 mirrors across 20 acres, reflecting sunlight onto two thermal
receivers from which steam is directed through a refurbished 1947
GE turbine. Sierra SunTower provides 5 MW of clean, renewable
energy to some 4,000 Southern California Edison households.
The development is the first of many planned in the southwestern
United States for the company, which has signed power purchase
agreements totaling 429 MW with three utilities in California and
New Mexico.
During the 12 months of construction, the project created more
than 300 temporary jobs. In operation, Sierra SunTower employs 21
permanent staff and continues to contribute to the economic growth of
the local community and was commended by California Gov. Arnold
Schwarzenegger.
Californias energy and environmental leadership are advancing
carbon-free, cost-effective energy that can be used around the world,
Schwarzenegger said.
Further lessening the plants environmental impact, Sierra
SunTower is on private land. eSolars smaller footprint allows it to use
private land exclusively for the development of its plants, which in turn
mitigates the environmental concerns that come with development on
pristine desert land and permits the company to site its plants closer
to existing transmission lines.
As demonstrated by the flipping of the switch on eSolars Sierra
SunTower, the solar industry is gaining momentum and showing its
potential to be a leading contributor in the United States energy mix.
None of the technologies discussed are without their pros and cons,
but the way to move forward is to wholly understand the perceived
limitations and work with these barriers. Know when to forgo
expensive materials for improved technology; know how to improve
business processes to speed up production; understand the complexity
of permitting and siting and consider re-positioning.
With technologies already in place and strong public support, the
solar companies that move forward with the most innovative, flexible
and strategic blueprints will rise to the top. We look forward to our
bright solar futurea landscape dotted with unique models of solar
success and a freedom from fossil fuels.
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ELECTRIC LIGHT & POWER Executive Conference

March 21-22, 2010 Tampa Convention Center Tampa, Florida
The Electric Light and Power Executive Conference is an exclusive networking event where peer-to-peer
discussion about important industry issues related to the electric grid and energy efficiency can occur. This
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Renewables
Concentrating Solar Thermal

Energy and its Uses
a
Author
Roger Molina may be

reached at m8group@
gmail.com and
925-324-4773.
The worldwide solar energy industry has grown quickly

during the past few years and combined with research
and development has become competitive with modern
fossil fuel technologies in electric power and thermal
energy facilities.
Design of concentrating solar thermal (CST)
energy technology varies among companies, but the
objective is the same: Harness energy from the sun and
use it to convert water into steam energy for various
uses.
For example, one technology, heliostat, uses
mirrors that track the position of the sun for maximum
energy harvest, then radiates the concentrated energy
to a receiver, or boiler, installed on top of a support
structure 180 feet to 400 feet high, where water or
molten salt is heated to produce high-pressure, hightemperature steam. This is sometimes called tower
technology.
Other CST technologies use large mirrors called
troughs that transfer heat from the sun along a large
pipe containing water or oil to produce steam.
Depending on the industry application, the steam can
be used to generate electricity in a steam turbine generator,
provide mechanical power to drive rotating equipment or heat
by Roger Molina, P.E., The M8Group

Figure 1: Hybrid Nonreheat Cycle
Steam
Turbine
Generator
Receivers
Mirrors
Condenser
Concentrating
Solar Thermal
Energy Facility
Fuel
Back to
HRSG and
Receivers
Flue Gas
Fuel
Air
Heat-Recovery Steam
Generator (HRSG)
Combined-Cycle
Plant
Gas Turbine
Generator
fluids used in manufacturing.
Site Issues
CST installations, however, are not without serious challenges.

They require large land areas with high solar intensity like the
southwestern United States, Middle East,
Africa, India, southwestern China, Chile
and Australia.
In addition, a greenfield project is genConcentrating solar thermal technology would reduce fossil fuel use immedierally in a remote, isolated locationfar
ately by repowering or retrofitting existing plants with solar energy systems. from load centersthat lacks supporting
infrastructures such as electric transmission
lines, water supply systems, wastewater
These projects appear to be attractive investments because the infrastruc- treatment plants, roads and highways. These
infrastructures are expensive and when built
ture required to support a solar facility is already in place, reducing capital for dedicated use might make the undertaking impractical if the project scale is not
large enough to bear the external costs.
outlay while simplifying permitting and shortening construction.
Because of the large land area required
for construction, obtaining permits to
The integration of solar thermal energy systems to existing facilities also construct and operate is difficult, especially
for sites on pristine land. In California,
significantly reduces operating and maintenance costs, thus enhancing capi- permitting for large power projects might
take 24 months or longer before one could
shovel dirt at the site.
tal payoff.
Immediate Impact
CST uses encompass industries including
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Renewables
Figure 2: Hybrid Reheat Cycle
Steam Injection Options
Steam
Turbine
Generator
Receivers
Mirrors
Condenser
Concentrating
Solar Thermal
Energy Facility
Fuel
Back to
HRSG and
Receivers
Flue Gas
Fuel
Air
Heat-Recovery Steam
Generator (HRSG)
Combined-Cycle
Plant
Gas Turbine
Generator
electric power generation, oil extraction, chemical processes,

manufacturing and refineries. Countries with limited freshwater
resources for domestic use also could use solar thermal energy to
produce potable water through desalination.
This technology would reduce fossil fuel use immediately by
repowering or retrofitting existing plants with solar energy systems.
These projects appear to be attractive investments because the
infrastructure required to support a solar facility is already in place,
reducing capital outlay while simplifying permitting and shortening
construction.
The integration of solar thermal energy systems to existing
facilities also significantly reduces operating and maintenance costs,
thus enhancing capital payoff.
There are hundreds of simple-cycle (peaking units) and combinedcycle power plant installations representing opportunities for fast
deployment of CST energy facilities. Some plants were installed in
the 70s and 80s and are due for major overhaulsexcellent timing
for investigating the feasibility of using solar energy for repowering
steam turbine generators.
Figure 3: Desalination-Reverse Osmosis

Electric Power
Receivers
Condenser
High Pressure
Pump
R O Membranes
High
Pressure
Pump
Mirrors
Salt Water
Back to Receivers
Concentrating
Solar Thermal
Energy Facility
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Figure 4: Desalination-Distillation
Fuel
Boiler
Receivers
Product
Water
Steam Turbine
Generator
Mirrors
Concentrating
Solar Thermal
Energy Facility
Condenser
Salt Water
Feed
Evaporators
Reject
Condensate
Back to Boiler and
Receiver
The technology is also suitable for use in recovering oil from

tar sand, in thermal-enhanced oil recovery and in absorption cooling
systems.
Cloud Cover
Electric
Motor Drive
Steam Turbine
Generator
CSTs can supplement or replace fossil fuel used in duct-fired,

heat-recovery steam generators or as an additional steam supply
resource to the steam turbine for increased output during daytime
peak demand periods.
One project of this kind is the February 2009 bid solicitation
from the Sacramento Municipal Utility District to supply, by a thermal
energy (steam sales) purchase agreement, 200,000 #/hr of 700 Psig
and 675 F steam for injection into the steam system of the combinedcycle, 500-MW Cosumnes Power Plant. The plant was placed in
commercial operation in February 2006. Other power generating
facilities in the southwestern United States are being evaluated for
similar application using the concepts shown in Figures 1 and 2.
There are also numerous opportunities in industries where
thermal, mechanical and electrical energy are used extensively. As
an example, a steam turbine-driven high-pressure feed pump can
be installed for daytime operation to augment electric motor-driven
pumps in a desalination plant using RO Membrane technology (see
Figure 3) or provide a combination of electric power through the use
of backpressure turbine generator and thermal energy in a thermal
distillation process (see Figure 4).
Reject
Product
Water
The development of solar thermal facilities in the country will

accelerate once President Barack Obamas commitment to reduce
imported fossil fuel through renewable energy becomes a reality
with favorable new regulations or policies.
The worldwide financial woes, however, will take a long time to
turn around, and this dire situation combined with dropping natural
gas and oil prices have created difficulties in attracting money from
investors.
Construction of solar thermal energy facilities is inevitable. When
will private capital start flowing to support this fledgling business?
There are many unknowns in the equation amidst the economic
turmoil. We must wait to see how the situation will evolve.
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Big Solar, Small Footprint:

The Role Innovative Technologies
Play in our Energy Future
Meeting accelerating energy demands is always a challenge.

Meeting those demands in the best way for the environment,
and the economy is an even greater challenge.
The potential for solar energy, the most abundant renewable energy source in the world, in meeting all of these
challenges is great, yet it has barely been tapped as an energy
source. Why?
The Solar Landscape
Author
Nancy Hartsoch is
the vice president of
marketing at SolFocus
and chairwoman
and director of the
CPV Consortium. She
received a bachelors
degree and MBA from
San Jose State
University. Reach her
at nancy_hartsoch@
solfocus.com.
First, a quick look at the solar landscape is required for

perspective. Solar technology today can be broken into two
primary buckets.
One is concentrating solar power (CSP) or concentrating
solar thermal technology (CST). The technology, called by
both names, involves using lenses or mirrors and tracking
systems to focus a large area of sunlight into a small beam.
The concentrated light is then used as a heat source for a
conventional power plant.
This technology has matured and is becoming successful
for power generation typically at a large scale of 100-MW
plants or more. To be economic, the plants must be large, so
CSP is not a good fit for large-scale distributed generation.
by Nancy Hartsoch, SolFocus Inc.

Scalability of plant size is not economic, capital
investment to deploy a plant is high and it easily can take
four or more years for deployment including permitting,
construction, etc.
The plants require acres of flat land, which create large
footprints and significant environmental disruption around
the plants.
Most CSP technologies consume large amounts of water
in the production of electricity: 850 to 1,000 gallons per
megawatt hour produced.
Since CSP plants need high solar resource and large land
areas, they are targeted for areas such as deserts where water
shortage is a significant issue.
The second bucket is photovoltaic (PV) technology, in
which sunlight is converted directly into electricity using
types of solar cells.
PV technology has been critical in development of the
solar industry. New challenges facing the energy business
easily indicate that PV technology will be even more critical
in the future. As with any energy, the driver is cost: cents per
kilowatt hour.
For the PV industry to reach its growth potential, current
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Renewables
technologies like silicon PV and thin film must continue to evolve,
squeeze more energy from the cells and drive to lower cost.
But that alone wont take us far enough. There is a need for disruptive
technologies, which leverage existing technology but are more advanced
at providing benefits not achievable with current approaches.
The latest PV technology on the landscape is concentrator PV
(CPV), which is being deployed commercially and is proving its
ability to provide a new trajectory for efficiency improvements and
cost reductions.
In addition to the cost benefit, CPV meets other challenges
facing renewable energy, including distributed generation, optimized
land use, environmental sustainability and a strong roadmap to future
advancements. It is important to understand the technology before
looking for opportunities.
CPV
A CPV system converts light energy into electrical energy the way that
conventional PV technology does. The difference in the technologies
lies in the addition of an optical system that focuses a large area of
sunlight onto individual PV cells.
Also, the solar cells used in CPV systems are different from
silicon PV cells in their capability to convert large amounts of sunlight
into energy at high efficiency.
CPV systems may be thought of as telescopes trained on the
suns position and feeding the concentrated light to the cell.
Optics in a concentrator system are significantly less expensive
than the PV cell. The less cell area used per unit, the lower the overall
cost of the system.
High-efficiency PV cells and precision optics are the essential
building materials for all CPV technologies.
Optics. While there are multiple approaches to CPV systems,
SolFocus has selected reflective, nonimaging optics (customized,
precision mirrors) to collect and concentrate the suns energy (see
Figures 1 and 2).
Figure 1: How CPV Technology Works

Secondary Mirror
Solar Cell
Primary Mirror
Optical Rod
Figure 2: Cost Curve PV Technologies

30
Mean PV
Mean TF
CPV
25
20
15
10
5
0
2009
2010
2011
2012
CPV is on the fastest cost-reduction path. (Levelized cost of

energy encompasses all costs of ownership.) This example is in Phoenix.
A primary mirror collects direct sunlight and focuses the reflected

light onto a smaller, secondary mirror. The secondary mirror then
redirects the reflected light into a glass prism, channeling the sunlight
onto the PV chip. The result is a compact, efficient CPV system.
Another approach chosen by some manufacturers is the use of
refractive optics, which usually are plastic lenses through which the
suns light is focused. Regardless of the approach, the concept of
concentrating sunlight remains the same.
Multijunction PV cells. The photovoltaic cells used in highconcentration CPV systems differ from traditional, crystalline silicon
cells that make up traditional PV systems. CPV cells, known as
multijunction cells, provide energy conversion efficiencies of about
38 percent in contrast with the typical 12 to 17 percent of crystalline
silicon.
These cells are based on device technology used in space
applications since the early 1990s. Solar cell designs originally
built and rigorously tested for demanding space requirements have
been optimized for performance under a somewhat less-demanding,
terrestrial solar spectrum.
While these high-efficiency cells are too costly for use with
traditional PV, they are ideal for CPV systems where a large amount
of light (500 to 1,000 times) is collected and focused on a small
amount of solar cell material.
Dual-axis tracking. Because a CPV system is like a telescope,
each unit needs an unobstructed view of the sun and must actively
track the sun in its progression across the sky on two axes.
The technology will not respond well to light scattered by clouds
or reflected off other objects. CPV is most effective when deployed
during clear weather and lots of sunshine hours and in combination
with a precision sun-tracking mechanism.
The Path to Grid Parity

There is a lot of talk about solar at grid parity. While the industry
is getting closer, there is still a way to go. Ongoing technology
improvement, innovation and an industry appreciation for the support
required are needed to reach that point.
CPV might be the fastest path to that promised land.
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Low cost driven by high efficiency. There are two factors to
understand related to cost.
First is efficiency. The biggest impact on the cost of delivering
solar energy is system efficiency. CPV has the highest efficiency
levels: nearly twice that of most PV.
These efficiency levels are increasing steadily upward with
tremendous headroom before they begin to approach any theoretical
limits for the cell technology.
The second thing to understand is manufacturing costs. From a
volume manufacturing perspective, CPV is in its infancy. As volumes
accelerate, manufacturing costs come down rapidly as they have done
in automotive and electronics industries.
Also, CPV systems (using SolFocus CPV as the comparison)
typically have only 50 percent of manufacturing costs driven by
materials, whereas for PV, it is around 80 percent material costs. This
is another factor contributing to the rapid cost-reduction map for CPV
technology.
When you combine the increasing efficiency and decreasing
manufacturing costs, CPV leads the industry in its cost-of-energy
reduction potential. Also, there is an ability to ramp quickly with
CPV.
Because CPV systems use little, specialized PV material and
are built primarily from readily available materialsin the SolFocus
design, this is glass and aluminumsupply constraints are not an
issue.
CPV also has a much lower cap-ex requirement than other solar
technologies. This is an important element of rapidly building capacity
as the deployment of CPV systems moves from a projected 30 to 50
MW this year to gigawatts of capacity in the not-so-distant future.
High energy output. CPV will provide the highest energy
output per megawatt installed of any PV technology (see Figure 2).
When hot, silicon PV and thin film suffer temperature degradation
resulting in a much lower energy production as temperature rises.
On the contrary, the multijunction cells used in CPV systems do
not suffer from significant temperature degradation. Energy producers
get the highest energy output per megawatt installed with CPV.
Figure 3: CPV Provides Highest Panel Efficiency

35
Rated Efficiency, Percent
30
Best in Class CPV

Best in Class PV
Best in Class Thin Film

Typical PV
25
20
Also, CPV systems include dual-axis tracking, a requirement for

the technology.
This provides a consistent level of energy production throughout
the day, with energy production continuing to near sunset, supporting
peak demand requirements of the late afternoon and early evening.
Scalable. With the high energy yield from CPV, it is possible to
generate a lot of energy from less equipment than would otherwise
be possible.
Ideally suited to large-scale distributed generation in the 5- to
20-MW range, CPV is also appropriate for utility-scale deployments,
as well as smaller, industrial deployments of hundreds of kilowatts.
This flexibility allows for land use to be optimized and projects
to be laid out in irregular, available land areas. With the ability to scale
sites, energy deployment can be staged and matched to the demand
requirements of off-takers.
More to environment than just clean energy. All solar produces
clean energy, but not all solar provides the same environmental
impact. CPV has a better cradle-to-cradle footprint than other solar
technologies.
Because less PV material is used, CPV systems provide high
recyclability. For the mostly glass and aluminum SolFocus system, the
systems are 97 percent recyclable with no consumption of plastics.
CPV systems also offer an energy payback that is about 25 percent
of traditional PV. Being mounted on trackers instead of directly on the
ground, the systems disrupt less land than many technologies, and
dual use of the land is possible.
Sensitive environments are better protected because there is no
permanent shadowing, minimal land disruption and wildlife corridor
protection.
Flexible deployments allow projects to be cited on already
disrupted land, which typically speed permitting and project
deployment. CPV also uses water only for cleaning, with no water
consumption in electricity generation.
15
CPV Delivers Big Solar, Small Footprint
10
5
0
2008
2009
2010
2011
2012
This chart illustrates the upward trajectory for efficiency improvements with CPV
technology.
Source: Manufacturer-reported efficiencies from industry reports
CPV solutions are changing PVs in many ways. Deployment of groundmounted, utility-scale systems is growing dramatically. The cost of solar
energy in the fastest-growing solar markets is falling rapidly.
The environment benefits from clean energy created with a small
carbon footprint and environmental impact. Politicians, industrialists
and environmentalists talk of the new energy future. With industry
support of full commercialization and deployment, CPV will be a
critical element of that future.
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Energy Management
Energy Storage for System

Regulation: Why its
Becoming Important
c
Author
Richard Fioravanti is
director of Storage
Applications & Support at
KEMA Inc. Reach him at
800-892-2006 or visit
http://kema.com/pspm.
Carbon taxes or caps, higher oil and natural gas prices, worries
about oil availability and increased fuel switching are increasing the penetration of renewable generation resources into
our transmission and distribution networks. In the U.S., many
states are setting renewable portfolio standards to stimulate renewable energy adoption. As deployment of these generation
devices increase, many state and federal agencies, independent
system operators (ISOs) and utilities are examining their impacts on the electricity grid and weighing options to ensure
continued reliability. The additional volatility introduced to the
grid by renewables might require a greater need for regulation
services to balance network load and generated power.
Fast-response, high-performance, energy storage systems
have been attracting considerable interest as a means to mitigate these issues. The use of storage for frequency regulation
can improve electric grid system reliability, efficiency and
flexibility. In ISO environments, they represent a new option
for grid operators, as well as a potential revenue opportunity
for operators of the storage devices.
In considering such systems, complex questions must be
addressed:
What capacity and duration (energy-to-power capacity
ratio) is needed for storage devices to respond to persistent calls for regulation service in each direction?
How will large amounts of storage impact overall system
performance?
Can automatic generation control algorithms be designed
to take advantage of the fast-acting capabilities of the
emerging storage technologies?
Are high-performance energy storage systems more effective than conventional generation resources in meeting
regulation service requirements?
In 2008, AES Corp. engaged KEMAa global energy

and utility consulting, testing and certification firmto examine the use of high-performance energy storage systems for
regulation. Three representative ISO environments were simulated and included automatic generation control systems and
real-time market conditions. The study yielded key findings:
A fast-response storage device with an appropriate duration is at least as effective as conventional generation for
regulating services. In some cases, it might be more effective, megawatt for megawatt. When the same amount
of regulation is provided by a storage device, there are
decreased area control errors. Storage devices with very
by Richard Fioravanti, KEMA
low durations (energy-to-power ratios of less than 12 minutes) might be unsuitable, depending upon a particular
systems area control area characteristics. By decreasing
dependence on traditional generation units, there might
be added benefits, such as reducing system maintenance
costs and adverse emission effects.
The effectiveness of a storage device increases if the automatic generation control unit is adapted to take advantage
of a fast-response device so that it also needs to be repaid
to restore its energy levels within a finite period. The area
control error improves, and more important, the ability to
use a storage device shortens durations, resulting in lower
regulation service costs.
A storage device responding to a filtered area control error signal is more effective than conventional generation
at providing automatic generation control regulation,
in terms of system area control error performance. This
strongly implies that a lesser amount of regulation can
be procured using storage vs. conventional resources and
used as the primary resource for responding to area control error.
The economics of a storage device are favorable at todays
price levels for regulation and real-time energy purposes.
The overall cost-effectiveness of a storage device for regulation also depends on capital costs, which vary among
technologies. These costs should come down over time.
Two of the most common, fast-response energy storage systems include advanced batteries and flywheels. Compressed-air
energy storage (CAES), though not considered a fast-response
system, is gaining popularity because of its ability to scale for
larger implementations. The available technologies vary in capital costs, production costs, capacity, energy density, power and
energy ratings, cycle life and efficiency. But they all can enhance
the stability and quality of electricity networks.
A battery storage system can be desirable because it offers
relatively high efficiency as high as 90 percent or better. Technologies range from lithium-ion, advanced lead-acid and flow
batteries such as sodium sulfur and zinc bromine. Batteries offer
high capacity and independent power and energy ratings. For
small-scale electricity storage, the redox (reduction oxidation)
flow battery provides an interesting alternative.
A flywheel energy storage system rotates a disk at a high
speed and retains the energy by slowing down the flywheel.
The kinetic energy of the disk is stored as electricity. Flywheel
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Energy Management
interest is increasing because they can charge and discharge power
quickly. Studies have shown that advanced storage technologies for
regulation can result in lower carbon dioxide, sulfur dioxide and
nitrogen oxide emissions when compared with traditional storage
systems. When maintenance, operation and equipment lifetime
costs are compared against those for traditional fossil fuel-based
power technologies, flywheel technology has been shown to deliver
regulation services at the lowest cost.
A CAES system involves the use of renewably generated or
off-peak electricity to compress air. When electricity demand later
peaks, the compressed airoften stored in a coal mineis heated
with natural gas and goes through turbo expanders to generate
electricity. A compressed-air system can have great graphical impact
for implementations of more than 100 MW.
Another option is being explored: a North Sea energy island.
This man-made island would store power from an offshore wind
farm. The concept is the initial result of an ongoing KEMA feasibility
study with the civil engineering firm Bureau Lievense and technology
illustrators Rudolph and Robert Das for Dutch energy companies. The
design incorporates an inverse offshore pump accumulation station.
On the island when there is a surplus of wind energy, the excess would
be used to pump sea water out of the interior subsurface lake into the
surrounding sea. Upon a wind shortage, sea water would flow back
into the interior lake through commercially available generators to
produce energy. The pump station would be stationed on an artificial

island off the Dutch coast in the North Sea and comprised of a ring
of dikes surrounding a 50-meter-deep reservoir. The island would be
built from materials dredged to deepen the interior reservoir.
The proposed storage system would have a maximum generation
capacity of 1,500 MW, depending on water level, and an annual
storage capacity of more than 20 GWHenough energy to offset
500 to 840 kilotons of CO2 emissions. The costs and benefits of
additional regulating reserve, download wind power, CO2 reduction
and environmental impacts are being analyzed.
The energy island concept has the potential to provide coastal
protection, harbor and or LNG terminal facilities, aquatic biomass
and eco-tourism opportunities.
It is inefficient to keep large-scale power plants in standby mode
to handle energy fluctuations when storage alternatives can provide a
large added value. These fluctuations are increasing as we use more
distributed resources and add more variable energy sources to the mix.
Storing electricity increases the technical reliability of energy
supplies, stabilizes the cost price of electricity and contributes to the
reduction of CO2 emissions, especially when combined with the wind
or other renewable energy resources. Investment in large-scale energy
storage can increase the efficiency and reliability of conventional
power plants, as well as offset investments in replacing or developing
new conventional peak-production capacity.
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Energy Management
Outage Management
and Customer Relationships
a
Author
Guerry Waters is vice

president of industry
strategy with the Oracle
Utilities Global Business
Unit. He joined the
Oracle Utilities Global
Business Unit in 2000.
His previous positions
include vice president
of energy information
strategy at META Group
(now Gartner) and
CTO and director of
technology strategy
and engineering
at Southern Co.
A recent poll by analyst firm Sierra Energy Group asked

utility executives to name the applications they viewed as the
most important systems for the successful implementation of
a smart grid.
Responses included outage management, supervisory
control and data acquisition (SCADA), automatic meter
reading (AMR), advanced metering infrastructure (AMI) and
meter data management.
These grid- and meter-related applications are necessary,
but where are the customers?
The smart grid is not simply about sensors and meters; it
is about increasing the efficiency of electricity use, reducing
peaks and minimizing costs.
None is possible without active cooperation from those
who use the system.
Unless we place customers at the center of the smart
grid, all we have is infrastructure.
But lets take a second look at the key smart grid
applications Sierra Energy Group identified.
Customers may not be as invisible as they initially
appear.
One easily could argue that outage management has,
in the past decade, become an active link between grids and
individual customers that provides an outstanding precursor
to the workings of a future smart grid.
The 20th Century Customer, Grid Link

Throughout the 20th century, grid managers regularly
responded to the individual needs of the largest commercial
and industrial customers.
Because of their size and power profile, individual
large customerscrucial to a communitys economycould
request and receive grid extensions, advanced equipment or
special distribution considerations.
The key account manager played an important role
in bringing utility engineering resources to bear on large
customers unique problems.
But cooperation was far from one-way. Large customers
regularly helped grid engineers solve emerging problems
or emergencies by, for instance, changing start-up hours or
turning to on-site generation to ease peak usage.
With rare exceptions for the homes of people with
life-and-death power needs, however, grid managers could
not afford the time to respond to the needs of individual
residential customers.
Nor was there much need to. Just keeping the power on
was good enough for residential and small business customers.
by Guerry Waters, Oracle Utilities

It is not surprising, then, that within the utility, organizational
boundaries largely separated grid engineers from the business
people handling call centers and residential billing.
The two groups spent most of their professional lives
with only superficial knowledge of each others activities.
Lack of Communication Equals Lack of Satisfaction

By the mid-1990s, many utilities recognized that the divide
between residential customers and grid managers was
becoming increasingly dysfunctional.
Complaints about the frequency and duration of outages
created serious issues for utilities and their regulators.
An example is Northern Ireland Electricity (NIE), where
hurricane-force winds on the day after Christmas 1998 created
damage more extensive than the utility had ever seen: 4,000
faults and more than 160,000 customers without electricity.
Most customers were back online within 24 hours, but some
remained without power until New Years Day.
Exacerbating the situation were customer difficulties in
contacting NIE. High call volume overwhelmed the contact
center, and even when customers got through, call handlers
had little information on restoration times.
The Christmas-to-New Years power outages resulted in
personal hardship and millions of pounds of economic losses
to the region.
Just as troubling were customer perceptions that NIE
provided inaccurate and inconsistent information.
Public confidence in the utility sank, and a storm of
negative publicity erupted.
Outage Management Equals Outage Communication

To solve these problems, NIE put customer concerns at the
heart of its implementation of a new outage management
system. The utility implemented:
Customer call analysis. This resulted in better predictions
of the location, cause and extent of outages,
Primary and contingency call-handling systems to
handle 7,000 calls per hour,
Direct call-system access to the outage management
system. This enabled outage management to respond
to customers immediately with updated and accurate
information, including predicted restoration times, and
Restoration prioritization based on safety, critical
customer needs and customer standards.
These and other outage management improvements
resulted in a 30 percent drop in customer minutes lost and
Sep|Oct|2009
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Energy Management
system payback within five years. Equally important was a strong
resurgence in public trust.
Just four years after the 1998 disaster, a government report
showed that NIEs customer service performance was better than
the aggregated performance of electricity companies in Great Britain
when compared against each of the eleven Guaranteed Standards.
Complaints fell 58 percent to 25 in one year. And the annual
complaint rate3.5 per 100,000 tariff customersbeat the average
for British companies (84 complaints per 100,000 customers).
Complaints fell further the following year.
That NIE should only have 17 official complaints recorded
against it from a customer base of 720,000 is a credit to all the staff at
NIE in its role as Northern Irelands public electricity supplier, said
Gerry Donnelly, then head of consumer affairs at the U.K.s Office of
Electricity Regulation (Ofreg). The excellent approach to customer
service over the past number of years has seen complaints decline
rapidly, making NIE one of the best customer-facing electricity
companies in the United Kingdom.
Such lessons have not been lost on other utilities. Nova Scotia
Power, for instance, has ensured that its outage management system
can handle up to 13,000 calls per hour3 percent of its entire
customer base.
Hawaiian Electrics use of customer communication from its
outage management system has halved its number of incoming calls
during outages.
Positive stories abound.
New Technologies
Moving communication from inbound callers to all outage-affected
customers has evolved as a second wave in better customer and grid
interaction.
Between 2004 and 2006, the number of utilities using outbound
outage calls more than tripled from 9 to 30 percent, according to
research firm Chartwell.
Next, many utilities are moving outage communication to the Web
by displaying outage maps. Doing so initially seemed counterintuitive
given the suspicion that few people experiencing power outages could
access the Internet.
Today, however, an increasing number of mobile phones and
similar devices can provide access even when power is out in the
immediate vicinity.
Utilities that have taken this step generally report that displaying
outage maps reduces call center volume. It also improves relationships
with the media by giving all news outlets equaland equally up-todateinformation they can report.
Broadening outage communication is not without problems, of
course. Utilities report grappling with such issues as:
When should reporting start? A fallen tree that eliminates power
at a mountain vacation home scarcely seems worthy of an
Internet map. What about 500 residences in Chicago? Or 500
residences in a town of 700?
How frequently should information be updated? Every hour?
That is probably too little. Every minute? Probably too much.
Somewhere, there is a happy medium.
Sep|Oct|2009
How detailed should maps and related information be? If we give

a homeowner at work information about her own residence, how
do we deny it to a thief searching for potentially nonworking
burglar alarms? What is the right level of information for police?
For adult children needing information on aging parents? For
the mayor? To what extent should we be influenced by studies
like a 2007 J.D. Power and Associates survey of Canadian utility
customers that found that, using a 1,000-point scale, overall
satisfaction was 55 points higher for customers who received at
least four items of information about outages than for customers
receiving only one?
Should utilities include the causes of outagessomething
customers frequently want to knowor might that lead to
unwanted sightseers at sites of accidents or fires?
Will outage displays and estimated restoration times create legal
issues if they prove inaccurate?
Those questions can become more complex as utilities link

outage management and customers through messaging systems like
e-mail and Short Message Service (SMS). Under what conditions do
customers want outage messages? Should messages be individual or
general? How frequently should messages be updated?
Leading Toward the Smart Grid

We should applaud executives who have identified outage
management as a key application in the move toward the smart grid.
Implementing outage management and using it to link small business
and residential customers with outage issues paves the way toward
increased customer and grid interactions.
Displaying outage maps on the Internet, for instance, gives
utilities significant experience in using public Web sites to
communicate information with specific impact on individuals.
It is also a forum through which grid managers and customer
service staff can work toward mutual understandings about
what information is available, in what detail and how often it
changes.
Grappling with privacy and safety issues that stem from outage
map display can lead to an initial step toward limited-access
and individualized customer Web portals. Advertising portal
availability and logging customer response can be an initial
indication of what efforts might be needed before customers
will use smart grid information displayed on a Web portal for
purposes like energy conservation.
Moving to e-mail and SMS outage notification helps utilities
overcome address collection, storage and updating requirements
needed for electronic communications that reach their intended
destinations.
Utilities ability to communicate grid managers concerns to
customers and vice versa will determine the outcome of smart grid
programs.
An updated, robust outage management system built with
customers as a central concern is an ideal starting point for linking
groups that will be key to smart grid success.
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IT/CIS & CRM
Retreive That Data

and Make IT Snappy!
Gathering data from multiple sources and storing it in several

places to which one human holds the key is about as pass as
licking stamps for paper billing.
Information technology (IT) is making it easy for
utilities to get quicker access to better information than they
even knew they had. Utilities across the nation already sit on
generation, transmission and distribution data gold mines,
and the coming smart grid is pushing them to grab that good
stuff and store it for accessibility. Smart grid data retrieval
must be seamless, secure and snappy.
A Utility Perspective
We needed a centralized system, said Catherine Powers,
vice president of forecasting and member services at Old
Dominion Electric Cooperative (ODEC) in Glen Allen, Va.
We had an old legacy billing system that we realized needed
to be moved into the 21st century.
It took almost a year to the dayJune 1, 2008, to June
1, 2009for ODEC to evaluate its meter data management
(MDM) and billing needs, select a vendor and go live.
Similar stories can be told as many times as there are
utilities. ODEC executives realized its problemthat it
needed one version of the truthabout two years ago, Powers
said.
The generation and transmission cooperative is owned by
11 cooperatives in the PJM power load, and it gets meter data
from a variety of sources. Members own and operate some
400,000 meters serving about 1 million member-owners in
Delaware, Maryland, Virginia and North Carolina. Retrieving
that data then translating it into something comprehensible
were labor-intensive, physical chores, Powers said.
Historically, I would talk to Tom, and he would go to a
file cabinet and add numbers, she said. Weve never really
had data available.
Or was it simply unreachable? Tom Chamberlin works
as ODECs MDM and billing project lead. The cooperatives
small staffit hovers around 100 employeesmeant one
employees absence could create numerous potential hold
ups.
For example, if Chamberlin were to treat the family to
a weeklong vacation, he might be welcomed back by coworkers forming a line at his desk. If he were sick, they could
take a number, and if he were to take a long lunch, getting
dessert to go might be a good idea.
After Chamberlin had performed his calculations, hed
heave over the results in overwhelming mounds of paper,
Powers said.
by Kristen Wright, associate editor

There were a variety of different people doing a variety
of different functions with that hourly interval data, she said.
We kind of wanted to get process efficiencies so we werent
held up because we couldnt get to a resource.
ODEC had had enough. It formed a team that selected
roughly 10 possible MDM and billing vendors, which were
whittled down to five, then three that used actual ODEC
data to perform daylong demonstrations, said Anne Spanos,
ODEC project manager. After numerous presentations, the
team evaluated each vendor and added up scores to determine
which would work best for ODEC.
Spanos, Powers and Chamberlin were involved from
the beginning of ODECs project and attended meetings each
day, Chamberlin said.
We recognized the relationship between meters and
how accounts were set up, and billable accounts and those
for informational purposes, he said. It was understanding
the application and helping it evolve from out-of-the-box
software. We knew what the expectation was, what it was
supposed to do.
Months were devoted solely to understanding ODECs
needs. The team rated one vendor tops for its MDM and
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IT/CIS & CRM

billing applications, Chamberlin said. It got
both jobs.
When we made the choice with Oracle,
they tried to conceptualize our business needs
that were different than the off-the-shelf
application they had established, he said.
Putting much of the effort up-front
saved money, time and questions when it
was time to design and program the systems,
Chamberlin said.
Oracle presented the best solution that
was the best fit for us currently and for what
would unfold down the road, he said. Its
certainly a green solution. We havent yet
produced the first invoice on paper. Its all
electronically shared.
Its a welcome departure from the large,
multiple-page invoices ODEC used to print
after Chamberlin went to his file cabinet and
crunched the numbers. Whats more, the new
application does a much better job separating
and consolidating information into a form
employees easily recognize and understand.
The
out-of-the-box,
off-the-shelf
application enables engineers, for example,
to obtain only the engineering-related
information they seek. Many ODEC
employees can use the easily obtainable,
consolidated information, Chamberlin said.
One of the big sellers for the ODEC
team was the systems functionality and
ability to manipulate conditions such as rate
structures. The team and management liked
the idea of having a data central repository
and the subsequent possibilities so much
that the project wasnt postponed during
the economic downturn that sidelined many
projects of other U.S. utilities, Chamberlin
said.
Its a key application, and once we
committed to it, the wheels were spinning
such that we were designing or anticipating
the use of that database to support other
functions, Chamberlin said. It was not to
be pulled because of economic downturns.
I think were all very happy with the
product. We can do more things with it. We
can present it at a greater detail. You get
your feet wet and discover if all the bells
and whistles you contemplated are working.
So on the happy scale of one to 10, were
probably nine-point-something.
After four months of live success,
Powers agrees. Adjustments may be made
Sep|Oct|2009
after the billing cycle, and now employees

know which version of a bill is most current,
she said.
I am overjoyedand thats an
understatementwith what I can get with
this system, she said.
ODEC will continue training its
employees on the Oracle system twice a year
to ensure everyone knows what he or she is
doing and that he or she is pulling the right
information, Powers said.
One of the big sellers for the ODEC team

was the systems functionality and ability
to manipulate conditions such as rate
structures. The team and management
liked the idea of having a data central
repository and the subsequent possibilities so much that the project wasnt
postponed during the economic downturn
that sidelined many projects of other U.S.
utilities.
A Vendor Perspective
A Canadian, next-generation billing company
says the it word or phrase of 2010 will be
software as a service (SAAS), at least in
the utility world. Remember it, because its
already a big deal in other industries and dayto-day lifepeople just dont realize theyre
already using it.
If people are familiar with Yahoo Mail,
thats software as a service, said Frank
Hoogendoorn, Cognera Corp.s co-founder
and executive vice president of business
solutions. You can log on and use that
service. For a lot of people, its free, but you
can pay for an upgrade.
The SAAS poster child is salesforce.
com, he said. Its the leader in customer
relationship management and cloud
computing. As with Yahoo Mail, people

might have have had SAAS experiences
without realizing it.
Customers, according to salesforce.
com, include CNN, Starbucks, Siemens, Dell,
Hotwire, The Wall Street Journal, Google,
Kaiser Permanente and E Trade Financial.
In the utility sector, outsourcing has been
a four-letter word with negative connotations,
he said.
On the concept of a hosted solution,
utilities tend to be more traditional and
conservative, and theyve been more
suspicious, he said. We do a lot of
education. It doesnt mean a loss of control
or a loss of jobs. It can be more secure.
A hosted solution such as SAAS enables
a redundancy in a backup, Hoogendoorn said.
Instead of simply selling sofware licenses, the
company makes billing information available
online to clients, usually through monthly
subscriptions.
For employees, the Cognera solution
keeps jobs at the utilities, Hoogendoorn
said. Were not oursourced; we empower
the utilities to better serve the clients.
Utilities capitalize by using their existing
systems, and they dont have to worry about
IT infrastructure and paying extra staff, he
said.
For customers, you get the benefit of
that service and use of that data to give you a
lower energy bill, he said.
Headquartered in Calgary, Alberta,
Cognera provides billing solutions such as
CIS/CRM applications, said Chris Lewis, the
companys sales and marketing manager.
Were interested in the relationships
utilities have with their customers, Lewis
said. We improve that billing process and
eliminate those costly billing errors. We
utilize business intelligence tools, which are
great for energy conservation and greening.
Lewis said after a company subscribes
to the service, its a simple solution.
You connect into our database with an
Internet connection, he said. All the utilities
regular customer service people can see it from
their computers.
Training usally takes a couple of days,
with the longest training session running about
a week for call center staff.
Among Cogneras Canadian energy
clients are ENMAX Corp. and Nexen Inc.
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The Smart Way to Protect the Grid

From Cybersecurity Threat
p
Author
David Owens is
executive vice
president of Edison
Electric Institute.
Protecting the nations electric grid is a top priority for

utilities. Traditionally, this has meant guarding against
primarily weather-related outages. With the move toward
the smart grid, where utilities use the Internet or phone lines
instead of internal networks to control their electric systems,
we have broadened our mission to include protecting against
potential cyberattacks.
The electric power industry uses various strategies to
protect our computerized systems. With cybersecurity threats
continuing to evolve and our cyberadversaries likely to
become more sophisticated, we welcome the effort underway
in Congress to give the federal government legal authority to
deal with imminent or actual cyberattacks.
This new legislation, though, should be limited to
emergencies where there is a need to act quickly to counter
a national security or public welfare concern. And this new
authority should complementnot supplementthe effective
process now in place to ensure a reliable grid.
Current law provides the means to address routine, nonemergency cybersecurity issues. Congress enacted these and
other measures as part of the Energy Policy Act of 2005. New
reliability standards are developed as needed through the
North American Electric Reliability Corp. (NERC), which
uses a stakeholder process that involves the owners, users and
operators of the North American electric grid. Once a standard
is developed, NERC submits it to the Federal Energy Regulatory Commission (FERC) for review. If approved, the standard
becomes legally binding and enforceable in the United States.
We recognize that, although comprehensive, this process
is not suited for creating standards to address cybersecurity
issues that rise to the level of a national security emergency
requiring immediate attention. Rather than creating broad
new federal regulatory mandates, we urge Congress to draft
legislation that specifically addresses only those cybersecurity
threats that the president or secretary of energy deems serious
enough to merit special federal emergency authority to protect
the countrys bulk power system.
Once a federal emergency order has been issued, a sole
federal agency should be given the authority to address it.
This will eliminate confusion and possible overlapping or
conflicting authority or orders.
This authority also should be limited to the bulk power
system as defined in Section 215 of the Federal Power
Act. Extending emergency authority broadly to include
all distribution systems, as well as systems outside the
contiguous 48 states, will significantly complicate writing
clear, unambiguous orders given the tremendous diversity
by David Owens, Edison Electric Institute

of assets, entities and operating conditions that must be
considered in crafting such an emergency order.
In addition, the focus of the legislation should be the
unique nature of a cyberthreat and not a physical security
threat. The latter is more than adequately covered by existing
law enforcement authorities with whom utilities already work.
Finally, any emergency order issued by the federal
government should sunset after 90 days or when the measures
to respond to a particular threat have been replaced by a
standard developed through NERC processes.
Even with well-crafted legislation that gives the federal
government emergency authority to deal with cybersecurity
threats, protecting the grid against cyberattacks will demand
other measures. One is a closer working relationship between
the electric utility industry and governmental agencies that
have the best access to intelligence about cyberthreats to
electric utility systems. EEI and its member companies already
have been working with governmental agenciesthe national
laboratories, the FBI, Department of Homeland Security,
Department of Energy, the Office of the Director of National
Intelligence and FERC. We welcome more coordination and
information exchange with these agencies.
Another protection against cyberthreats is ensuring that
equipment manufacturers adequately fulfill their security
responsibilities. With more digital electronic devices and
communication systems being introduced to serve the grid,
it is vital that suppliers adopt security practices in their
organizations, build security into their products and establish
programs that can inform utilities about new vulnerabilities
as they are discovered, as well as provide technical assistance
with solving them.
Toward these goals, we support the process underway at
the National Institute of Standards and Technology to develop
a framework of equipment standards that will become the
foundation of a secure, interoperable smart grid. We also
encourage development of a security certification program
that would independently test smart grid components
and systems and certify that they pass security tests. This
certification process would help utilities select only those
systems that provide appropriate cybersecurity.
The smart grid promises a transformation in the way
electric power is transmitted, distributed and consumed. Electric utilities, their customers and the planet stand to benefit as
a result. Making sure we have the proper cyber safeguards will
enhance the opportunity for us to realize those benefits.
On the Net: EEI site: http://eei.org
Sep|Oct|2009
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CS Week
Planning for Another
Challenging Year
Late last summer when the presidential campaign and subprime mortgages were top-ofmind issues for most Americans, the CS Week Executive Advisory Panel (EAP) recognized
that a slowing of the economy they had detected would impact CS Week, as well.
These leaders in products and consulting services serving the meter-to-cash utility
industry consciously added even more value, pertinence and immediacy to the content of the
workshops they were suggesting to the CS Week board of directors.
Recognizing that a slowdown would pinch utilities travel and education budgets, CS Week had to give
prospective attendees solid justification to attendand even more to learn.
Next year also will require proven return for utilities to spend even scarcer education dollars. Our
vendors benefited this year from the number of attendees who justified their trips visiting exhibitors as they
searched for solutions.
Top speakers and meaningful presentations are the heart of every venue at CS Week. The annual Call
for Presentations 2010 has gone out. We encourage each reader to consider speaking at CS Week next year
in Nashville, Tenn.
Further information is available at http://csweek.org. Click on Call for Presentations on the home
page.
CS Week has reconfigured the Customer Experience Lifecycle again to incorporate the significant
changes in meter-to-cash and the larger utility world, this time adding a smart grid track.
The functionality and programs of energy efficiency and conservation are well incorporated under the
smart grid functional track.
AMI and MDM remain distinct tracks in the meter-to-cash life cycle.
CS Week originated 34 years ago as CIS Conference and focused on customer billing and closely related
functions. CS Week 2010 will mark our fourth year as a comprehensive educational forum serving the breadth
of meter-to-cash utility services.
It is fascinating to watch the advent of new players in the smart metering environment. Who could
have predicted that Google, Microsoft and Cisco Systems would extend their business services to gather
information from end users to help consumers manage their energy usage and costs?
This was undreamed of as an option even two years ago. Consumers are not tied to utilities anymore for
generation or utility management. Smart utilities, meters and homes are spreading as buildings and appliances
become profoundly more efficient.
What is your utility doing to train customer service representatives (CSRs) for the ever-changing calls
they receive? Do they have to transfer callers for answers, and what does that do to customer satisfaction?
As the frontline in utility customer service, they merit fresh training on these new questions and
answers. The return on investment begins when CSRs dont have to transfer calls but can answer customers
questions.
Jerry Duvall, CEO, CS Week
Sep|Oct|2009
For more information, please visit www.csweek.org
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Investment in New Transmission

Projects Remains Strong
by Thomas F. Garrity, Siemens
Despite lingering effects of the economic recession, investment

in transmission projects for grid reliability, congestion relief
and the integration of new and cleaner generation sources has
continued with only a modest slowdown in projects.
The evolution of smart grid technology for the U.S.
power systems represents a significant opportunity to relieve
congestion on the bulk power supply network. Eliminating or
reducing congestion can facilitate the integration of renewable
generation, such as wind and solar, and allow greater access
to cleaner, lower-emission generation sources.
Siemens Energy Inc.s U.S. energy transmission projects
are rapidly progressing with construction. Two examples in
various stages of construction are San Franciscos Trans Bay
Cable Project and the Static VAR Compensator Project near
Chicago.
Trans Bay Cable Project
Author
Thomas F. Garrity is
vice president and
senior consultant
of high-voltage
systems at Siemens.
The Trans Bay Cable Project comprises a high-voltage direct

current (HVDC) connection between HVDC converter
stations in Pittsburg, Calif., and San Francisco (see Figure
1). The contract was awarded by Trans Bay Cable LLC, the
owner, to the Trans Bay Cable consortium of Siemens Energy
Inc. and Prysmian Construction Services Inc. The Trans Bay
Cable link is designed to transmit 400 MW of power between
Pittsburgh and San Francisco at a transmission voltage of +/200 kV. The transmission link is a 53-mile-long HVDC cable
for the land and underwater portions of the connection, with
most of the cable underwater.
In addition to providing access to an additional power
Figure 1: Transmission route for HVDC
submarine cable across San Francisco Bay
source for San Francisco, the smart HVDC Power Link Universal System (PLUS) technology for the transmission link
will supply reactive power support for enhanced voltage control to the Pacific Gas & Electric Co. grid. The innovative
voltage source converters will provide +/- 145 MVAR of reactive power at Pittsburgh and +/- 170 MVAR at the Potrero
Converter Station in San Francisco. The voltage support capability of the HVDC PLUS technology is an example of the
Siemens smart grid control for enhancing grid performance.
The voltage source converters at the heart of the HVDC
PLUS solution employ insulated gate bipolar transistors
(IGBT) semiconductor devices configured in a modular
multilevel converter (MMC), which provides many switching
steps to reduce harmonics, minimize losses and reduce highfrequency noise. The multilevel converter design virtually
can eliminate the need for alternating current (ac) harmonic
filters in most cases, thereby contributing to significant space
savings. Another advantage of the design allows the use of
standard ac transformers.
Converter station construction is progressing, and the
submarine cable will be laid this fall to achieve the March
2010 service date. The commissioning phase and system
and transmission tests are scheduled to be complete by
February 2010. Figure 2 shows progress on the Pittsburgh
converter station.
The underground segment of the HVDC cable terminations have been completed at the Pittsburgh Converter Station, and the location of the cables in the direct current (dc)
switchyard is shown in Figure 3. These cables will connect
to the submarine cable portion of the dc link to complete the
Figure 2: Air core reactors installed in the ac switchyard at Pittsburgh, Calif.,
with the valve hall in the background
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Figure 5: DC cable terminations at the Potrero Converter Station
Figure 3: DC cable terminations in the Pittsburgh Converter Station; DC wall bushings

installed at the valve
transmission path between Pittsburgh and Potrero (see Figure 4). The
submarine cable is scheduled to be installed in October-November using a special cable-laying vessel designed for this purpose. The submarine cable is manufactured in one continuous length for each pole that
will span the entire length of the bay.
Figure 6: Transformers at Potrero

with residences in background
Figure 4: Hi pot testing of the ac cables at the Potrero Converter Station
The Potrero Converter Station construction is on schedule for

the project, and site activity is progressing. Commissioning teams to
test all the station components, new voltage source converters and
controls have been mobilized, and work has commenced on this new
innovative design (see Figures 5 and 6).
Elmhurst Static VAR Compensation

The Elmhurst substation on the Commonwealth Edison Co. (ComEd)
system is a few miles south of Chicago OHare International Airport.
ComEd is a unit of Chicago-based Exelon Corp., one of the nations
largest electric utilities with some 5.4 million customers. ComEd
provides service to some 3.8 million customers across northern
Illinois.
Two Siemens static VAR compensators (SVCs) are being
installed at the existing Elmhurst substation to contribute to voltage
support and stabilization of the northeast subzone (NESZ) within the
Sep|Oct|2009
heavily loaded ComEd service territory. ComEds systems analysis

indicated the need for two 300-MVAR SVCs at the Elmhurst substation
with nearly 100 percent availability to provide for dynamic reactive
power support. The installation of the SVCs will help prevent voltage
drops to unacceptable levels, possibly resulting in voltage collapse.
Siemens Energy in a consortium partnership with Beta
Engineering LLC of Pineville, La., is performing the turnkey project.
The identical SVCs are rated at 0/+300 MVAR each and consist of
three thyristor switched capacitor (TSC)s elements.
During normal operation, the SVCs will control only the existing
mechanically switched capacitor banks (MSCs) at the Elmhurst
substation to provide steady state voltage support. In the event of a
voltage drop, the TSCs will respond immediately and enhance the
voltage stability of the network. This is another example of range of
solutions offered by Siemens Energy that enable transmission grids
to perform smarter and more efficiently. Because of the importance
of switching steps, there are two star-connected TSCs each rated 75
MVAR, and one delta-connected, TSC-rated 150 MVAR.
Construction has commenced, and site work is progressing as
seen in Figure 7).
The Elmhurst SVCs will enhance the availability and quality of
energy in the greater Chicago area, providing high-speed, dynamic
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Figure 7: Foundations for the
major equipment and site
grading started at Elmhurst
Figure 8: Foundation preparation at Elmhurst; nearby

residences beyond fence and tree line
reactor power to support voltage recovery following system faults and

maintain improving steady state stability under extreme system loads
or contingencies.
An important consideration for the Elmhurst site is the nearby
proximity of residences (see Figure 8). Because of these residences

adjacent to the site, a noise barrier has been designed to attenuate the
sound levels that may be generated by the SVC, thereby shielding the
residential area.
Faced with a pressing need to do more with fewer resources, Kansas City Board of Public
Utilities (KCBPU) looked to technology to help transform the way the utility maintained network
information. Join Matt Kreig and Pat Morrill from KCBPU, and Pete Southwood from Autodesk as
they discuss the technology that has allowed KCBPU to model their network for efficiency gains
and how that is helping them to better serve their customers and keep rates low.
Sponsored by:
October 22, 2009

2 p.m. EST
Register today at http://elp.com
Sep|Oct|2009
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PennEnergy
WHAT IS IT?
PennEnergy.com is the only source you need for energy news, research, and insight.
Nowhere else will you nd this much energy-related content in one location.
Coverage of both the Oil & Gas and the Power

industries
19 Topic Centers to drill down into your areas of
interest
Content submitted by top energy publications like
Oil & Gas Journal, Power Engineering, and
Renewable Energy World
Ability to rate, comment on, and submit articles
Over 1,800 research and data products
Access to over 50,000 book titles related to
the energy industry
Job postings and career advice for job seekers

Recruiting solutions for employers and recruiters
Latest news and information delivered directly to
you through e-newsletters
Blogs from experienced industry journalists and
industry experts
Information on all of the newest products
and services from Oil, Gas, & Petrochem
Equipment
We could go on but I think you have the idea.

PennEnergy.com is the best source for all of your petroleum and power industry news,
research, and insight. Visit us today and nd out for yourself.
www.PennEnergy.com
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T&D
DENALI T&D MARKET INDEX
Denali Intelligence T&D Market Index

Denali Intelligences T&D Market Index is based on detailed
analysis of 11 critical spend categories that represent core purchases for most transmission and distribution (T&D) organizations. Because most of these categories have experienced significant volatility during the past two to three years, Denali Intelligences T&D
Market Index is based on a weighted composite developed from an
analysis of more than 30 utility T&D spend profiles. Denali Intelligence analyzes the key cost drivers to develop the historical and
forecasted price trends associated with this index.
As the recession continues, Denali Intelligences T&D Market
Index reflects broad economic challenges but with a utility flavor.
The Index ticked up slightly at 1.87 percent overall as six of 11 weighted
utility spend categories showed resilience in the face of commodity price
erosion. In the broader economy, second quarter 2009 was led by the pull
of underlying commodities including a 39 percent increase in crude oil
and a 6 percent increase in diesel fuel. Sharp decreases continued across
all base metals, which retreated on eroding demand, domestic and international. A slow U.S. economy and production cuts in China continued
to drive market softness in all base metals, with aluminum seeing the
sharpest declines. The overall unemployment rate reached 9.5 percent in
June, up from 7.2 percent in December 2008. Market forces are driving
even more emphasis on corporate cost restraint, and virtually all utility
T&D teams are operating in a constrained expense environment.
130
Base Year=2007
Actual
Forecast
120
110
100
90
09 . 09 . 10 . 10
08 . 08 . 08 . 08 . 09 . 09
07 . 07 . 07 . 07
l.
l
l
r
r
r
r
t
t
n.
n
n.
ct Jan
Ju Oc
Ju Oc
Ju
Ja
Ja
Ja
Ap
Ap
Ap
Ap
O
T&D Materials
T&D Services
T&D Index
As T&D costs come under increasing pressure and T&D project

loads begin to slow, T&D categories will see margin erosion. Looking
to the remainder of 2009, Denali Intelligence expects the T&D Market
Index to reflect continued price pressure overall. The trend will be a flattening for services and a slight rise in the third quarter for materials, with
an overall change on 2009 of an approximate 6 percent decrease. Additional erosion in materials is expected in first quarter 2010 with some
strengthening in the second and third quarters before easing in the fourth
for an overall movement in 2010 of about a 0.5 percent increase.
Denali Intelligence is a service of Denali Group and offers subscription and custom market intelligence designed for utilities sourcing
professionals.
Join Teresa Hansen online EVERY FRIDAY for the Utility

Weekly News Wrap Up, presenting up-to-date and
informative news briefs on important industry topics.
Hansen, Editor in Chief of POWERGRID International, Electric Light &
Power and Utility Products magazines, covers topics including:
T&D Project Announcements

Regulatory Filings and Approvals
Legislative Issues
Renewable Generation and Products
And much more!
Check out the latest news and vital topics in

an easy, online, streaming video format.
www.power-grid.com
www.elp.com
www.utilityproducts.com
UTILITY
PRODUCTS
conference & exposition
Sep|Oct|2009
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Classifieds
Market!
KNOW YOUR
Ad Index
Ad index name . . . . . . . . . . . . . . . . . . . . . . . . PG# . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Web address
Aclara Technologies. . . . . . . . . . . . . . . . . . . . . . . 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.AclaraTech.com
Applied Materials . . . . . . . . . . . . . . . . . . . . . . . . 11 . . . . . . . . . . . . . . . . . . . . . . . . . www.appliedmaterials.com
Autodesk Web Cast . . . . . . . . . . . . . . . . . . . . . . . 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.elp.com
NE
RELE W
A S E!
Bechtel Power . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.bechtel.com

Black & Veatch . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.bv.com/consult
CH2M Hill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.ch2m.com/power
Comverge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.comverge.com
CS Week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.csweek.org
Distributech 20th Anniversary . . . . . . . . . . . . . . . 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.distributech.com
ENERGY, RISK &

COMPETITIVE ADVANTAGE:
The Information Imperative
By Scott Randall
ISBN: 978-1-59370-134-5
Price: $85.00 US
Electric Light & Power Executive Conference . . . . 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . www.elpconference.com

Electric Light & Power Executive Digest . . . . . . . . 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.elp.com
Elster Electricity. . . . . . . . . . . . . . . . . . . . . . . . . . C3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.elster.eis.com
Itron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.itron.com
Oracle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.oracle.com
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PennWell Archived Web Casts . . . . . . . . . . . . . . . 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.elp.com
205-590-3505 Fax: 205-590-3885
Powergrid International . . . . . . . . . . . . . . . . . . . . 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.power-grid.com
Wesley: wtuggle@maegen.com Greg: gposey@maegen.com

Art: asigler@maegen.com
Keith: kcoleman@maegecom
Schweitzer Engineering Laboratories . . . . . . . . . . 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.selinc.com
MOBILE GEN SETS

5.2 MW Solar Maintained
Sensus Metering Systems . . . . . . . . . . . . . . . . . . C4 . . . . . . . . . . . . . . . . . . . . . . . . . . .www.sensus.com/flexnet

Siemens Energy Inc . . . . . . . . . . . . . . . . . . . . . . . C2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.siemens.com
Telvent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.televent.com
The C Three Group . . . . . . . . . . . . . . . . . . . . . . . . 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.cthree.com
7 Units (Gen 1) & (Gen 2)

Mobile PCR U.G. Switch gear
50 Hz Conversion Available
All Natural Gas

Low Nox 25 ppm
60 Hz 13.8 kV
Twenty First Century Communications . . . . . . . . . 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.tfcci.com

Stay ahead of the competition!
University Of Tulsa . . . . . . . . . . . . . . . . . . . . . . . . 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.nepinstitute.org

Utility Weekly News Wrap-Up . . . . . . . . . . . . . . . . 64 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .www.elp.com
Sep|Oct|2009
CONDITION BASED MAINTENANCE

how, when, wherever you need it!
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COLUMN
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The Uncomfort Zone
Bleed it Out
By Robert Wilson Jr.
Author
Robert Evans Wilson
Jr. is a motivational
speaker and humorist.
He works with
companies that want
to be more competitive
and people who want
to think like innovators.
For more information,
visit http://jumpstart
yourmeeting.com.
Half a century ago, marketing consultant James Vicary pulled a hoax on the
American people as a way to promote
his advertising agency. He reported that
he flashed the words Drink Coca-Cola
and Eat popcorn on the screen for a
millisecond during a movie in a theater
and caused large numbers of people to
visit the concession stand. He called the
effect subliminal advertising. Subliminal means that the effect functions below
the threshold of consciousness. Years
later, when others failed to duplicate his
results, Vicary admitted that he made the
whole thing up. Nevertheless, the myth
continues.
Is there any advertising that works
below the threshold of consciousness?
Yes, much advertising is clearly designed to speak to consumers on a subconscious level. Ads are created to get
you to relate to the setting; background
music; age, race and gender of the actors; their clothing; and the activities in
which they are involved. The idea is that
you will recognize yourself in these people and make the connection, Ah, this is
my kind of product. You dont think it;

you feel it. And feelings move us to act.
A few years ago I was involved
in nonprofit fundraising for a Christian
Mission in Africa. To learn what type of
appeal would bring in the most money,
we conducted a series of focus groups.
We asked, Which would you be more
likely to do:
A. Give money to feed starving babies; or
B. Give money to teach people how to
grow drought-resistant crops that
would end starvation in their community?
The answer they gave was almost
universally B. The comments we heard
frequently included the proverb, Give a
man a fish, and you feed him for a day;
teach a man to fish, and you feed him
for life.
We then tested both appeals. Feeding starving babies won by a landslide.
The lesson we learned was that the
emotional appeal to save a childs life is
much more powerful than a logical ap-
peal for teaching a village survival skills

that would eliminate starvation. From
that point, the heart-tugging stories of
babies dying headlined every ad we ran.
Emotion trumps logic every time.
Take, for example, Nick Uts 1972 photograph of a 9-year-old Vietnamese girl who
was naked, shrieking and running from
her village that had just been bombed
with napalm. Fear, despair and suffering
were written all over her face. More than
anything, it was her complete vulnerability that captured our attention. One
snapshot revealed the gut-wrenching horror of war, and millions of people whose
hearts were touched turned their attention
toward ending the Vietnam War.
Perhaps you recall hearing these
potent words in a speech by Jesse Jackson back in 1984.
These hands these black hands
these hands that once picked cotton
will now pick presidents.
Thrilling words. Exciting words. I
remember them well. And even though
I wasnt his target audience, they created a powerful image in my mind, and
when he finished, all I could say was,
Wow! Meanwhile, for millions of African Americans, it was the motivation
needed to put apathy aside and go to the
ballot box.
We are charged and moved by
many emotions. Here are just a few: acceptance, amusement, anger, angst, annoyance, anticipation, arrogance, awe,
anxiety, bitterness, calmness, caution,
confidence, courage, determination, disappointment, discontent, disgust, desire,
delight, elation, embarrassment, envy,
excitement, fear, friendship, frustration,
gratitude, grief, guilt, hate, happiness,
impatience, inadequacy, irritability, inspiration, joy, jealousy, kindness, loneliness, love, lust, modesty, negativity,
nostalgia, paranoia, patience, pity, pride,
regret, resentment, sadness, self-pity,
serenity, shame, surprise, timidity, torment, worry, yearning and zeal.
Which ones move you?
Sep|Oct|2009
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The Smart Grid just got smarter and faster.

Others promiseWe deliver
EnergyAxis boasts one of the worlds fastest RF mesh networks for the Smart Grid,
with class-leading operational speeds approaching 150kbps. Our network provides
the speed and bandwidth your utility will need for years to come.
Beyond speed, EnergyAxis offers deployable solutions for Demand Response, Grid
Modernization, Outage Detection/Restoration, Revenue Protection, and a host of
other utility requirements.
With more than 60 deployed systems, EnergyAxis from Elster is a proven IP-based
two-way communications network that performs reliably in harsh real-world utility
environments. Our solutions can be deployed today and are engineered to expand
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Make the proven choice today. Contact us for more information about
Elsters EnergyAxis System: 800.786.2215 or energyaxis.com
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Get the Net.
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AND GET
THE LEADER
IN AMI.
Get FlexNet and get the power to
measure, manage and control. FlexNets
proven technology amps up your ability
to get more from the smart grid. Expect
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Instant coverage. Direct point-to-point
connections. Higher data rates. And
unmatched reliability. Which means you
can also expect more accurate billing,
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enhanced energy conservation. Plus,
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that, its no wonder that FlexNet has the
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Get the Net, and get ready to become
the utility of the future. Find out more at
sensus.com/flexnet.
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EnergyWorkforce
For the industrys career-minded professionals Fall 2009
Energy Cycles
Shouldnt Deter the
Next Generation
Separating Yourself
Post-Renaissance
Innovative Recruiting
Targeting Passive
Professionals
A s u p p l e m e n t t o P e n n W e l l p u b l i c a t i o n s w__________________________
ww.PennEnergyJOBS.com
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J O I N A M E R I C A S C H A M P I O N O F
NAT U R A L G A S
CHESAPEAKE IS ONE OF AMERICAS LEADING PRODUCERS OF NATURAL GAS. Were

also proud to be listed among the FORTUNE 100 Best Companies To Work For in 2009.
Chesapeake offers rewarding opportunities in many career areas:
Drilling Engineers Reservoir Engineers EH&S

Production Engineers Facilities Engineers
Pipeline Specialists Geologists Petrophysicists
Chesapeake has gained national recognition as a top-paying company
with outstanding benets and a generous stock-award plan.
Chesapeake is a dynamic, fast-growing organization of professionals who are committed

to our company, our communities and our environment. Join us as we champion natural gas
the answer to Americas energy future.
NYSE:CHK
APPLY ONLINE AT _______

CHK.COM
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Stacey Schmidt, Web Publisher

staceys@pennwell.com
EnergyWorkforce
Chris Posey, J.B. Avants, Editors

cposey@pennwell.com
jba@pennwell.com
Candice Doctor, Sales Manager
candiced@pennwell.com
Chad Wimmer, Art Director
chadw@pennwell.com
Dorothy Davis, Production Manager
dorothyd@pennwell.com
JOBS INSIGHT
Networking To Top Talent OR Networking
Your Way to Top Talent
Stanna Brazeel, PennWell
OP- ED
Separating Yourself Post-Renaissance
Tommie Grigg, Audience

Development Manager
tommieg@pennwell.com
Tom Cintorino
Sr. Vice President, Digital Media
Jason McAuliffe, ERI
ENERGY WORKFORCE
Energy Cycles Shouldnt Deter
the Next Generation
David Dunlap, BJ Services Company &

Steve Nance, Steele Creek Investment Company
PennWell Corporation
1421 South Sheridan Road
Tulsa, Oklahoma 74112
918 835 3161
PennWell.com
Recruitment Advertising Sales:

Candice Doctor
Sales Manager
918 831 9884
candiced@pennwell.com
Stephanie Brown
Power & Petroleum Account Executive
918 832 9228
sbrown@pennwell.com
RECRUITERS PRACTICUM
Innovative Recruiting- Targeting Passive
Professionals
Evan Cohen, EVCO
POWER-GEN INTERNATIONAL
2009 Conference Schedule
12
ADVERTISERS INDEX
Aerotek Energy Services ............................................................................................................................... 5
Chesapeake Energy Corp .......................................................................................................Inside Front Cover
Brent Eklund
Petroleum Account Executive
720 535 1264
beklund@pennwell.com
Chevron ........................................................................................................................................Back Cover
Statoilhydro USA E & P Inc ............................................................................................................................ 3
Power-Gen International 2009 ..................................................................................................................... 11

PennEnergyJOBS....................................................................................................................................... 10
Worley Parsons. ........................................................................................................................................... 7
www.PennEnergyJOBS.com
________________________________
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J O B S
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i n s i g h t
Networking To Top Talent OR

Networking Your Way to Top Talent
t would seem that during an economic slump, finding employees would be one of the
easiest tasks. The truth is, finding top talent is still quite difficult.
An unemployment rate over 9% means companies are sifting through an even larger sea
of unemployed people to find their talent. Unfortunately, many employers are still working
within the status quo of hiring methods. It is commonplace to post a job, wait for the resumes
to pour in and select talent based on those resumes. As the old saying goes, work smarter
not harder. Updating the recruitment strategy is a crucial step to increasing the number of
talented individuals joining your company. So what should your new strategy look like? It
is actually not a novel approach at all. Your strategy should be about leveraging the art of
networking. Although many talk about the importance of networking, it is still a second rate
practice in most organizations.
One efficient way of networking is through social
Networking should be
networking sites such as LinkedIn. Social networking
has become popular in the last couple of years, but its
an ongoing activity
benefits are not being maximized to the fullest. Targeted
regardless of whether
searches should replace posting openings as the most
or not
nott you
you currently
cur
urre
rent
ntl
tly
ly have
hav
ave a position open. It is
used recruitment practice. Strategically recruiting top
important to build up your arsenal of identified talent
talent includes identifying potential candidates with
similar skills, experience and even industry experience.
for openings you have now and in the future.
Networking technology puts important information at a
hiring managers fingertips.
A second important type of networking is through face-to-face events. Face-to-face
meetings give a recruiter or hiring manager one more dimension of detail. Job fairs are
certainly one way of face-to-face networking, but they are really only one step up from sifting
through resumes. A more effective networking strategy should include industry events. Just
like online targeted recruitment, industry events provide an entire pool of potential candidates
from a given industry. HR and hiring managers should become skilled at observing and
evaluating people at these events; as if watching on-the-job interviews in progress.
Many of the people you target at these events will be gainfully employed and may not be
looking for employment. Do not let this be a discouraging factor. Everyone is willing to hear
about an opportunity. This opens the door to a long-term connection. There will also be some
individuals actively seeking out new employment at conferences and tradeshows. Pay attention
to this active candidate pool as well. If they are trying to get in front of you at an event, they are
more savvy than the person who did nothing more than apply to an advertisement.
Networking should be an ongoing activity regardless of whether or not you currently
have a position open. It is important to build up your arsenal of identifi ed talent for openings
you have now and in the future. The quality of individuals you identify through networking
will be greater because you have not limited your pool of candidates to only those who apply.
Sincerely,
Stanna Brazeel,
Manager, Staffing and Salary Administration, Human Resources
PennWell
F o r j o b o ppo rtu n i ti es , vi s i t www.Pe nnEne rgyJOB S.c om
E ne rgyWork f orce
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Do more
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exploring collaborating
project leading technology leading industry leading

subsurface subsea subanywhere smiling geosteering
globe-trekking horizontal drilling ecothinking biking
team building carbon capturing pushing the envelope
groundbreaking digital mapping remote sensing

rock sampling rock climbing relaxing on the weekends
playing creative thinking stress reducing family bonding
mud logging well logging caring for our environment
life balancing parenting softball playing soccer playing

initiative grabbing challenging yourselff
here.
Do more with your career. Do more with your life. Right here in Houston at the
energy company behind the worlds longest subsea pipeline. DoMoreHere.com
__________
2009 StatoilHydro. An equal opportunity employer.
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OP-ED
Separating Yourself Post-Renaissance

By Jason McAuliffe, ERI
When I received a call from PennEnergy about

writing a short article on the current employment
landscape in the Refining Sector, I thought to
myself, oh boy, this isnt going to pretty. If asked
to write on the same subject this time last year or in
2007, I may have declined because of our workload.
The perfect storm that led to the boom in refining
investment and expansion earlier this decade would
be a great article to write, but maybe next time.
While my eternally optimistic personality hopes we
see a resurgence in the Golden Age of Refining, it is
more realistic to conclude that the renaissance the
industry experienced earlier this decade will be a
subject we wax nostalgic about with our children.
The aptly dubbed meltdown that set in late last year and its
lingering aftermath has continued to weigh on the refining
sector. From 2001 to 2008, refiners were printing money with
fat margins on gasoline & diesel and major integrated oil
companies were even happier with the crude run up to $140+/
bbl. Most refiners were investing in their physical and people
assets. Mandates for Ultra-Low Sulfur Diesel, ethanol as
oxygenate and environmental upgrades became an acceptable
cost of doing business. All of these investments created
an intense demand for a wide variety of engineering and
economic disciplines. These were good times.
Todays look is that while crude oil has backed off 50 percent
from the historic high prices of last year, the demand
destruction caused by refined products prices has held
firm. Bottom line? There is little margin in the complex
manufacturing process of refining, and where you cannot find
margins, there is little support for investment. Welcome back
to the good old days, when the refining business was not a
profit centermake money on the crude, process at near cost,
then make money on the sale of taking the product to market.
The demand in todays refining job market is about maintaining
assets. There is a fair amount of hiring taking place for
disciplines of reliability, maintenance, safety, instrumentation,
About the Author

Jason McAuliffe is President and CEO of ERI.
Jason graduated from Texas A&M University
at Galveston, where he studied Environmental
Sciences and earning his Bachelor of Science
degree in both Marine Biology and Marine Fisheries. Since
then he has spent 8 years within the petroleum industry and
regulatory agencies.
ERI is an Executive Search Firm for a wide array of industries.
The origins of ERI were in the petroleum industry, serving
clients engaged in refining and retail marketing activities.
Today, ERIs practices include energy, consumer product goods,
retail, hospitality and healthcare.
and process controls. We have seen little movement in roles

pertaining to design, planning, and construction of new units,
which undoubtedly is the result of major expansions being
shelved if there was room to walk away. What to expect moving
forward? The industrys current players will either rationalize
the sale of assets or will hang on with minimal investment until
the market firms up and demand is on a consistent upswing.
Pressures from overseas refiners will put further short and
mid-term pressure on domestic refineries to cut costs or divest
marginal assets. We may see assets sold, but the counterparty is
likely to run the business with rational expectations for return
on investment and will need the best people to extract every
penny. The question for professionals seeking opportunities
in todays and tomorrows refining industry is how to separate
yourself from the crowd.
Eighty percent or better of experienced professionals will
find their next career opportunity through a peer network
or industry association. When you add in those who find
employment by applying directly to a company (e.g., dropping
off a resume or applying online), you probably cover 95
percent. If you are in the unfortunate situation of being
unemployed, find a passion in networking or you will be
relying on fate. Applying through a website is easy but you
Continued on page 7
E ne rgyWo rk f orce
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BEMaGS
The things that make you unique may also make you uniquely qualified. Thats
why, at Aerotek, we take the time to find the person behind the resume. We dig deeper to discover
the very best qualities inside you. Qualities that inspire. Qualities employers look for. Qualities you
may not even know you had. Because at Aerotek, we send only one perfect candidate to fill one
perfect opportunity. And we want it to be you. People. Fit. Perfectly.
Nationwide & International Offices.

Engineers
Project Managers
Welders/Fitters
Pipeline Inspectors
800.977.6499
Geologists
Career Placement
Specialists
SM
www.aerotek.com
_____________
Specialty Operators/Technicians
Project Administrators
Aerotek is an equal opportunity employer. An Allegis Group Company. 2009
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ENERGY WORKFORCE
Energy Cycles Shouldnt Deter the Next Generation

Why we still need to invest in future workforce staffing needs
By David Dunlap, BJ Services Company & Steve Nance, Steele Creek Investment Company
The current commodity price doesnt change things.

As more petroleum specialists reach retirement age, we
need bright, innovative minds to enter the business to
help us meet the energy needs of the future.
What has been referred to as the Great Crew Change will
happen irrespective of high or low commodity prices. Now,
more than ever, our industry needs to focus on ensuring that we
keep a stream of new talent interested in entering our workforce
so we can meet the technical and environmental challenges
facing our national and global energy needs.
The fourth annual Industry Salute to Interns event, held on
July 21, 2009, provided an excellent opportunity for industry
representatives to meet with students who have demonstrated a
specific interest in a career in the oil and gas industry. Students
employed during the summer by Apache, Chevron, El Paso,
Halliburton, Noble Energy, Red Arrow Energy, Sanchez Oil &
Gas, Schlumberger and Shell participated in this one-day event
in Houston, hosted by the Offshore Energy Center.
The central theme of this years event was the future of the
industry, in light of the dramatic changes in oil and gas prices,
and the impact of the current economic crisis on hiring and job
opportunities. Presentations and panel discussions during the
day reinforced the message that the future of our industry is
bright, and opportunities for motivated and talented people in
our industry are tremendous.
Salute co-chairs were presented information and fielded
questions regarding the fundamentals of the energy industry and
the importance of hydrocarbons in the long-term global energy
future. Robert Drummond of Schlumberger, Anthony Gallegos
of Scorpion Offshore, Darrell Hollek of Anadarko, and John
Kelly of El Paso Exploration & Production Company participated
in a discussion in which each panelist described their companys
strategies in the current market environment and the impact of
these strategies on future manpower requirements.
In addition to the panel, Laura Schilling of Halliburton and
Libby Cheney of Shell discussed career path options and offered
advice on how students can proactively manage their career and

ultimately get into their dream job.
The event included entertaining and informative presentations
from Jan Hargrave and Marilyn Moats Kennedy who discussed
body language and the challenges of communicating across
generation lines.
Questions asked by the interns at this years Industry Salute
event centered on the future of the oil and gas industry. Most
interns are aware of workforce reductions that have occurred in
the industry during the past year and a boom-bust perception
of the industry still exists.
Presentations and discussions during the day put this question
at the forefront and attempted to provide information to
these students to calm their concerns about the long-term
opportunities in the oil and gas industry.
In the end, the message conveyed during this event was this: The
energy business is indeed a great place to pursue a career. Yes, this
is a cyclical business. There have been cycles before and we will
encounter cycles in the future. But there is always a great career in
our industry for people who are motivated and willing to work hard.
A tremendous number of professionals in this industry will
retire over the next 10 to 15 years and the future is extremely
bright for talented individuals who enter the energy business.
In addition to oil and natural gas, we need all types of energy
professionals to meet our future needs. We need highly skilled
technical people to help unlock the resources, both renewable
and non-renewable, to meet future demand. We need people
focused on integrity, leadership and involvement in professional
societies and their communities.
The current economic environment coupled with recent increases
in supply will be short lived when looking at the macro energy
supply and demand picture. Companies have reacted differently
to the recent drop in commodity prices. Virtually everyone has
cut back on activity levels as evidenced by the dramatic drop in
North American drilling rig activity. Today, many companies are
focused on production optimization programs and developing
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ENERGY WORKFORCE
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OP-ED
Continued from page 4
inventory for the inevitable upturn in prices. The greatest challenge these same
companies face is having an adequate workforce to support this activity when that
recovery begins.
There is no question that hiring interns and new employees has slowed for most,
if not all, companies during the past 12 months. We need to be careful that we
dont let the pendulum swing too far and exacerbate the workforce issue facing our
industry as many reach retirement age over the next few years.
Hats off to the Offshore Energy Center and in particular, Sandra Mourton, the
Executive Director, for hosting such a great event. As an industry, we need to
maintain efforts to continue to attract talent and encourage students to seek careers
in oil and gas and once again the Industry Salute to Interns event proved to be a
great opportunity to convey this message. EW
About the Authors

David D. Dunlap is Executive Vice President and Chief Operating
Officer of BJ Services Company. He originally joined BJ Services
in 1984 and served in a variety of engineering, operations, and
management positions until 1995, at which time he became President
of the International Division. Dunlap was appointed Executive Vice
President and Chief Operating Officer in March 2007. He serves on
the Texas A & M Petroleum Engineering Industry Board, the Texas Tech University
Petroleum Industry Advisory Board, The John Cooper School Board of Trustees, and
the Board of Directors of The Cynthia Woods Mitchell Pavilion. Dunlap received a BS
in petroleum engineering from Texas A & M University in 1984.
BJ Services Company is a leading provider of pressure pumping, well completion,
production enhancement and pipeline services to the petroleum industry.
will likely find a better response trying

to communicate with office furniture. I
have seen hundreds of good articles on
networking and networking etiquette so
learn them and live them. Find out where
your hired peers were found and establish
yourself there, whether it be a trade
association, social networking site, or
coffee shop. Luck favors the prepared.
For a final word and note on my beloved,
albeit sometimes misunderstood,
profession: recruiters do not place many
people. . . I repeat, recruiters do not place
many people. Recruiters spend 90 percent
(or better) of their time searching for
professionals that have a very specific
background and experience in a particular
discipline. Find the recruiter(s) that are
the best in your industry and befriend
them. Mental note: befriend and stalk
are two very different concepts (research
networking etiquette). Experienced
recruiters love to network and hopefully
they will make some time for you. My
final word for today is to not let fate
determine your future. The worst time to
plan your future is when you are in the
situation that forces you to. Be proactive
and manage your own brand. EW
Steven W. Nance is President and Sole Director of Steele Creek

Investment Company, a personal investment vehicle primarily for
oil & natural gas business ventures. Mr. Nance was President of
Peoples Energy Production Company until its sale in 2007 to El Paso
Exploration & Production Company. He has previously worked for
The Superior Oil Company, Mobil Oil, Meridian/Burlington Resources
and Xplor Energy.
Ener He has been recognized as a Distinguished Engineer at Texas
Tech University, serves on the Petroleum Industry Advisory Board at Texas Tech, the
Independent Petroleum Association of America, Southeast District Board of Trustees,
the Cypress Woodlands Junior Forum Business Advisory Board and the Board of
Directors for The Center for the Performing Arts at the Woodlands. Mr. Nance received
a BS degree in petroleum engineering from Texas Tech University in 1978.
Steele Creek Investment Company is a private entity that invests primarily in the oil
& natural gas business.
We encourage your feedback on this or any PennEnergyJOBS EnergyWorkforce article. Please send
your comments to feedback@PennEnergyJOBS.com
En er gy Wo r k f o r c e
Currently seeking
Transmission
Network supervising
and senior engineers,
and project managers
For more information on our
exciting career opportunities
and to apply for these positions,
please visit our website at:
www.worleyparsons.com and
click on Employment.
WorleyParsons is an Equal Opportunity
Employer M/F/D/V.
F o r j o b o ppo rtu n i ti es, visit www.Pe nnEne rgyJOBS.c om

A
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P r a c t i c u m
Innovative Recruiting- Targeting Passive Professionals

By Evan Cohen, EVCO
As an HR professional, you might notice that

the recruiting landscape is changing rapidly and
that there is an immediate need to shift your
approach when recruiting employees. In order to
stay ahead of the curve and remain competitive,
HR management and recruiting professionals
must develop strategies to address these
challenges. Two such strategies include:
Defining your companys description of a
qualified-best match candidate.
Developing the best strategy for targeting
and recruiting the best candidate, which
is typically the top performing industry
professional.
A Qualified-Best Match
This process starts with articulating exactly who your ideal
candidate is.
With a systematic approach to candidate profiling, you
should be able to identify the hard and soft skills, experiences
and attitudes, education and background that a candidate
should possesstraits that will ultimately translate into a top
performing employee.
One way to identify your best match candidate profile is by
interviewing your current top performers and isolating the
common traits that they all share.
Once you know exactly the type of candidates you are looking
for, you can begin to identify where you might find them.
The Difference Between Active and

Passive Candidates
Active job seekers are motivated by any number of
circumstances, are not necessarily working, and are typically
easier to find; that is, they probably have their resume posted
on a few job boards, are leaning heavily on their network of
professional associates to assist them in their search, and are
calling companies directly to learn about current and future
opportunities of employment.
Passive candidates are typically employed and satisfied with
their employer and are content in their current role. That is not
to say that if the right opportunity presented itself, they would
not be interested in learning more. However, they are most
likely not out in the field broadcasting their desire to find a new
opportunity. These professionals are probably looking to move
a bit slower, will have more questions, and will likely be a bit
more hesitant to risk leaving a good job for a new challenge and
increased risk.
Active and Passive candidates are not different people with
different skills sets and abilities. Candidates from one group are
not necessarily any better or worse than the other, they are just
at different points in their employment cycle.
Candidate interest and availability can be quite dynamic and
is dependent upon a number of factors. Changes in current
management, workloads or personal circumstances can
accelerate the transition from passive to active candidate. In
extreme cases, layoffs, natural disasters, lost contracts and other
forms of sudden shifts can lead this to happen overnight.
That being said, the true measure of your best candidate has
less to do with her state in seeking out a job, and more to do
with how she measures up to your companys best match
candidate profile.
The Search Begins: Your Strategy

for Targeting and Recruiting the Best
Candidate
Why is it important to continuously search for both types of
candidates? To keep your candidate pipeline full! Successful
recruiters continually source both Active and Passive
candidates to ensure a wider pool from which to choose.
Doing so ultimately results in reducing the time-to-fill and the
cost per hire.
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R e c r u i t e r s
Active candidates typically will come to you, either by applying

directly for your positions, which may be posted on a job
board or corporate career site, or by placing a direct call to
your office. These inbound responses are easier to manage
because usually, the candidate has a working knowledge of
your company and is interested in joining the team. The only
selling that has to take place on the recruiters behalf occurs
during the compensation negotiation. Other than that, the
candidate rarely offers an objection to submitting an updated
resume or scheduling phone and face to face interviews.
Passive candidates are typically more difficult to find, so
sourcing a passive industry professional requires more
investigating through phone calls, referrals from network
partners and consistent and persistent relationship-building.
Professional recruiters are adept at being able to manage
both responsibilities: maintaining a steady flow of active
candidates to fill immediate needs, and establishing strong
industry relationships that yield passive candidate results over
time. By focusing on both types of candidates, the disruption
caused by vacancies can be minimized, and sometimes
avoided altogether. In addition, by making proactive attempts
to network, you are creating a competitive advantage by
spreading the message that you represent an employer of
choice within your industry.
The challenge that HR professionals and their recruiters face is
that they source and recruit both types of candidates using the
same approach.
The 5 Steps of Getting to I accept!

To attract the top performing passive industry professional,
HR managers must work closely with their recruiters to
develop and deliver the right message with the right frequency
to keep their company and current opportunities at the top of
their target candidates mind. That way, when the time is right
and the candidate is open to exploring new opportunities, her
first call is to the recruiter with whom she has an established,
long term relationship.
Once you identify your best match passive candidate, you
must provide her with the information she needs to evaluate
an opportunity objectively. When done correctly, you will
use a series of different recruiting and information-sharing
approaches and will move the candidate smoothly along a
path of increasing knowledge and interest until ultimately, she
decides to make the move.
En er gy Wo r k f o r c e
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P r a c t i c u m
The following steps will guide you in ensuring that you stay on
track through the process:
Hold an information-gathering session. Use your first
conversation to open dialogue and learn about interested
individuals as potential candidates. Have them tell you a
little about themselves first. Dont go too fast, even if the
match seems perfect. Provide the person with a brief, highlevel overview of the job, and schedule an exploratory call
sometime later. Be a bit vague, and mention the importance
of the job to the companys strategic direction. This approach
also gives you the option of networking with the candidate
and meeting with professionals they feel are top performers.
Shift decision-making from a short-term emphasis to
a more long-term one. The basic goal of the preliminary
discussions is to have the candidate consider the strategic and
tactical issues associated with making a change and accepting
a new opportunity. Too often, candidates lose interest
and opt out early because the recruiter did not effectively
communicate the short-term goals and the long-term growth
opportunities. Understanding the candidates needs and
balancing the correct message will give a candidate enough
short-term information to understand how she can make an
immediate impact and enough long-term information to get
her excited about future projects and goals.
Dont rush the process. Passive candidates need time to absorb
the information you provide. While you can try to speed the
process along, you dont ever want to come across as being
desperate. Ask questions and listen. If youre talking too much,
youre pushing. Its better to find out what the candidate would
need to know to move to the next step in the evaluation process.
Scheduling an informal meeting, such as a lunch date, is a
great way to build your relationship and understand what she
is currently doing, and what underlying concerns or questions
you will need to address as your recruiting process continues.
Create competition. Of course, the goal of this exercise is
to move this professional from candidate status to applicant
status as quickly as you both deem appropriate. Once you
are sure this candidate is a top professional and you have
addressed her major concerns, it is time to create a sense of
urgency. A great way to do this is by informing the candidate
that there are a number of professionals showing great
interest in the opportunity, but you consider her to be a
top candidate. Remember, a great job is always better when
theres competition.
F o r j o b o ppo rtu n i ti es, visit www.Pe nnEne rgyJOBS.c om
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R e c r u i t e r s
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P r a c t i c u m
Set the table. Invite the candidate to the office to meet the
team. In sports, as in recruiting, nothing is more important
and beneficial than utilizing the home court advantage.
When every employee the candidate will meet with
works together and understands her role in the recruiting
process, the candidate will have a true understanding of
the companys culture and atmosphere and will be better
equipped to make the decision to join the organization.
Learn Why...
You Should Post Your Resume
on PennEnergyJOBS.com
When recruiting passive candidates, use a professional, stepwise approach to provide them with small doses of information
that keep them engaged. You will know youre successful when
the candidate starts asking you more questions, calls to see how
the interview went, or asks about the other candidates.
PennEnergyJOBS is a member of the PennWell

family, a global media company with experience in
the energy industry dating back to 1910. We know
the energy industry and everyone in it. Our mission
is simply stated: Connect the leading industry
employers with the best talent the industry has to oer.
Let us help you.
FREE Resource!
Job Seeker Tools
Post Resumes/CVs
Search Jobs
Career Ignition Blog
Career e-Newsletter
Energy Workforce Career Guide
Job Tip Videos
Career Fairs
Global jobs for global job seekers
Take the next step to a great career.

Log on to PennEnergyJOBS.com today!
Post. Search. Work!
In time, the information you provide will be enough for the

candidate to realize that this is an opportunity worth pursuing,
so be aware, maintain control and be ready to move the process
towards closure.
Keep in mind, when the demand for talent outstrips the supply
of candidates, you are most likely to find the largest number
of top performing professionals among the ranks of passive
candidates. So maintain your relationships, ask for referrals and
always be recruiting! EW
About the Author

Evan Cohen, President of EVCO Recruiting,
offers more than 10 years experience assisting
companies with creating innovative talent
management and recruiting strategies. Evan
Cohen earned a Bachelor of Arts degree
in Communications from California State
University, San Marcos, a Human Resources Professional
Certification from University of California, San Diego, and
is AIRS certified. Mr. Cohen may be reached at Evan@
EvcoRecruiting.com.
EVCO Recruiting has developed an aggressive recruiting
formula resulting in the creation of a high performance fully
scalable, turnkey recruiting solution for direct manufacturers,
suppliers and indirect service providers within the Energy
industry. Visit www.EvcoRecruiting.com and www.
___
BigGreenBoard.com.
_____________
PennEnergyJOBS.com
10
We encourage your feedback on this or any PennEnergyJOBS EnergyWorkforce article. Please send your comments to feedback@PennEnergyJOBS.com
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DECEMBER 8-10, 2009

LAS VEGAS CONVENTION CENTER
LAS VEGAS, NV
www.power-gen.com
9!
OR 200
F
E
T
A
D
E
H
AVE T
FLAGSHIP MEDIA SPONSOR:
OWNED & PRODUCED BY:
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December 8 10, 2009 ~ Las Vegas Convention Center Las Vegas, Nevada USA
Sunday, December 6, 2009 COMPETITIVE POWER COLLEGE Pre-Conference Workshops

8:00 AM
5:00 PM
CPC 101
Room N102
CPC 102
Room N103
CPC 103
Room N107
Basic Gas Turbine Metallurgy and

Component Repair
Understanding Fossil Power Plant

Performance Using First Principles
Models
An Introduction to the Design, Operation

and Evaluation of Parabolic Trough
Solar Power Plants
HALF-DAY WORKSHOPS
Monday, December 7, 2009 COMPETITIVE POWER COLLEGE Pre-Conference Workshops
8:00 AM
5:00 PM
CPC 301
Room N103
CPC 302
Room N107
CPC 303
Room N108
CPC 304
Room N111
CPC 501
Room N101
Capital Project
Analysis at Power
Plants
Essential Practices for

Outage Management
Turbine Generator
Failures: Prediction
and Prevention
Lost Efficiency:
Finding Low Hanging
Fruit
8:00 AM
12:00
PM
Why Good Projects

Dont Get Built
Tuesday, December 8, 2009

9:30 AM
11:30 AM
Conference
Tracks &
Sessions
1:30 PM
3:30 PM
OPENING KEYNOTE ADDRESS

Las Vegas Hilton
Barron Room
Industry Trends /
Industry Trends /
Competitive Power
Competitive Power
Generation I
Generation II
Room N109
Room N110
Integrating
Streamlining
Renewables with
Thermal
Project Approval
Panel Discussion
Generation Panel
Discussion
Mr. Michael Yackira

President and Chief Executive Officer
NV Energy
Environmental
Issues I
Environmental
Issues II
Fossil
Technologies I
Fossil
Technologies II
Room N103
Room N111
Room N107
Room N108
NOx Control:
Issues and
Strategies
Mercury Test
Results and Issues
Modern Coal
Plants & Design
Developments
Material Handling
Challenges and
Solutions
Wednesday, December 9, 2009

7:30 AM
9:00 AM
Networking Breakfast Ballroom C, Las Vegas Hilton
9:30 AM
11:30 AM
The Stimulus
Plans Effect
Advanced
Generation
Technologies
Three Optimization
Approaches to be
Cost-Effective
Today Panel
Discussion
Regulatory Issues
and Environmental
Compliance
CO2 Abatement
Strategies
How Carbon
Capture Affects
Plant Design
Biomass and
Biomass Co-Firing
Considerations in
Coal-Fired Power
Plants
1:30 PM
3:30 PM
Renewable
Electricity
Standards and Their
Impact on the
Electric Power
Industry Panel
Discussion
Smart Grid,
Renewables
Integration and
System Security
Transmission
Trends Affecting
Power Generators
Advances in MultiPollutant Control

Technology
Control of SO2 and

SO3 Emissions
Pre- and PostCombustion CO2

Reduction
Technologies
Innovations in
Gasification and
IGCC
Thursday, December 10, 2009

7:30 AM
9:00 AM
9:30 AM
11:30 AM
12
Networking Breakfast Ballroom C, Las Vegas Hilton

Mega-Session
Room N110
Mega-Session
Room N112
Preparing for the Upcoming CO2 Capture / Sequestration Legislation

Panel Description
Large Frame Gas Turbines
E ne rgyWork f orce
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HALF-DAY WORKSHOPS
CPC 104
Room N108
Power Plant Construction
Management
A Guide to Survival
1:00 5:00
PM
CPC 502
Room N102
Temperature
measurement and
Data Acquisition in
Power Plants
1:00
5:00 PM
CPC 403
Room N115
Turbine Generator Torsional

Vibration Failures
Intellectual Property
Fundamentals for Renewable
Energy Developers, Licensors
and Licensees
CPC 503
Room N101
CPC 504
Room N102
CPC 505
Room N113
Key Considerations
and Best Practices in
EPC Contracting for
Wind Farms
(Developers
Perspective)
Turbine Inlet Cooling:

The Energy Solution
to Increase Power
Output, Lower
Emissions, Decrease
Carbon Footprint &
Improve Heat Rate
Combustion
Dynamics in Gas
Turbine Power
Plants
Renewable Energy
I
Renewable Energy
II
Room N113
Room N112
Room N114
Combined Cycle
Technology
Update
Advances in
Gas Turbine
Technology
Wind Power
Biomass Fuels for

Power Generation
8:00 AM 5:00 PM
each day
CPC 201
Room N109
Heat Rate Awareness and
Carbon Reduction
Mr. Keith Rattie

Chairman, President and CEO
Questar Corp.
Gas Turbine
Technologies
Biomass Market
and Technology
Developments
BEMaGS
TWO-DAY COURSES
CPC 402
Room N101
Mr. Pierre L. Gauthier

President & CEO
ALSTOM Canada Inc. and ALSTOM US Inc.
Gas Turbines An
O&M Perspective
On-Site Power
Plant Performance
II
Room N101
Room N102
Performance
Improvement
Through Instrument,
Control and
Electrical Systems
Gas Turbine Inlet

Cooling Improves
Output and
Emissions
Emerging Clean
Technology
Innovations
How Distributed
Energy
Technologies will
Integrate with
Tomorrows
Smart Grid
Panel Discussion
Plant Maintenance
Steam Turbine
Reliability,
Availability &
Efficiency
Energy Storage
The 2010 ESCO

Model How to
Overcome the
Capital Cost
Hurdle Panel
Discussion
Asset Optimization
Combustion
Optimization and
Boiler Cleaning
Utility-Scale
Solar Power
Room N117
Net Zero:
Blending
Technologies to
Achieve Grid
Independence
Plant Performance
I
Mega-Session
Room N114
Renewable Power Survival
Panel Discussion
BEMaGS
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F
Who is going to help discover the energy for a global

population expected to grow 20% by 2025?
Join us, and you will.
At Chevron, were dedicated to providing the energy the world needs

to keep moving forward. Here you can be part of a diverse team of
professionals from different disciplines and skill sets working together.
A team that welcomes tomorrows challenges and believes the best
way to solve them is through collaboration. So no matter what your
expertise, youll have the tools and support to make a difference every
day. Find out how far your skills and talents can take you. For local
and global opportunities, visit us online today.
An equal opportunity employer that values diversity and fosters a culture of inclusion.
CHEVRON, the CHEVRON HALLMARK and HUMAN ENERGY are registered trademarks of Chevron Intellectual Property LLC.
2009 Chevron Corporation. All rights reserved.
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Contents | Zoom in | Zoom out

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2008 Utility Financial Rankings

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How can we get by with less when the

Answers for energy.

Smart Distribution Solutions

Schweitzer Engineering Laboratories invented the

The business of power for utility executives

Commentary/Letter to the Editor 8

EE: Priniciples and Practice 12

How Low Can We Go? Driving

by Robert Rogan, eSolar

46 Concentrating Solar Thermal

Energy and its Uses

48 Big Solar, Small Footprint: The Role

Taking It Into Account 18

The 2008 Utility Financial Rankings

Why its Becoming Important

Carbon Recycling: An Alternative

IT/CIS & CRM

58 The Smart Way to Protect the Grid

From Cybersecurity Threat

Pursuing Government Grants 32

59 Planning for Another Challenging Year

The Uncomfort Zone

By Robert Evans Wilson Jr.

We need partners that

understand our vision

Capturing data. Liberating knowledge.

Go to http://uaelp.hotims.com for more information.

Audience Development Manager

Sr. VP Audience Development and Book Publishing

Southeast & Midwest Regional Sales Manager

Northeast Regional Sales Manager

West Regional Sales Manager

Exhibitor Service Manager DistribuTECH

Reprints and Classifieds Account Executive

DistribuTECH Exhibit & Sponsorship Sales Manager

Senior Vice President, Planning, Development

ELECTRICLIGHT&POWER is the official print publication of

May 2428, 2010 : Nashville, Tenn.

March 23-25, 2010 : Tampa (Fla.) Convention Center

GST No. 126813153

Printed in the U.S.A.

BUILDING A WORLD OF DIFFERENCE

You cant wait for climate

> Climate Strategy Best Practices

No matter what your personal beliefs are, or what your corporate

> DSM and Energy Efciency Planning

position is, climate change is an issue that has to be addressed.

> Generation Technology Assessments

Enterprise Management Solutions (EMS), the management

> Carbon Footprinting

consulting division of Black & Veatch, can help you determine

> Carbon Price Modeling