ScottMadden, Inc., one of North America’s leading energy consulting firms, recently released its Fall Energy Industry Update. Themed “Generation to Generation: An Energy Evolution,” this report will give you bottom-line insights, distill recent events, and help you as you prepare to anticipate and respond to emerging trends, including the wholesale energy competition conundrum.

Our energy industry is evolving. It is a time of surprising developments and new ideas. FERC has, for a while, attempted to find a price formation construct in competitive electric markets that provides the “right” price signals. It is a difficult economic problem that, so far, has evaded a simple solution. Complicating this, the Department of Energy now has proposed action to compensate “fuel secure” resources, defined by DOE as those with a 90-day fuel supply on site. This compensation would ensure such resources recover their costs. In this report, ScottMadden takes a close look at the underlying problem, its causes, and some solutions being considered.

“The balance between short-term pricing and long-lived investments in power generation has long been a tricky one to manage,” said Stuart Pearman, partner and energy practice leader at ScottMadden. “Now FERC has to navigate recent state-driven, outside-of-market compensation mechanisms and a new consideration in this process—the DOE’s Grid Resiliency Pricing Rule proposal. Comments on the DOE proposal have been, to put it mildly, robust. Some think it promises to be a Gordian Knot. It surely will generate much industry interest in the coming months.”