Thursday, March 20, 2008

Renewable impact on power costs must be clear: S&P

Accurately rating structured products is pretty tough, here they're talking simple common sense, which is what Henry Poor did when he wasn't writing his manual.*
From Reuters:
U.S. utilities and states must do a better job of explaining the potential costs of complying with renewable portfolio standards or risk consumer backlash if those costs show up in power bills, officials at Standard & Poor's said in a conference on Tuesday.

Twenty-nine states and the District of Columbia have some type of RPS. Other states and the federal government, which has not yet been successful, are considering the standards.

Some states with RPS moreover are looking to increase renewable targets even before reaching their initial goals.

RPS requires utilities to acquire a certain percentage of power supply from renewable sources such as wind or solar.

That renewable power is often sold at above-market prices.

Some studies forecast RPS costs will not significantly boost customer rates, and some reports predict RPS will actually reduce costs.

S&P however said the states and utilities have not provided much data that assesses the actual RPS costs incurred to date....MORE

*Henry V. Poor's
"Manual of Railroads of the United States for 1873-74"
Engraved Frontispiece; Description of the Status of the CPRR as of December 31, 1872.

Poor's Manual