ICF Consulting Identifies the U.S. Energy Act’s Implications for the Global Energy Sector

WASHINGTON, DC, – In light of the passage of the Energy Policy Act of 2005, and in anticipation of the President's signing of the legislation in New Mexico next week, ICF Consulting released a series of issue papers for energy market participants and the regulatory community providing perspective on the impacts of the Act. These papers assess implications of key provisions of the Act on utility mergers, petroleum markets, the siting of new energy facilities, nuclear power, electric transmission, renewable energy, energy conservation, and clean coal projects. All of the papers can be found on-line at: www.icfconsulting.com/energyact.

"This new law, while not addressing every aspect of energy markets, certainly cuts a wide swath across this critical industry. Every major component of the U.S. energy infrastructure, from oil and gas development to electric transmission and energy efficiency, is affected,” says Philip Mihlmester, ICF Consulting Senior Vice President.

The implications of the Act’s passage are substantial, including:
 The repeal of the Public Utility Holding Company Act (PUHCA) and the requirements for enhanced reliability and national grid monitoring likely will be a catalyst for further utility consolidation—potentially increasing the number of mergers.
 Even though the Act provides incentives for the production of more domestic oil that may increase supply, there will nonetheless be an increasing dependence on imported petroleum.
 Jurisdiction and authority in electric power will shift strongly to the U.S. Federal Energy Regulatory Commission (FERC) and U.S. Department of Energy (DOE).
 Loan guarantees and investment tax credits will encourage the development of new clean-coal and nuclear facilities.
 The requirement for common reliability standards and for the identification of key transmission corridors will increase the level of transmission investment and promote the consolidation of the industry.
 Production tax credits for renewable energy projects on line by the end of 2007 will accelerate the development of such projects.
 The Act’s energy efficiency provisions will stimulate the conservation of substantial amounts of energy and fuel.
 The first few clean-coal and gasification projects will be in a strong position to come to fruition by virtue of the direct grants and loan guarantees provided in the Act.

"Energy market participants and the regulatory community will need to move quickly to reflect these new incentives in their strategic planning," says Jeanne Townend, ICF Consulting Senior Vice President. "The Act’s central approach is to provide financial and other incentives rather than 'command and control' regulation to industry participants and consumers," adds Elliot Roseman, ICF Consulting Vice President. "In addition to incentives for traditional industry players, it provides a broad range of incentives for energy conservation and renewables, and billions of dollars for research and development on new technologies. It is a ‘let one hundred flowers bloom’ approach," says Mr. Roseman.

ICF Consulting (http://www.icfconsulting.com) is a leading management, technology, and policy consulting firm. Drawing upon extensive industry knowledge, distinguished professionals, and innovative analytics, the firm develops solutions to complex defense, homeland security, energy, environment, social program, and transportation issues. ICF Consulting’s approach to these issues is strengthened by its expertise in information technology, organizational improvement, program management, and communications. Since 1969, ICF Consulting has been serving major corporations, government at all levels, and multinational institutions. More than 1,200 employees serve these clients from key business centers in the Americas, Asia, and Europe.