From the President, USAEE






Lori Smith Schell

Founder and President

Empowered Energy

(Durango, CO)


There’s probably never been a more exciting time to be part of the world of energy.  For better or worse, energy is often front-page news.  Everyone you talk to has an opinion on how the world’s energy problems should be solved, though the solutions offered are often ill informed or based on little factual evidence.  The USAEE has a critical role to play in ensuring that the debate surrounding energy policy is based on the best information available and that a healthy debate on competing policies can be held to give everyone the chance to be heard.

As part of that process, final preparations are being made for the upcoming 32nd USAEE/IAEE North American Conference, being held in Anchorage, Alaska, from July 28-31, 2013.  The chosen theme of the conference is “Industry Meets Government:  Impact on Energy Use & Development” and there are several plenary sessions that have a decidedly Arctic theme, along with a number of plenary sessions on developments in electricity markets and oil & natural gas markets.  A very special offsite reception will be held on Tuesday evening at the Alaska Heritage Center, providing additional time to connect with colleagues and friends, including an offsite reception at the Alaska Heritage Center.  You can view the full conference program at  I encourage you to register soon as the early bird rate ends on May 31st.

Read more: From the President, USAEE

From the Editor

Robert Eric Borgström

Advisor on Energy Regulatory Policy and Management

(Washington, DC)



Dear Colleagues,

As our USAEE President writes, it is an “exciting time to be part of the world of energy”.  In that respect, I am greatly appreciative of the interesting contributions made to this issue of Dialogue by members from around the USA.  However, we are just scratching the surface of a vast reserve of information and experiences.  The objective of Dialogue is to be an effective medium for sharing information about the research and case studies by USAEE members from all sectors of the energy economics community (business/consulting, government and academia, including students) as well as the activities of our organization.  I encourage all members of USAEE, as well as IAEE members in Canada and Mexico, to propose articles that will share with your fellow members the excitement that we all feel in being a part of today’s energy dialogue.

Read more: From the Editor

Contemporary Government-Business Relations via China’s Energy Sector

Contemporary Government-Business Relations via China’s Energy Sector

Xiaofei Li, Ph.D.

Asst. Prof., Dept. of History & Political Science

York College of Pennsylvania (York, PA)


China presents a most intriguing case since it has a market economy running atop a stagnant communist regime. Various models have been proposed to explain such government-business relationships, among which the “merchant-state dualism” best explains the complex situation in China. “Merchant-state dualism” is a hybrid relationship between the state and society that maintains state control over merchants, while giving them some autonomy. This article explores the interactions between the Chinese national oil companies and China’s government with regards to selecting certain oil investments in light of external effects of investing in politically sensitive countries. It thus highlights the political underpinnings and calculations behind China’s oil decisions, which sheds light on the merchant-state dualism in contemporary China. The interactions between government and business elites as China’s merchant-state dualism manifests itself in China’s energy sector either helps or hinders  Chinese national oil companies in competition for international project with non-Chinese companies.

Read more: Contemporary Government-Business Relations via China’s Energy Sector

Implications of FERC Staff Recommendation to Lower the Base ROE for Transmission in New England

Implications of FERC Staff Recommendation to Lower the Base ROE for Transmission in New England


Michael Kline, Principal

Berkeley Research Group, LLC (Washington, DC)


Barclay Gibbs, Principal

Berkeley Research Group, LLC (Washington, DC)


Duncan Anderson, Senior Associate

Berkeley Research Group, LLC (Washington, DC)


On September 30, 2011, a group of New England stakeholders filed a complaint with the Federal Energy Regulatory Commission (“FERC”) requesting that the Base Return on Equity (“ROE”) for New England transmission owners be reduced from 11.14 percent to 9.2 percent.[1] The stakeholders include several industrial groups, the Massachusetts’ attorney general, and other state regulators. In their complaint, stakeholders allege that “[d]ue to changes in the capital markets since the Bangor Hydro proceeding, the 11.14 percent Base ROE is no longer just and reasonable.”[2] The current rate of 11.14 percent was set in in the Bangor Hydro proceedings and based on market information from 2004 and bond yields from 2006.[3]

Read more: Implications of FERC Staff Recommendation to Lower the Base ROE for Transmission in New England

Back to the Future? The Evolution of the North American Natural Gas Market

Back to the Future?

The Evolution of the North American Natural Gas Market

Lori Smith Schell, Ph.D., ERP

Empowered Energy

Presented at the 4th ELAEE Conference, Montevideo, Uruguay: 8 April 2013


This paper discusses the impact of the “shale gas revolution” on the North American natural gas market.  Although the author recognizes that there are many different natural gas market hubs located throughout North America, all of the pricing discussed in this paper is tied to the Henry Hub, located onshore Louisiana and the pricing point for the New York Mercantile Exchange (“NYMEX”) natural gas futures contract.  Arbitrage potential requires that pricing at all natural gas market hubs throughout the extensive North American natural gas pipeline system rationalize with respect to pricing at the Henry Hub, making the Henry Hub price a good proxy as “the” North American market price.

Read more: Back to the Future? The Evolution of the North American Natural Gas Market

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  3. 32nd USAEE/IAEE North American Conference - Anchorage, Alaska: July 28-31, 2013
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