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Cost management in the Utility Industry

This item is part of the Innovation in the Power Industry - April 2021 SPECIAL ISSUE, click here for more
Over the last century, electricity and clean energy have been at the forefront of U.S. priorities in meeting the public's energy needs. In each state, many companies provide energy under regulations issued by local state and government commissions. In New Jersey, power companies operate through the PJM interconnections (Pennsylvania, Jersey, and Massachusetts) [1] and are regulated by the Federal Energy Regulatory Commission (FERC) [2].
Local Jersey companies are extending capital throughout PJM with plans to carry out reliability projects, in order to better supply customers with electricity. The capital expenditures of local companies are in turn incorporated into the application for an increase in the base rate per $/kW.h (kilowatt.hour) that is charged to customers with the best electricity [1]. In this article, we will understand in more detail the important role of the cost engineer in such an industry.
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