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Fortnightly Magazine - February 1 1995

Forecasting New Gas Users

Alexander Lonshteyn

(SIDE SUBHEAD)

Each year hundreds of oil or electric customers call Boston Gas to ask about fuel-switching. What do they look for?A gas utility can boost sales only one way-by gaining new customers. And in today's slowly growing economy, conservation trends limit growth opportunities. The average household today uses two-thirds the energy of 15 years ago.

Financial News

Charles M. Studness

SIDE SUBHEAD

With no need for new capital, utilities have lost political pressure, exposing the regulatory compact as an illusion.Recovery of stranded investment today marks the central issue in the debate over electric utility competition. Unfortunately, the utility argument in favor of recovery is flawed.

Cost of Service Ignores Load Factor

Jim Lundrigan

In his recent article, "Cost-of-Service Studies: Do They Really Tell Us Who's Subsidizing Who?" (Nov. 15, 1994), Mark Quinlan proposes an alternative cost-of-service methodology. He claims that under current cost-allocation methods (and given adequate capacity to meet demand) a rate class with increasing sales subsidizes a rate class with decreasing sales.

International Opportunities

B. Victoria Brennan

Noting the growing global demand for new sources of energy, Congress tailored the Energy Policy Act of 1992 (EPAct) to make U.S. public utility holding companies more competitive abroad. First, it eased the Securities and Exchange Commission review of U.S. investment in foreign energy facilities. Second, it sought to expand U.S. participation in foreign energy-related projects to include U.S. technology as well as investment dollars.

Frontlines

Bruce W. Radford

In the energy industry, no question defies resolution more than electromagnetic fields (EMF).

The Edison Electric Institute (EEI) reported in late December that electric utilities have contributed close to $80 million for EMF research since the early 1970s. And new efforts are taking shape.

Defending Against EMF Property Devaluation Cases

George Brandon

Late last year, New York's highest court, the Court of Appeals, ruled that the owner of property adjacent to a utility's high-power electrical transmission lines could seek damages for a decrease in the market value of the property caused by the fear that the power lines might cause cancer, even if such a fear was not medically or scientifically reasonable.

People

Irl F. Englehardt, president and CEO of Peabody Holding Co. Inc., was elected to a two-year term as chairman of the National Coal Association. Steven F. Leer, president and CEO of Arch Mineral Corp., was elected vice chairman. Englehardt will be the 49th industry executive to serve as chairman in NCA's 77-year history.

Gerald E. Putman was made senior v.p. of a new customer service business unit at New York State Electric & Gas Corp.

CPUC Delays Electric Rate Decision

Phillip S. Cross

The California Public Utilities Commission (CPUC) has decided to adopt a "wait and see" approach in general rate proceedings for utilities affected by its generic industry restructuring case. Southern California Edison Co. asked the CPUC to postpone ruling on marginal cost, rate design, and cost-allocation issues in its 1995 general rate case until it issues a policy order in the restructuring proceeding.

DOE Prepares to Tighten its Belt

W. Lynn Garner

The Department of Energy (DOE) will definitely be leaner in the future, if not outright abolished by the newly Republican Congress. To get a jump on Republicans as well as to help pay for a middle-class tax cut, President Clinton proposes to cut DOE's budget by $10.6 billion over the next five years-a 10-percent cut in the agency's $18-billion annual budget.

Energy Secretary Hazel R.

DC Modifies Preconstruction Review

Phillip S. Cross

The District of Columbia Public Service Commission (PSC) has amended regulations governing the scope of its authority over facilities constructed outside of the municipality. Late last year, the District of Columbia Public Service Commission (PSC) issued comprehensive regulations governing the preconstruction review of utility power plants, transmission lines, cogeneration facilities, and independent power production facilities.

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