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Fortnightly Magazine - March 15 1995

Frontlines

Bruce W. Radford

This fight is for the heart and soul of regulation everywhere. The Federal Energy Regulatory Commission (FERC) won the first round on February 22, but I think there's more to come.

The fight involves incentives for nonutility generators (NUGs). It also touches on PURPA (em the Public Utility Regulatory Policies Act of 1978 (em which guarantees a market to cogenerators or power producers (QFs) who qualify. But more important, this battle involves regulatory philosophy.

FERC Slams Tennessee Gas on Order 636

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has accepted and suspended tariff filings made by Tennessee Gas Pipeline Co. (TGP), ordering its staff to convene a technical conference on various issues related to TGP's post-restructuring compliance (Docket Nos. RP95-88-000 and RP95-112-000). The issues under investigation include capacity release, storage, and scheduling, as well as TGP's proposed $118-million rate increase. The FERC noted that TGP's customers "have expressed a high degree of dissatisfaction" with service from TGP. Commissioner James J.

People

Thomas L. Fisher, president of NICOR Inc., will become CEO at the company's annual meeting on May 3. He also is expected to become chairman in December, succeeding Richard G. Cline. Fisher, 50, joined NICOR's principal subsidiary, Northern Illinois Gas Co., in 1967, became president and CEO in 1988, and has served in a number of executive positions.

PECO Energy Co. president Corbin A. McNeill, Jr. will assume the additional position of CEO at the company's April 12 annual meeting. Joseph F.

Wisconsin "Comparable" Network Service Moves to FERC

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has reviewed network transmission tariffs filed by Wisconsin Public Service Corp. (WPS) and Wisconsin Electric Power Co. (WEPCO) in compliance with a Wisconsin Public Service Commission (PSC) order requiring a FERC tariff that provides network service comparable to the service the utilities reserve for themselves. The case arose out of applications filed at the PSC by four utilities in late 1990 and early 1991.

Gas May Find New Futures in Kansas

W. Lynn Garner

The Kansas City Board of Trade has asked the Commodity Futures Trading Commission (CFTC) to approve a natural gas futures and options trading contract for a summer launch. The designated delivery point is the Permian/Waha Hub in West Texas, operated by Valero Transmission Co. Kansas City Board chairman Don Hills says the western gas futures contract is necessary because gas prices differ significantly across the country, due to seasonal weather extremes and the diverse origins of supply.

Financial News

Charles M. Studness

The process of determining how to implement utility competition is often cast as a struggle between two opposing camps: shareholders and ratepayers. There are, of course, two other major players, managements and regulators. The bipolar view tacitly assumes that shareholder and management interests coincide, and that regulators have customer interests at heart. Neither assumption is altogether valid. Shareholder interests deviate from management interests in important ways, just as the interests of the entrenched regulatory bureaucracy diverge from the public interest.

Nuclear Waste Still Home Less

Lori A. Burkhart

The Mescalero Apache Tribe has rejected a proposal by a consortium of electric utilities to create a temporary nuclear waste storage site on tribal lands in Mescalero, NM. According to Northern States Power Co. chairman James Howard, the coalition will increase its efforts via federal legislation, or its lawsuit against the Department of Energy: "While we are encouraged by recent industry legislative developments, we also are hopeful that the new spirit being expressed by the members of the 104th Congress will refocus attention on a monumental consumer problem." (em LB

Making Sense of Peak Load Cost Allocations

Thomas Michael Power

Usage of utility services is rarely uniform across the day, month, or year. Dramatic increases in loads often appear at particular times of the day or in particular seasons of the year. Telephone utilities may choose not to meet extreme peak demands, but electric, natural gas, sewer, and water utilities usually do not enjoy that option. Failure to meet peak demands can lead to catastrophic consequences for both the customer and the utility, and can draw the attention of regulators.

Williams to Pump Cash Into Transco

W. Lynn Garner

To further their pending merger, the Williams Companies Inc. has offered to reduce Transco Energy Co.'s cost of capital via a $950-million shot in the arm. The merger will create the second biggest U.S. pipeline company in terms of pipeline miles, but the largest in terms of gas delivered (about 4 trillion British thermal units annu-ally). The recapitalization plan, however, must first be approved by the Securities and Exchange Commission.

Court Reject FCC's Flexible Pricing Again

Phillip S. Cross

The Federal Communications Commission (FCC) has been rebuffed yet again by the courts in its effort to relax tariff filing requirements for nondominant common carriers. The U.S. Court of Appeals for the District of Columbia Circuit thwarted the FCC's latest attempt, rejecting proposed rules that would permit the nondominant carriers to file a range of rates rather than fixed rates tied to a schedule of charges.

The courts had earlier overturned a series of FCC rulings.

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