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Fortnightly Magazine - May 1 1995

Perspective

Leonard S. Hyman

How do American electric utilities differ from water companies, telephone companies, airlines, insurance firms, food processors, newspapers, steel mills, and other industries in the United States? "They produce electricity and the others don't," you answer. Maybe, but the others can produce electricity, too, if they want to.

Marketing & Competing

David A. Spainhoward and David E. Schultz

With the Clean Air Act Amendments of 1990 (CAAA) come many complex decisions for electric utilities. By now the majority of utilities have decided how they will comply with the clean air guidelines and acid rain program limits, at least for Phase I. But for those utilities that have selected coal switching as the preferred method of complying with the law, the task gets more complicated. Burn expensive low-sulfur coal and bank or sell allowances? Or burn just enough low-sulfur coal to meet the rules, and no more?

MFS Asks FCC to Open the Local Loop

Lori A. Burkhart

MFS Communications Co. (MFS) has petitioned the Federal Communications Commission (FCC) to order monopoly local exchange carriers (LECs) to open access to the "local loop" for competitive telephone companies at a cost-based rate. The MFS "Open Loop Initiative" seeks to speed development of local telephone competition and to provide a choice of local carriers.

The local loop is that part of the local telephone network that physically connects the customer's premises to the LEC central office.

Illinois Avoided Cost Statute in Line with PURPA

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has ruled that an Illinois statute did not require rates above avoided cost for wholesale sales by qualifying facilities (QFs), and so did not violate the Public Utility Regulatory Policies Act (PURPA) (Docket No. EL95-27-000).

The statute at issue requires a utility to buy power from qualifying solid-waste energy facilities at the utility's retail rate. But the statute includes an offsetting monthly tax credit, which prevents a utility from paying more than its avoided costs.

Implementing Transmission Access: Getting the Genie Out of the Bottle(neck)

Richard P. Felak

In tales of old, it was just a matter of finding the bottle, rubbing it the right way, and VOILA! (em out came the genie to grant our wishes. But that myth hasn't worked to fully open up transmission (em at least not to date. Some say the devil is in the details, but these details are truly devilish.

FERC to Flesh Out Comparability

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has set for hearing issues related to a proposed, open-access transmission tariff for point-to-point service in Citizens Utilities Co.'s (CU) Arizona service territory. It also approved CU's agreement requiring a transmission customer, Aha Macav Power Systems, Inc., to pay a $190,000 contribution in aid of construction (CIAC) to interconnect to CU's grid (Docket No.

Electric Reliability: How PJM Tripped on Gas-fired Plants

John Hanger

Just after the sun rose on January 19, 1994, the mercury fell to new record low temperatures. Lights went out, furnaces shut off, and computer screens went blank in parts of Delaware, Maryland, New Jersey, Virginia, Washington, DC, and Pennsylvania.

EPA Awards Bonus SO2 Allowances

Lori A. Burkhart

The Environmental Protection Agency (EPA) has awarded 1,349 acid rain bonus allowances to 10 utilities: City of Austin; New York State Electric and Gas; Orange and Rockland; Western Massachusetts Electric; United Illuminating; Cincinnati Gas and Electric; Massachusetts Electric; Granite State Electric; Narragansett Electric; and Long Island Lighting. The awards are based on utility energy efficiency and use of renewable energy.

Pursuant to the acid rain requirements of the 1990 Clean Air Act Amendments, an allowance licenses the emission of one ton of sulfur dioxide (SO2).

Using Hourly System Lambda to Gauge Bulk-power Prices

William C. Booth and Judah L. Rose

The electric power industry lies in the midst of major change, including a shift to market-based wholesale prices. Market players and regulators will recognize that competition requires a shift in thinking on key issues such as resource planning before the market is developed enough to provide adequate price information.

IEP Challenges BRPU Ruling

Lori A. Burkhart

The Independent Energy Producers (IEP), a Sacramento-based independent energy advocacy group, has announced that it will petition for the Federal Energy Regulatory Commission (FERC) to reconsider its ruling that the California Public Utilities Commission (CPUC) violated the Public Utility Regulatory Policies Act (PURPA) by requiring two utilities to purchase power at above avoided costs (FERC Docket Nos. EL95-16-000 and EL95-19-000).

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