Unexpected price increases for natural gas during the past winter heating season have stimulated action by state regulators across the country. Most recently, North Carolina and New Mexico have...
the Federal Energy Regulatory Commission (FERC). I asked Davis about that.
"Last summer," says Davis, "the WPL board of directors traveled to Washington, DC, and met with Energy Secretary Hazel O'Leary and FERC Commissioner James Hoecker. Hoecker articulated Massey's view. But that's only two Commissioners (em they haven't yet attracted a third vote. But if they do we'll deal with it. There are enough electric utilities in the United States to support competition. Will the FERC change its merger guidelines? It's not a concern."
The Interstate merger would also combine utilities that now operate in different reliability councils (em The Mid-Continent Area Power Pool (MAPP) in Iowa, and the Mid-American Interconnected Network (MAIN) in southeast Wisconsin. Again, Davis sees no real problem: "Candidly, that issue will be decided by the Primergy merger. It's already on the table. MAIN has put off its discussions on its regional transmission group pending the FERC Mega-NOPR. Those issues will be resolved in other forums."
At Wisconsin Energy, Richard Abdoo supports deregulation of generation with a PoolCo and independent system operator (ISO) to manage a transmission network owned by the utilities. "We get a lot of flak about ISO's," says Abdoo, "But we already have them in our own region. The employees of MAIN represent an ISO. MAPP has one, and so does ECAR."
Some of that flak comes from Mebane at MGE: "If Primergy goes through, the new company will control somewhere between 50 to 60 percent of the transmission capacity into and out of Wisconsin. Under WEPCo's PoolCo idea, the persons running the transmission system will remain on their payroll. That's a facade. You've got to have an independent ISO."
But Mebane sees the Interstate deal a bit differently: "Those three companies have been mediocre performers. Their operations and transmission networks aren't well integrated. To integrate their networks, they'd have to spend millions of dollars."
MGE scored a victory of sorts on October 31, when Wisconsin's Electric Advisory Committee struck a deal with state legislators to delay discussion of electric deregulation until calendar 1996, which is an election year. As reported elsewhere, the Wisconsin Public Service Commission (PSC) will now follow a "go-slow" approach. At press time, the PSC was to issue a major ruling on electric restructuring on December 12, 1995.
Mebane says the Committee had considered about four or five distinct proposals, but that the majority supported the MGE coalition: "Our coalition isn't against competition. We just want some kind of regional control. Wisconsin can't deregulate without some sort of reciprocal arrangement from neighboring states."
Abdoo sees it differently: "My sense is that if Wisconsin opens up, then Minnesota will open up, Iowa will open up, and so will Illinois."
I asked Davis whether his Interstate deal marked a direct challenge to the Primergy merger. He demurred, but noted that Adboo had sent him a small gift when the Interstate merger was announced. "I wish he had sent me a Harley-Davidson," said Davis. I asked Mebane about that. He says Abdoo has been known to inspect his service territory astride his