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Fortnightly Magazine - March 15 1996

New Gas Storage Service Lets Customers Hedge

Lori A. Burkhart

Southern California Gas Co. (SoCalGas) has unveiled a "transaction-based" storage program that allows customers to arrange one storage transaction at a time and to negotiate storage fees.The program was approved by the California Public Utilities Commission in November. Previously, most storage customers had to choose between basic, long-term, or auction services, which required differing storage commitments that ranged from a few months to 15 years.

Off Peak

As this snapshot look at the seven utility mergers announced since January 1995 demonstrates, traditional patterns are no longer being followed. A number of the announced transactions did not fit squarely into either the merger-of-equals model (little or no premium, fairly even equity and board split, CEO succession plan) or the acquisition model (high premium, disparate equity and board split, no CEO succession plan).

Top 14 R&D Players Named in Report

Lori A. Burkhart

TECC Group, Inc. has identified 14 U.S. investor-owned electric utilities (IOUs) as major players in research and development (R&D), with expenditures in excess of $10 million. TECC's report, U.S. Electric IOU Research, Development & Demonstration Expense Comparisons 1994, places Southern California Edison at the top of the list ($64 million) and PECO Energy Co. 14th ($11 million). In between, in descending order, we find: Consolidated Edison Co.

Competitive Intelligence: An Antidote to Downsizing

Glenn E. Montgomery and James P. Spiers

Cutting employees

may be less than healthy, unless you're ready to replace them with technology.

As competition intensifies, increasing numbers of executives are realizing that customer service may have a more important role now than just placating regulators. After all, the broad spectrum of customer service is the principal way (em other than rates (em to differentiate a utility product and the utility itself.

Perspective

Stephen Maloney

A century ago, Congress conveyed valuable public property to certain entrepreneurs to serve the public interest. In exchange, these entrepreneurs agreed to carry the nation's principal means of communication at fair cost and, of course, serve the national defense.

In 1850, with a commitment to move the mail at fixed rates and freely transport federal troops hither and yon, a swath of public land was granted to the Illinois Central to connect Chicago with Mobile.

Information Technology: It's Not Just Business Anymore

Karl Rabago

Computer systems must move beyond insular needs (billing and work orders)

to marketing opportunities. But few regulators really understand.

Everywhere we see the march of technology, especially computer and information technology. Pagers hang on nearly every belt or bag, PDAs have replaced notebooks and portfolios, computers sit on more home desks, and every major magazine and almost every daily paper has sections dedicated to news about the Internet.

Marketing & Competing

James R. Pierobon

"This legislation represents a piecemeal approach to a problem which requires deliberate and thoughtful consideration .... [It] could lead to 'cream-skimming,' which would result in increased rates for the remaining business and residential customers" (Lincoln Almond, Governor of Rhode Island).

Words to this effect are likely to grace vetoes of retail wheeling legislation by governors and maybe the President of the United States for the foreseeable future.

Who Stands to Benefit?

Thomas J. Makarewicz

Economists often seem enamored of economic efficiency, honoring its merits while decrying the lost benefits of inefficient outcomes. But really ... what's the harm in a little inefficiency? Well, the harm may be more real than we recognize.

"Play Ball" Telecom Bill Winds Up, Delivers

Joseph F. Schuler, Jr.

"What now?"

That was the question on the minds of representatives from local telephone exchange carriers (LECs) who huddled at the United States Telephone Association (USTA) National Issues Conference days before legislators passed sweeping telecommunications legislation that would affect everyone's future.

But the question went beyond what would become law when President Clinton fulfilled his promise to sign the bill.

Price Reform and Universal Service: Not Mutually Exclusive

Peter K. Pitsch and David P. Teolis

When the Federal Communications Commission (FCC) instituted the subscriber line charge (SLC), telephone household penetration rates actually increased, even though local rates rose when the SLC was rolled in.

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