You've heard talk lately about the convergence of electricity and natural gas. That idea has grown as commodity markets have matured for gas and emerged for bulk power.
But some economists take a different view. They see the real convergence occurring between electricity and telecommunications. I'm not talking about the "smart house" or fiber-to-the-whatever. Instead, how is the product is created? Electric utilities and telephone carriers share some common attributes (em a product you can't control, inventory you can't store, and a nonlinear transmission network tying it all together (and probably underpriced) that creates economies and value. The Internet provides the classic example: All network and no product.
Scott Neitzel, a member of the Wisconsin PSC, puts it this way: "The obligation to serve will convert to an obligation to connect. Utilities will simply energize the wires."
Read the Tea Leaves
Early last month, at EXNET's Ninth Annual Utility Mergers and Acquisitions (M&A) Symposium, held as usual at the Plaza Hotel in New York City, I grabbed a seat at lunch and listened to Commissioner William L. Massey's thoughts on merger policy at the FERC. Just one day earlier, on January 31, the FERC had released its order denying immediate approval of the Primergy merger between Wisconsin Electric Power Co. and Northern States Power Co. (Docket No. EC95-16-000).