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Fortnightly Magazine - July 15 1996

Frontlines

Bruce W. Radford

That's how fast the money pours in to the nation's Nuclear Waste Disposal Fund, one mill at a time. And the money is attracting attention, especially during this election year, with Congress running out of time before its planned August recess.

"Today has been extremely rich in terms of rumors," said Mike McCarthy, administrator of the Nuclear Waste Strategy Coalition, when I talked with him on June 28.

"The leadership in the House and Senate have met. People seem to be adjusting their schedules.

Foreign Waste Generates Heat

Lori A. Burkhart

The Nuclear Waste Strategy Coalition (em a group of 36 state regulatory agencies, Attorneys General, and utilities from 20 states (em has renewed calls for storage and disposal facilities since the U.S. Department of Energy (DOE) accepted 20 metric tons of radioactive waste from 41 countries. The waste derives from nuclear fuel originally provided by the United States to foreign power plants. The bulk, 19 tons, goes to the Savannah River Site in South Carolina; the Idaho National Engineering Laboratory receives the remainder. U.S. taxpayers pick up the tab: about $1 billion.

People

Richard D. Spencer, lately of General Electric Corp., has been hired by Equitable Resources, Inc. as v.p. and chief information officer. He was technology programs manager at GE.

Commonwealth Edison Co. has formed a new nuclear division management team. Thomas J. Maiman, senior v.p., is the top executive. He moves from the company's fossil division. Michael J. Wallace, another senior v.p., will market the utility on strategic nuclear business issues.

Financial News

Charles M. Studness

Despite two years of debate, little progress has been made toward a solution to the issue of stranded costs. And since the two sides have almost no common ground, any accommodation seems unlikely. Utilities that seek stranded-cost recovery appear to have the upper hand at present, but the stiffest resistance still lies ahead. The Federal Energy Regulatory Commission's Order 888 clearly favors utilities, but customer reaction signals a shift to another venue.

Mailbag

David P. Larson

I was amused by your "Headlines" item on the Reason Foundation's study calling for privatization of TVA and the power marketing administrations due to government subsidization and poor management (May 15, 1996, p. 16). If those were the two overriding issues, one could argue in favor of swapping segments and doing something different with the segment that costs the government the most.

In Brief...

Sound bites from state and federal regulators.

Economic Development Programs. Connecticut allows LDC to redirect margin-sharing funds from interruptible and transportation sales to support economic development and reduce residential hardship assistance balances. Caps annual program funding at $6 million. Rejects proposal that shareholder funds match ratepayer contributions. Docket No. 93-03-09 Reopening III, Apr. 25, 1996 (Conn.D.P.U.C.).

Demand-side Management.

Trends

Kent Knutson, Christopher Neil, and Albert Pearson

Over the past two and a half years, 10 large mergers have been announced, involving 21 investor-owned electric and gas utilities. Only the MidAmerican Energy merger has been completed, but the estimated market value of the pending mergers is an astounding $40.5 billion. Clearly, this recent wave of merger and acquisition (M&A) activity signals that electric utilities are positioning themselves for future competitive energy markets.

Results from Resource Data International's (RDI's) recent study, U.S.

N.Y. Isues Electric Restructuring Plan

Phillip S. Cross

The New York Public Service Commission (PSC) has issued a framework of goals and strategies for restructuring the electric industry in the state. The PSC directs all electric utilities in the state that have not yet initiated restructuring to file plans that will open the retail generation and energy-service markets to competition for all customer classes.

Market Structure (em PoolCo Model. The PSC adopted a "flexible retail PoolCo" model to ensure an orderly transition to retail competition.

Joules

United Parcel Service of America, Inc. (UPS) and Duke/Louis Dreyfus, LLC have struck a two-year deal to seek ways of lowering energy costs at UPS locations in 14 states.

Tokyo Electric Power Co. awarded a $500-million contract to GE Power Systems to design and build a 1,400-Mw advanced combined-cycle power plant. GE will supply four gas turbines, four steam turbines, and four generators. Additional equipment and services will be supplied by Foster Wheeler and three Japanese companies.

Electric Restructuring: To and Fro

Phillip S. Cross

Two more states at opposite ends of the country have acted substantively on electric utility restructuring (em one moving full speed ahead toward unbundling of wholesale "merchant" services, the other seeking to slow down the transition to retail wheeling.

The Nevada Public Service Commission (PSC) has released draft sections of a report on electric industry restructuring that was scheduled to go to the state legislature in June.

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