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Fortnightly Magazine - July 15 1996

Discounts Defined

Flexible pricing schemes generally fall into four categories:

Load Retention Rates. Can prevent a customer from exiting system, either by relocating or choosing to self-generate. If retail competition is allowed, load retention rates can prevent customers from choosing a different generation company.

Economic Development Rates. May attract new customers to a service territory, or encourage existing customers to expand operations and boost demand. Differ from load retention rates by purporting to create jobs.

Flexible Rates (Flexrates).

Primergy Merger Raises Claims of Market Power

Lori A. Burkhart

Madison Gas and Electric Co. (MGE) has asked the Federal Energy Regulatory Commission (FERC) not to approve the proposed merger of Wisconsin Energy Corp. (WE) and Northern States Power Co. (NSP) to form "Primergy." MGE claims that the merger would not only subject Wisconsin's electric consumers to higher prices, but severely impair competition.

According to Mark Williamson, MGE senior vice president of energy services, the Primergy merger would create market concentration in generation and transmission, resulting in market power abuses and anticompetitive conduct.

NARUC Turns Gaze Inward

After a year and two task forces, the National Association of Regulatory Utility Commissioners (NARUC) could soon have a new structure.

"With all these industry changes, we need to look internally, as commissions are also being asked to change, to see what changes will compliment what's happening out there in the industry," says John Gawronski, NARUC spokesman.

Nader Group's Restructuring Plan Puts Consumers First

Joseph F. Schuler, Jr.

The belief that competition will take over for regulation is a "fairy tale approach" to

electric industry restructuring.

That's what Matthew Freedman, energy policy analyst, announced at a Public Citizen briefing on the advocacy group's Power for the People, a "public interest blueprint" for the new electric market.

"Competition in the electric power industry could either usher in a new era of cleaner, more affordable energy services or prove to be the biggest customer shakedown of our time," the report reads.

PUC Overhaul: Sacrificing Consumer Services?

As state public utility commissions (PUCs) undergo restructuring, consumer advocate services also face possible cutbacks.

California PUC:

In California, the CPUC's Vision 2000 plan would affect various independent departments, such as the Division of Ratepayer Advocates (DRA), Office of Administrative Law, and Department of Policy. It would recast those agencies into eight divisions: customer services (consumer complaints), human resources, information services, energy, telecommunications, rail safety, carriers, and water.

Weinberger, Utilities Give Qualified Support to Renewables

Joseph F. Schuler, Jr.

Former Defense Secretary Caspar W. Weinberger told a gathering of utility and renewable energy executives that he supports conservation efforts to reduce the risk of another major oil crisis, but that the government's role in renewables should be limited.

"I think you're not going to get more energy efficiency simply by spending more money," Weinberger said at the Seventh Annual Energy Efficiency Forum sponsored by the U.S. Energy Association and Johnson Controls in Washington, DC.

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.

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