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Fortnightly Magazine - October 1 1996

Perspective

Mark Drazen

To what extent should the independent system operator (ISO) and the spot market (Power Exchange) remain separate? Thinking about how the ISO must operate leads to certain conclusions.

Of necessity, the ISO will operate a noncontract market. That is, the ISO will match some supply and some demand that are not covered by generator-customer contracts.

Off Peak

Nancy I. Day

California's CTC:

Light-handed or Light-headed?Customers didn't buy power on lay-away. So why should the CPUC exact interest?

In a recent dream, the Governor of California called to ask if I would accept an appointment to serve on the California Public Utilities Commission (CPUC). Of course I thanked him and said I was extremely flattered by the offer. However, I inquired, didn't he have an opening on the parole board or air resources board? You see, I know entirely too much about the thankless work of the CPUC.

Four Olive Branches

John R. Hanger

Where others see conflict, a Pennsylvania commissioner finds a peace offering,

not a grab for power.

The jurisdictional issues posed by Order 888 continue to breed tension between federal and state officials. Unfortunately, most of this tension too often elevates form over substance. This jurisdictional tension shifts the focus of decisionmaking from securing the benefits of competition to preserving regulatory turf.

FERC Weighs in on Muni-Lite Proposals

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has issued two orders that indicate for the first time how it would implement the prohibition against "sham" transactions under the Energy Policy Act. The separate decisions involve requests by two municipalities for orders requiring utilities to wheel power.

In one order, the FERC denied a request by the City of Palm Springs, CA, for electric transmission service from Southern California Edison (SCE) under sections 211 and 212 of the Federal Power Act (FPA) (Docket No. TX96-7-000).

Frontlines

Bruce W. Radford

Labor Day found me trudging around in one of those "big box" discount stores, looking for a sale on a new refrigerator. Out West, California lawmakers spent the holiday putting together their own discount plan (em this one promising rate cuts for the state's residential electric consumers, funded by "rate reduction bonds" backed by a state-owned bank for economic development.

Either way you cut it, the holiday proved worthy of its name.

FERC Requires Qfs to File Rates for Noncompliance

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) announced that qualifying facilities (QFs) that fail to meet the standards needed to retain QF status will be required to file wholesale rates for sales during the period their facilities do not comply (Docket Nos. EL94-45-001 and QF88-84-006).

The FERC asked QFs to be as vigilant as possible. The new policy states that if a QF fails to comply with the regulations, fails to receive a FERC waiver excusing the lapse, and then returns to noncompliance, the QF will be required to file rates for the noncompliance period.

People

Ronald L. Adams, an executive from Transcontinental Gas Pipeline, was named president of CNG Transmission Corp. He replaces L.J. Timms, Jr., who retired.

Lee Elder was hired by GE Nuclear Energy as manager of market development. Elder was g.m. of nuclear marketing and technology for Black & Veatch and started a joint venture between the two companies to service boiling water reactors.

The Oklahoma Corporation Commission has hired Richard L. Heck, a former U.S.

FERC Proposes Capacity Release Changes

Lori A. Burkhart

The FERC has proposed major revisions to the secondary market for interstate capacity, offering interstate pipelines and holders of interstate capacity the opportunity to participate in experimental programs to help determine the effectiveness of the proposed changes (Docket Nos.

Mailbag

I was surprised that the news item "N.Y. Issues Electric Restructuring Plan" (Courts and Commissions, 7/15/96, p. 45) neglected to mention one of the most significant aspects of the restructuring order at the New York Public Service Commission (PSC). In its May 20th order, it adopted the goal of wholesale competition by early 1997, and retail access by early 1998.

As the PSC stated: "A main benefit of setting a timetable is that it would give parties a goal and expectation that should move the process along.

Constellation Merger Set for Hearing

Lori A. Burkhart

A divided Federal Energy Regulatory Commission (FERC) has set for expedited hearing the proposed merger between Baltimore Gas and Electric Co. (BGE) and Potomac Electric Power Co. (PEPCO) to form "Constellation Energy Corp.," to determine its effect on competition (Docket Nos. EC96-10-000 and ER96-784-000).

It will also consider the applicants' proposed open-access transmission rates. An administrative law judge will certify the record to the FERC by November 1.

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