Let's hope that by now we all prefer market solutions to government mandates. Markets are generally more efficient and equitable. Recent experiences with deregulation for airlines and telecommunications have vindicated Adam Smith's notion that the "invisible hand" can prove superior to regulation.
Unfortunately, this knowledge offers little comfort today to natural gas pipelines (em even to those companies not saddled with a surplus of transportation capacity.
Applicants can only hope that a prompt review won't be even more difficult
By a unanimous vote, on December 18, 1996, the Federal Energy Regulatory Commission (FERC) issued Order No. 592, stating how it intends to evaluate utility mergers. The anticipation has ended, yet those hoping for a new approach and a quicker review are bound to be disappointed.
Order 592 is a "Policy Statement." As such, it only announces intentions; it imposes no new obligations and is not subject to judicial review until implemented in a specific case.
Bonneville Power "Subscriptions" Seen Among Sticky Issues
A panel of governors in the Pacific Northwest expects to issue a plan this month that proposes a restructured Bonneville Power Administration, primed for the regional free-market electric economy.
The panel would act on a steering committee report that resolved pressing energy matters in the Northwest. But the committee report left open other issues that some say could leave the BPA's future in doubt.
Models can overcome a key oversight (em
that both supply and demand affect competition.
This past December, the Federal Energy Regulatory Commission (FERC) issued a policy statement describing important changes in how it will evaluate proposed mergers under the Federal Power Act's public interest standard. These changes should lead to significant improvements (em not only in the evaluation of mergers, but also for other matters that affect market power, %n1%n including industry restructuring and market-based pricing.
Dakota Gas Plant. FERC reverses law judge, ok's settlement on rates for synthetic natural gas produced at the Dakota Gasification plant. Commissioner James Hoecker terms result "unhappy," citing jurisdictional constraints: "I feel we are supporting a resolution in this case that otherwise would not be in the public interest." Dkt. Nos. RP93-100-000 et al., Dec. 18, 1996.
Reactor Designs. NRC certifies two new designs for nuclear reactors: ASEA Brown Boveri-Combustion Engineering System 80+, and General Electric Nuclear Energy Advanced Boiling Water Reactor.
Each assumes a vertical breakup, but watch out for securitization.
It can prove difficult to detect any overt difference of opinion among financial credit rating agencies. That appears to be the case in today's electric utility industry, where Moody's, Duff & Phelps, and Standard & Poor's each predicts that a breakup of the vertically integrated utility is now virtually inevitable. The result, they say, will leave us with an industry made up of disaggregated high-risk power generators, and lower-risk companies engaged in transmission, distribution, and other related services.
Having decided that California's three major investor-owned utilities (IOUs) exert greater market power in generation and transmission than the IOUs had let on in detailed studies filed last summer, but finding no purpose in asking for a second round of hefty documents, the Federal Energy Regulatory Commission (FERC) has decided to explore options for mitigating such market power before approving the proposal by the IOUs (Southern California Edison Co., Pacific Gas & Electric Co., and San Diego Gas and Electric Co.) to form a Power Exchange (PX) and Independent system Operator (ISO).
Prometheus paid dearly when he stole fire from the gods and gave it to man, but his courage paid off. Fire now belongs to the people. So should electricity, says New York state Judge Joseph Harris, of Albany, who ruled last fall that state regulators could force open New York's electric industry, but warned against hidden favoritism:
"Prometheus," wrote Harris, "in breaking the monopoly of the gods and by giving electrical energy to mankind ... [should] not be demeaned by a mere transfer of that monopoly to the lords of industry.
A Georgia-based consumer advocacy group, the Campaign for a Prosperous Georgia (CPG), has asked the Securities and Exchange Commission to halt a move by The Southern Company to use up to 100 percent of its retained earnings for a $2.75 billion acquisition of 80 percent of the Asian utility company, Consolidated Electric Power of Asia.
Among other claims, CPG wants the SEC to reconsider an April 1996 decision that granted an exemption to The Southern Company from the provisions of the Public Utility Holding Company Act (PUHCA).
Worries in Congress.
