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Fortnightly Magazine - April 15 1997

Mailbag

Why We Sign Those Secret Deals

Out here in the trenches, Professor William Shepherd's attempts to correlate anti-competitive pricing strategies with market dominance will take a while to sink in, mostly because the politics seem to get in the way of clear thinking. While his article ("Anti-Competitive Impacts of Secret Strategic Pricing in the Electricity Industry," Feb. 15, 1997, p.

New Hampshire Issues Final Plan for Electric Restructuring

Phillip S. Cross

PUC endorses direct access, plant divestiture and limits on recovery of stranded costs. Says order will not interfere with 1990 bankruptcy plan for Northeast Utilities. The New Hampshire Public Utilities Commission has issued its final plan for restructuring the state's electric industry, at the same time announcing what is believed to be the first formal policy decision by a state utility commission that would deny full recovery of costs left "stranded" by the transition to competition.

Released on Feb.

Trends

Christopher Seiple

According to a new study we have conducted at Resource Data International, the continuing transformation from a regulated industry to a fully competitive industry will create substantial opportunities for new generating companies. With the implementation of the Energy Policy Act of 1992 and the FERC's Orders 888 and 889, competition has been introduced into wholesale power markets. It is limited in scope, however, as utilities are still able to recover their fixed generation costs and embedded cost of capital from their captive retail markets.

Calif. Reaffirms Direct Access, But Pushes Public Purpose Programs

Phillip S. Cross

In a pair of orders issued the same day, the California Public Utilities Commission has denied requests to modify its plan for electric industry restructuring, as set out in its Final Policy Decision of Dec. 20, 1995 (see 166 PUR4th 1), but has initiated new "public service programs" to continue support for energy efficiency and low-income assistance efforts.

Joules

Stone & Webster will lead a consortia building a $109 million geothermal power plant for Amoseas Indonesia, Inc. The project calls for a second and third unit at the Darajat geothermal station, which taps into geothermal fields in the Garut Regency of West Java, Indonesia. Each unit has a capacity of 70 MW. The entire project was set to be finished by early 2000. Stone & Webster's portion of the contract is worth about $40 million.

Westinghouse Electric Corp. contracted to supply a barge-mounted power plant for the Port of Mombassa Power Barge Project in Malaysia.

Ohio Approves Centerior Rate Plan

Phillip S. Cross

The Ohio Public Utilities Commission has approved a rate plan for Toledo Edison Co. and Cleveland Electric Illuminating, under which the two electric utilities will freeze both base rates and fuel charges and agree to reduce their present investment in generating station and related assets.

The plan will take effect only if Centerior Energy Corp., the holding company for both utilities, is successful in its proposed merger with Ohio Edison Co. (The approved plan is similar in many ways to one the commission had authorized for Ohio Edison in 1995 (em see Case No.

New York Adopts Rules for ESCOs

Lori A. Burkhart

The New York Public Service Commission has adopted eligibility criteria rules for competitive retail energy services companies (ESCOs) seeking to sell electricity in the state.

The state created the March 5 ESCO rules as part of New York's "Competitive Opportunities" proceeding. The rules are consistent with the PSC's May 16, 1996 decision to open markets to wholesale competition in 1997 and to retail competition in 1998. Consumer protections used in the present monopoly environment will be retained during the transition to competition.

Maine Requires Separate Subsidiary for Noncore Services

Phillip S. Cross

Responding to numerous complaints concerning Bangor Hydro-Electric Co.'s entry into the security alarm market, the Maine Public Utilities Commission has set up guidelines for the utility's management of noncore services.

The commission ordered Bangor to: establish a separate subsidiary for its "noncore" utility activities; account for the activities "below-the-line"; and limit its use of certain customer information in providing the ancillary services.

Pa. Utilities File Pilot Plans

Lori A. Burkhart

Investor-owned utilities in Pennsylvania have filed their retail electric competition plans with the Pennsylvania Public Utility Commission to comply with recent legislation requiring customer-choice pilots for 5 percent of the peak load of the state's electric utilities.

PECO Energy Co. has filed a proposed electric choice retail pilot program that would allow about 90,000 residential, commercial and industrial customers to choose their electric suppliers as soon as October and no later than January 1998.

N.M. Approves "New Century" Merger

Phillip S. Cross

The New Mexico Public Utility Commission has authorized, subject to a series of conditions, the proposed merger of Southwestern Public Service Co.

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