Fortnightly Magazine - September 1 1997

California Identifies Diablo Canyon Sunk Costs

The California Public Utilities Commission has valued sunk costs for the Diablo Canyon nuclear generating plant at $3.287 billion. The ruling forms the basis for future ratemaking treatment for the plant assets by its owner, Pacific Gas and Electric Co., according to industry restructuring under way in the state.

The approved rate plan includes an overall rate freeze and a bond-financed 10-percent rate reduction for residential and small commercial customers. Both are called for under the state's new electric industry restructuring law (Assembly Bill 1890).

Byline: 
Phillip S. Cross
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Metering in Real Time: A New Cost Equation for Electric Utilities

Is it now worth the investment to install smart meters, complete with two-way communication?

The meter has always been the "cash register" in the basic operations of the utility business. Now it is also becoming a vital communications link, carrying information between a utility and its customers. The meter can supply information critical to customer retention and value-added marketing, as well as more effective system operations.

In choosing from among the wide range of metering options available today, a utility should find a technology that fits its business model.

Byline: 
Jack King
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Customers Come First

Bruce Radford's May 15 "Frontlines" (p. 4) commentary on the Sears Tower/QST cogeneration project misses the point. I would like to correct his misconceptions and clarify the issues by looking at them from a marketplace viewpoint rather than a utility-based viewpoint.

First of all, the Sears Tower's savings are more than an "allegation." QST's proposed cogeneration facility for the Sears Tower will reduce the cost of electric power supply to the tower by about $2 million per year compared to what it costs under ComEd's current rates.

Byline: 
J. Mark Elliott
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NJ Updates Plan to Modernize Phone Network

As it concluded its first review of an alternative rate plan for local telephone service, the New Jersey Board of Public Utilities approved a series of telecommunications network upgrades and associated network modernization program for Bell Atlantic-New Jersey.

The original rate plan, approved in 1993, had combined the promise of a modernized telephone infrastructure with rate deregulation for certain competitive services and a freeze on rates for residential phone service. (See, Re New Jersey Bell Tel.

Byline: 
Phillip S. Cross
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Meter Markets: A New Value Proposition

An interview with Ralph Masiello

and Sue Scott of ABB

The big, traditional projects in automated meter reading have really stalled, because utilities are no longer assured of a return on investment."

That warning comes from Ralph D. Masiello, vice president and general manager, ABB Power T&D Co. Inc., the leading manufacturer of electric meters in North America.

"We used to understand the economics of AMR. Just compare the cost of AMR against the cost of metering. But now the economics have changed.

Byline: 
Bruce W. Radford
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A Merger of Equals

While I read with interest and appreciated your story on electric and natural gas convergence ("Electric/Gas Convergence, Meter to Meter," May 1, 1997, p. 26), I must bring to your attention a misinterpretation concerning the proposed merger of Pacific Enterprises and Enova Corp.

In the second paragraph of your story, you said that Enova "is set to acquire Southern California Gas Co.

Byline: 
George I. Minter
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Mid-Atlantic States Set Standards for Natural Gas Marketers

Regulators in Pennsylvania and New Jersey have taken steps to address relationships between natural gas utilities, customers, marketers and brokers operating in their respective states, announcing policies to cover such topics as fitness requirements, marketing practices and consumer protection.

One question that continues to raise concern is price arbitrage by marketers during supply emergencies that might affect service to captive residential customers.

Pennsylvania.

Byline: 
Phillip S. Cross
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Public Power: An Inexpensive Insurance Policy Against Consolidation

An Editorial Response:

Some critics wants PMAs out of the electric business. But that could leave market power to a few, large monopolies.

Department of Energy Secretary Federico Peña observed in an address at the recent annual meeting of the Edison Electric Institute: "The [electric utility] industry is incredibly diverse, with investor-owned utilities, municipalities, cooperatives, the federal power system, independent power producers, marketers and others.

Byline: 
Alan Richardson
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Perspective

Uncle Sam buys a lot of power. Who supplies it may depend upon Article I, Sec. 8, Clause 17.

Today's intense competition to sell power should not overlook one large customer - the federal government. The Department of Defense alone consumed $1.4 billion worth of power in fiscal year 1994. Recently, one utility executive was quoted as saying: "We've got power marketers foaming at the mouth for DOD's business."%n1%n

Yet how does a marketer get the business of a federal agency, office or installation if retail wheeling is not mandated?

Byline: 
William A. Mogel
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N.Y. Restructures Gas Rates to Lure Competitive Supplies

The New York Public Service Commission has directed Consolidated Edison Co. to modify its gas transportation rates to more accurately reflect costs.

The commission said that the tariff revisions mark a "major step" for a service territory where competition between the utility and gas marketers had not yet developed.

Byline: 
Phillip S. Cross
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