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Fortnightly Magazine - October 1 1997

Baltimore Court Keeps Merger Case

Lori A. Burkhart

The chief executive officers of Baltimore Gas and Electric Co. and Potomac Electric Power Co. have expressed disappointment over a July 28 decision by a Baltimore County judge denying a motion to return their proposed merger case to the Maryland Public Service Commission.

The judge's decision will keep the merger proceeding before the Baltimore County Circuit Court.

"As we previously stated and made very clear to the court, we cannot merge in accordance with the terms of the current PSC order," said BGE Chair Christian Poindexter and PEPCO Chair Edward F. Mitchell.

TVA, Utilities Settle Lawsuit

Lori A. Burkhart

Five utilities suing the Tennessee Valley Authority for allegedly making electric sales to unauthorized third parties for resale outside its service territory have agreed to a joint settlement.

The settlement calls for TVA only to sell or deliver power to authorized exchange power companies. TVA agreed not to knowingly enter any exchange power transactions if the purchaser buys that power intending to resell it at wholesale to an unauthorized entity. TVA will reiterate its contract requirements with its exchange power companies.

Northeast Utilities Settles Nuclear Management

Lori A. Burkhart

Northeast Utilities Co. has reached an agreement in principle with its shareholders who had claimed that certain NU trustees and officers had failed to manage prudently the affairs of the utility, causing problems for its nuclear power program.

The settlement calls for insurers of those trustees and officers named in the suit to pay NU $25 million, less attorney's fees. NU has agreed to certain corporate governance changes. The agreement was reached after more than eight months of mediation by retired U.S. District Judge Robert C.

Perspective

Daniel William Fessler

To the discomfort of my predilections, I cannot deny that which is just.

In the June 1 issue of PUBLIC UTILITIES FORTNIGHTLY, Ken Rose ("Securitization of Uneconomic Costs: Whom Does It Secure?" p.

Blue-Flame Blues: Gas Pilots Sputter at Burnertip

Joseph F. Schuler, Jr.

As marketers discover, some LDCs keep a strong grip on the residential class.

Michael Meath of Agway Energy Products has a dream. A dream to tap the 4.5 million natural gas customers in New York State, supplying commodity and then, other services.

New York state unbundled gas rates in March 1996, with new tariffs approved later that year. Since then, just 11,000 customers out of 4.5 million (em less than half a percent (em have decided to use aggregated transportation service.

Not all New York utilities have filed customer aggregation programs, however.

FERC Ends Summer Session Without Fanfare

Lori A. Burkhart

No clear signal as yet from new chair James Hoecker.

The Federal Energy Regulatory Commission had a busy day on July 30, but observers will have to wait until the fall to learn of any new wide-ranging policy initiatives planned by incoming chair James Hoecker, who has now succeeded Elizabeth Moler in the top post.

The end-of-summer meeting (em and Commissioner Donald F. Santa Jr.'s last (em was marked largely by a lack of controversy.

Regional Power Markets: Roadblock to Choice?

David E. Wojick

Competition abounds at wholesale, but retail is another story.

Will geography, politics and regional economics stand in the way of real choice for electric consumers at the retail level? Consider this tale of two power players.

One competitor, the Indiana Municipal Power Agency, is proud of itself. In its annual report, IMPA says that open access and competition in the wholesale market allowed it to trim wholesale rates for power it delivered to member distribution companies in 1996. "The results were remarkable," the report reads.

In Brief...

Sound bites from state and federal regulators.

Electric Exit Fees. New Jersey board exempts General Motors Corp. from any exit fees imposed in the future to collect electric utilities' stranded costs, in connection with GM's plans to build a $2.2-million gas-fired cogeneration facility (PURPA-qualified) at its Linden auto assembly plant. GM said it had checked all laws and regulations and had found no current obligation to pay exit fees. Docket No. ET96090669, June 24, 1997 (N.J.B.P.U.).

Residential Gas Rates. Arkansas OKs settlement allowing Arkansas Oklahoma Gas Corp.

Scarce Resources, Real Business or Threat to Profitability?

Leonard S. Hyman, and Marija Ilic

All three may apply, especially if regulators go wrong and let ISOs make the business decisions.

Electricity transmission is a real business. With more than $50 billion of net plant, another $3 billion annually in capital expenditures and yearly operating income that could reach $5 billion per year under normal circumstances, the power grid is roughly twice the size of the natural gas pipeline industry. One would never know that from current events, however. Utility management treats transmission as an inconvenient stepchild.

Gas Pilot Programs Gain Steam

Phillip S. Cross

Over the summer, a handful of states approved gas pilot programs that will introduce choice of supplier to residential, and small commercial customers in preparation for the heating season. The decisions welcome the expansion of customer choice to smaller users, but pay careful attention to operational details such as who controls storage and upstream pipeline capacity to performance balancing services.

New Jersey. Finding greater than expected public interest, the New Jersey Board of Public Utilities has authorized New Jersey Natural Gas Co.

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