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Fortnightly Magazine - November 1 1997

Kilowatts by Choice, Ready or Not

Lori M. Rodgers

A state-by-state look at retail competition.

RHODE ISLAND'S CUSTOMER CHOICE PROGRAM FOR LARGE-industrial and government consumers is five months old. California consumers will see retail choice on Jan. 1. New York, Illinois, Idaho and Washington have pilot programs well under way. And a statewide pilot program was set to begin this month in Pennsylvania.

Yet retail choice may prove vulnerable in New Hampshire (em the one state that has shown the greatest commitment to retail choice.

Idaho Reviews Surcharge for Conversation Research

Phillip S. Cross

The Idaho Public Utilities Commission has rejected a request by Idaho Power Co. to include a "public purpose charge" in ratepayer bills to fund its participation in the Northwest Energy Efficiency Alliance.

The utility said that the goal of the new organization is to transform existing energy markets to permit improvements in energy use efficiency without the need for long-term utility incentives.

The commission permitted the utility to capitalize and defer the costs of its investment in the organization until additional information is available.

Unbundling Capital Costs: It Doesn't Add Up

Robert G. Rosenberg

G+T+D=? Why the sum of the future parts is greater than the present whole.

GENCO, TRANSCO, DISCO. IF THAT IS the future, then rates collected formerly by the integrated electric company (em with its generation, transmission and distribution functions (em will have to be determined again for each segment. One aspect of these rates (em the cost of capital (em has generated significant controversy.

Electric Pilot Uses Tariff Rate, Energy Credit

Phillip S. Cross

The New Jersey Board of Public Utilities has approved a pilot program for Jersey Central Power and Light Co. that will allow some of the utility's electric customers to choose a private energy supplier and then compare bills with and without retail competition.

JCP&L, an electric utility doing business as GPU Energy, serves more than 11,900 mostly residential customers in Monroe, N.J., the targeted town.

Frontlines

Bruc W. Radford

THE POSSIBILITIES ARE ENDLESS," SO THE ADS SAY.

But what about a hostile bailout? I wouldn't have believed it myself until the news arrived, forcing me to rewrite this column at press time.

Imagine: Enron offering to reimburse PECO Energy for $5.4 billion in stranded costs, while taking on the role as the electricity provider of last resort for southeast Pennsylvania.

No doubt you have already read a half-dozen news stories about Enron's play for PECO. The details should sound familiar; the Philly papers were filled with lively quotes. On Oct.

California PBR Plan to Yield Savings

Phillip S. Cross

The California Public Utilities Commission approved a performance-based ratemaking plan for Southern California Gas Co. that could yield substantial savings, which the company is required to share with customers.

The PUC said the proposed merger of the utility's parent, Pacific Enterprises, and Enova Corp., parent company of San Diego Gas & Electric Co., should improve efficiency and benefit ratepayers.

People

AT Washington Water Power, Bobby Schmidt was appointed director of the company, and Paul A. Redmond announced his retirement as chair and CEO. Redmond started with the company in 1965. Previously, Schmidt worked as an independent trader in Chicago.

MDU Resources Group Inc. has promoted Martin A. White from senior vice president, corporate development to president and CEO. White, who has been with the company since 1991, will replace retiring president H.J. Mellen Jr.

Robert L. Goocher was promoted to president of AGL Resources Service Co. from executive vice president and COO.

LDCs Examine Hedging to Stabilize Gas Costs

Phillip S. Cross

Expressing concern about price volatility in the natural gas market, New Jersey, Virginia and Michigan regulators have directed local gas distribution companies to try fixed-price contracts and other hedging instruments. This would allay risk in wholesale gas supply portfolios and protect residential ratepayers from price swings common in the winter heating season, regulators said.

The growing popularity of fixed-price and other financial instruments to hedge against price spikes follows two winters of volatility noticed by regulators nationwide.

New Jersey.

Joules

ENRON International has begun building a $150-million, 80-megawatt independent power project in Piti, Guam. Enron signed a 20-year energy conversion agreement to develop the baseload, slow-speed diesel plant by January 1999. In an unrelated deal, Enron Corp. selected Stone & Webster for engineering, design and procurement for two independent power producer plants in the United Kingdom. The 790-MW, gas-fired, combined-cycle plant in Lincolnshire is set for commercial operation in March 1999.

Duke Energy Power Services Inc.

Carrier Balks at Pricing Set for Local Service

Phillip S. Cross

Further opening the local telephone market to competition in the state, the Michigan Public Service Commission has established guidelines for pricing unbundled network elements and set a wholesale rate for bundled local service.

The local exchange carrier, Ameritech Michigan, complained that the combined price of all unbundled services could fall lower than than the bundled wholesale rate.

The commission adopted a total-service, long-run, incremental cost study to calculate the new rate offerings.

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