The Maryland Public Service Commission (PSC) has decided against requiring regulated utilities to obtain prior approval for nonutility activities or diversification plans. The PSC also rejected a...
Electronic Trading: Toward a Mature Power Market
River Project, Calpine Corp. and Edison Source.
Finding the Big Dogs
So, who are the companies trading the most energy? Well, it depends.
The companies in the chart below are registered as power marketers with the FERC. (As of Sept. 4, the FERC had approved rates for at least 324 registered power marketers; rates were pending for another 43 applicants.) Some, as noted, are utility affiliates. Yet nearly 60 other investor-owned utilities are also trading huge amounts of power using FERC-approved (or pending) market-based rates (plus a small profit margin) without setting up separate subsidiaries.
The PECO Power Team, located in a Philadelphia suburb, bought and sold 40,000 gigawatts in FY '96, a representative says. The Power Team (em a staff of 65 that includes accounting, administrative, legal and trading personnel (em was set up in 1994 as a division of PECO Energy Corp. Why didn't PECO set up an unregulated affiliate? "We weren't required to be a separate subsidiary," and strategically the Power Team fit into the company's business plan to be a division, company rep David Grier explains.
Consolidated Edison Co. of New York, Inc., opened a new trading floor in its Manhattan headquarters in September. ConEd, which has been trading bulk power since 1993 through its energy trading department, known as The Megawatt-Hour Store, received FERC approval for a market-based rate tariff March 14. In 1996, TMHS sold 3.9 million megawatt-hours of electricity. That volume would have put them in the number 13 spot for the year ahead of Southern Energy but behind Dupont, "if we had been classified as a marketer" then, says Ken Bekman, a former TMHS proprietor at ConEd.
The FERC also approved ConEd's unregulated power marketer subsidiary, ProMark Energy Inc., in March. ProMark, which was formed initially to make gas deals, changed its name Sept. 24 to Con Edison Solutions. As an energy services company, ConEd Solutions will expand beyond just energy trading, although that will continue, says Michael Forte, general manager of Con Edison's energy trading department. (A recent agreement between ConEd and the New York PSC allows the use of the parent name with unregulated subsidiaries.)
Forte asserts that although ConEd Solutions will be able to serve customers outside the company's traditional service territory, the primary focus of both TMHS and Con Edison Solutions will continue to be "to buy low-cost power for our own franchised area customers1/4 We will continue to invest in the wholesale trading function," he continued, "as it makes sense to lower costs for our customers." F
Lori M. Rodgers is an associate editor with Public Utilities Fortnightly.
OASIS: More Than a Mirage
THE FERC-mandated, electronic open-access, same-time information system is used for scheduling transmission. Industry players cannot purchase power on OASIS, although that day may come.
Before that can happen, however, most industry participants agree the speed and ease of scheduling and handling next-hour reservations needs improving. (See "Inside Washington," Sept. 15, p. 52). Because of the slowness and difficulty participants have encountered, many transactions reportedly are worked off-system, which tends to negate the "electronic" aspect of the