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Fortnightly Magazine - January 1 1998

Frontlines

Bruce W. Radford

A SUNDAY AFTERNOON, NOT THREE WEEKS 'TIL CHRISTMAS, and I was holed up at Washington's Mayflower Hotel, attending a workshop (no Santa, no elves) on electric transmission pricing.

I wasn't alone, however. At least 200 others had filled the hotel's East Room near to capacity to hear about such topics as nodes, zones, access charges and load duration curves. The 5th National Electricity Forum, sponsored by the U.S. Department of Energy and the National Association of Regulatory Utility Commissioners, was under way.

People

COMED appointed S. Gary Snodgrass as vice president of human resources for ComEd and its parent company, Unicom Corp.

The board of directors of Bay State Gas Co. elected Debra P. Cornish vice president of culture development. Previously, Cornish held positions as manager, compensation and employee relations, cost analyst and external reporting analyst.

MCN Investment Corp. promoted Joseph L. Roberts Jr. to president from vice president of MCNIC Pipeline & Processing Co. Roberts was also elected to the MCNIC board of directors. He remains vice president of MCNIC Power Co.

News Digest

Lori A. Burkhart

MAINE YANKEE PRUDENCE. The Maine Public Utilities

Commission will investigate the prudence of Maine Yankee Atomic Power Co.'s decision to close its nuclear plant permanently.

The PUC said Oct. 22 that unrecovered investment in Maine Yankee combined with the loss in plant value could cause additional stranded assets for plant owners Central Maine Power Co., Bangor Hydro-Electric Co., and Maine Public Service Co. If imprudent action is found, the PUC said it would take steps to ensure that Maine's electric ratepayers do not bear any related costs.

Reliability in Flux

NERC Assessments are Fine, but DOE Task Force Gets Last Word

Bruce W. Radford

Go figure. Plans to shut down nuclear generation in Ontario should not affect electricity supplies this winter within the United States, despite early rumors of chaos and rising natural gas prices. However, an unexpected slowdown in coal delivery by some U.S. railroads has "seriously reduced" on-site stockpiles of coal at some generating plants in three regional reliability councils - ERCOT, SERC and SPP - particularly those dependent on coal from the Powder River Basin in Wyoming.

Restructuring Hearings: Much Work Is Left Congress Lacks Consensus; Administration Offers No Input

Lori A. Burkhart

AT HIS 21ST HEARING ON FEDERAL ELECTRIC Restructuring, Rep. Dan Schaefer (R-Colo.), chairman of the House Subcommittee on Energy and Power, said the two-day proceedings were the "beginning" of developing consensus on legislation.

Fellow subcommittee members spoke out on competitive issues at the Oct. 21 hearing, which highlighted their lack of consensus. The Clinton Administration was represented by the Department of Energy's Deputy Secretary, Elizabeth Moler, who said nothing about its restructuring plans.

Off Peak

WHO HAD THE BEST ANNUAL REPORT COVER in the utility industry in 1997? It's a tough choice. Several covers emerged from the masses of standard-issue, black-type-on-white (or off-white) backgrounds. Which leads us to Public Utilities Fortnightly's first annual report cover "award" for the best of in a variety of untraditional categories.

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Unbundling: An Excuse for Cost Shifting?

Jim Lundrigan

The article "Risk and Rates for the Regulated Distribution," by Maloney, McCormick, and Tyler (Sept. 1, 1997, p. 26) was interesting. For people with the vested interests of the authors, unbundling offers the golden opportunity of reducing regulated rates without actually having a formal rate decrease. That comes about by shifting on paper as much revenue as possible from the regulated disco to the competitive genco, while of course leaving all the costs with which that revenue is associated within the disco.

Unbundling, Take Two: No Effect on Risk

Michael T. Maloney

Robert Rosenberg in his comment on our paper makes a fundamental error regarding financial risk. (Rosenberg, "Unbundling Capital Costs: It Doesn't Add Up," Nov. 1, 1997, p. 46, responding to Maloney, McCormick, and Tyler, "The Wires Charge: Risk and Rates for the Regulated Distributor," Sept. 1, 1997, p. 26.)

Rosenberg claims that as utilities spin off into separate wires and generating businesses, risk will increase in both lines of business.

Retail Choice: A Race to the Bottom

Gerald A. Norlander

A recent article laments the slow pace of retail competition for residential gas sales in New York ("Blue Flame Blues: Gas Pilots Sputter at Burnertip," Oct. 1, 1997, p. 22). Besides the meager financial incentive for a New York residential customer to switch gas companies, there is another factor contributing to the slow headway being made by gas marketers: The New York Public Service Commission failed to establish a level playing field with just and reasonable terms of sale.

ISOs: A Grid-by-Grid Comparison

James F. Wilson

BY THE START OF 1998, FOUR INDEPENDENT SYSTEM operators already were in operation and conditionally approved: ISO-NE, PJM and California by the FERC and Texas by the state PUC. Three more were either pending before the Federal Energy Regulatory Commission or expected to be filed in the coming months (New York, Midwest and IndeGO in the Northwest). Three additional efforts to develop ISO proposals were under way (DesertSTAR, MAPP and SPP). The Southeast is now the only large region of the contiguous United States without an ISO concept.

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