July 1, 2001
L.A. Loves a Loophole
There's no getting around it...
LG&E?s Don Santa: Choice in a Low-Cost State
IN APRIL 1997, AFTER FOUR YEARS AS A COMMISSIONER WITH the Federal Energy Regulatory Commission, Donald F. Santa, Jr. announced that he would leave the public sector at the expiration of his term and join LG&E Energy Corp. as vice president and deputy general counsel. Included among his first assignments at LG&E was management of legal matters for LG&E Marketing, the national energy marketing subsidiary of LG&E Corp.
Roger Hale, chairman and CEO for LG&E Energy, praised Santa as "instrumental" in shaping the nation's energy policy and in "writing the ground rules for competition" in the energy industry.
Santa had begun his stint at the FERC when the commission was working hard at implementing Order No. 636, the natural gas restructuring rule, and thus had received an early grounding in gas issues. Later, when the FERC began tackling electric restructuring under its eventual Order 888, Santa drew on his gas experience, which he said gave him insight on gas-electric convergence issues. As he was fond of saying, "I was converging when converging wasn't cool."
As for his move to the private sector, Santa saw it as a chance to keep up with industry changes. "I have had the unique opportunity to be a member of the FERC during one of the most exciting periods in the agency's history," he noted. "Still, regulation is to some degree removed from the reality of the marketplace¼ Consequently, I am excited at the prospect of getting outside the Beltway¼ where the real changes are occurring."
As if to emphasize Santa's words, on March 25 has new employer won approval from the FERC for a merger with Kentucky Utilities, on assurances that the new company would, among other things, continue to participate in the Midwest Transmission System Operator, Inc. By May 4, LG&E and KU announced that they had closed their merger "in record time" for a deal between two franchised electric utilities involving review under the FERC's 1996 merger policy statement.
Addressing a group of lawyers at an American Bar Association meeting, Santa saw it all as ironic. "As late as last July," he said, "I was voting on merger orders at the [FERC], and by last September, I was counseling [the two applicants] and preparing their section 203 application. If only I knew then what I know now."
Spending Shareholder Dollars
LG&E is a new member of the Partnership for Customer Choice. What led to this decision?
LG&E hasn't been a member of the Edison Electric Institute for about two years. I think our CEO, Roger Hale, said the company didn't want to be spending LG&E's shareholder dollars promoting a message on restructuring that he didn't think was LG&E's message. Hale advocated a federal choice mandate with a date shortly after the year 2000, and supports a comprehensive restructuring bill. When I joined the company last fall, one of the things that was put on my "to do" list was to identify ways that the company could more effectively participate in the restructuring debate. When LG&E surveyed the alternatives, the Partnership for Customer Choice came