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News Digest

Fortnightly Magazine - July 1 1998

by folding a subsidiary into NGO. After the merger, NGO will become a cooperative, and its 27,000 customers will be owners and members of the integrated utility. Total customers post-merger will top 46,000.

By late May, the agreement had been OK'd by the board of each partner, but still required the blessing of the Public Utilities Commission of Ohio, among others. A shareholder vote on the merger was set for August. The expanded company, selling electricity, propane and natural gas, would serve 17 counties in east-central Ohio. LRE believes it will be the first co-op in Ohio to merge with an investor-owned natural gas utility.

Power Markets

RETAIL FRANCHISING. UtiliCorp United and PECO Energy

Co. have ended their marketing alliance, EnergyOne LLC, citing absence of a nationwide regulatory framework for retail choice.

Established a year ago, EnergyOne was formed as a 50-50 partnership. It was envisioned to link branded non-energy products and services (such as long-distance telephone and home security) with traditional energy services from gas and electric utilities.

According to PECO Chairman Corbin A. McNeill Jr., the slow and inconsistent development of a truly national market was forcing the entire industry to rethink competitive strategies. "Frankly, we know of no one in this business who can predict just when our nation might open up to the kind of competition we envisioned, but we feel it makes greater sense for us to attack this market differently now, rather than wait for it to wake up," McNeill said.

INTERNATIONAL POWER SALES. Virginia Electric and Power Co. has asked the U.S. Department of Energy to allow it to sell electricity to Canada, either its own surplus generation or power purchased at wholesale. It would export electricity over international transmission facilities owned by 14 utilities and power cooperatives, including Bonneville Power Administration, Niagara Mohawk Power Corp., Northern States Power, Minnesota Power & Light Co., and Detroit Edison.

Electric Generation

POWER PLANT AUCTIONS. The California Public Utilities Commission has OK'd the sale by Southern California Edison Co. of its Long Beach power plant to NRG Energy Inc. and Destec Energy Inc., even though the $28.8 million sales price equaled only about 30 percent of book value (roughly $98 million in September 1997). Edison said it had received no satisfactory bids for its Long Beach or Ormond plants during the first round of bidding, but the PUC approved the Long Beach sale, finding no danger of market power concentration and that Edison had accepted the highest bid. Decision 93-03-077, Application 96-11-046, March 26, 1998 (Cal.P.U.C.).

SUMMER RELIABILITY. Officials from ISO New England and various New England electric utilities have held six news conferences at various locations to explain preparations being made to ensure adequate electric supplies in the region this summer. Officials warned that power shortages are possible if the region experiences an extended heat wave, high demand for electricity or an extraordinarily high amount of unplanned outages. It said parts of the Midwest, Ontario and Alberta also could experience

problems this summer. Transmission constraints will limit how much relief other regions could offer.

ISO New England