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Fortnightly Magazine - February 1 1999

Frontlines

Bruce W. Radford

Some see utilities fixing prices under competition. Really? I'm shocked.

Did you hear the one about the 10,000 percent rate increase? Ask FERC chairman James Hoecker or his colleague, Curt Hébert. They'd be happy to tell you. They don't even need their own joke writers. This story, you see, is absolutely true.

It seems that Virginia Electric & Power Co. wanted to squeeze just a little more profit from its Kerr-Henderson transmission line.

People

Albert V. Ruggiero was elected vice president for South Jersey Industries Inc. Ruggiero also serves as senior vice president, corporate development for SJI's principal subsidiary, South Jersey Gas Co.

The Bonneville Power Administration announced four new senior vice president positions. Harvey Spigal will return to general counsel after heading BPA's transmission functions for the past two years. BPA's corporate group will be headed by Steve Wright. Paul Norman was named permanent head of the power business line. Mark Maher will head the transmission business line on an acting basis.

News Digest

Lori A. Burkhart, Phillip S. Cross and Beth Lewis

State PUCs

Distributed Generation. California opened a rulemaking proceeding to consider regulatory reforms in electricity distribution service, with a possible focus on distributed generation. The commission emphasized that its intent was not to define new policies, but to gather information. Comments are due March 17, and the commission intends to consider a proposal from the assigned commissioner this summer. Rulemaking 98-12-015, Dec. 17, 1998 (Calif. P.U.C.).

Gas Transportation Rates.

Mail

Sarah McKinley

Technology is mature, says trade group exec for distributed power.

The general reader might receive the false impression upon reading Joseph F. Schuler Jr.'s article on distributed generation that distributed generation is limited to emerging technologies like microturbines and fuel cells (see "Distributed Generation: A 'Hot Corner' for Venture Capital?" Public Utilities Fortnightly, Oct. 15, 1998, p. 40). Indeed, this is a common misconception.

Perspective

Branko Terzic

Deregulation, you say? We still haven't seen any.

Let's begin with a quiz. We'll use the multiple-choice format, developed at the University of Wisconsin during the 1960s to address overcrowding caused by the World War II "baby boom." Choose only one of the following 10 possible answers. Be careful. It's tougher than it looks.

Question: What is meant by the term electric restructuring?

A. To provide all consumers with retail access to multiple "energy" providers.

B. To separate the ownership of power generation from other functions.

C.

Special Report

Joseph F. Schuler, Jr.

Hoecker, Trebing see advantages in economies of scale.

Will New York's proposed independent system operator fall victim to the FERC's evolving RTO process?

"It has some conceivable drawbacks," FERC Chairman James J. Hoecker told attendees at the 30th Annual Institute of Public Utilities Conference. "One is that it's a single-state ISO and in the final analysis, regional transmission organizations probably need to cover broader geographical areas."

Hoecker used the forum at the Dec.

Off Peak

Water rates continue to increase - by more than 10 percent in some cities.

The costs of improving water quality to meet mandates are proving too large to be diluted unnoticed into consumers' bills, many agencies are finding.

While the trend of increased water costs continues with U.S. rates up an average of 2.6 percent from 1997 to 1998, a new study reveals that some cities experienced increases of more than 10 percent.

MAPP, MISO & PJM: Three Regions Fight Over Wires, Prices and Profits

Bruce W. Radford

Tales of bad faith, cold feet and price manipulation.

Lollipops"/fn1/ and "loopholes." "Islands" and "peninsulas." Utilities have invented a colorful new lexicon to explain what's happening at power pools and regional transmission groups. Yet the basic issue remains familiar: How to gain a competitive advantage.

Electric Restructuring Legislation: Handicapping the 106th Congress

Joseph F. Schuler, Jr.

Will inaction in the Senate and House prompt FERC to move ahead?

About 36 bills with the word "electric" in them were introduced in the 105th Congress. According to Capitol Hill and industry association staff, the 106th Congress, officially begun Jan. 6, appears likely to see fewer restructuring bills, but steadfast champions.

Likelier still are developments outside of Congress that will shape energy policy and perhaps beat legislators to the punch.

Price Spike Redux: A Market Emerged, Remarkably Rational

Robert J. Michaels and Jerry Ellig

The post-mortems on last summer's price spikes in the Midwest are in. At least three studies of the event diverge in their conclusions:

First, on Sept. 24 of last year, the staff of the Federal Energy Regulatory Commission found the root cause of the spikes in extreme weather and unexpected outages. It observed no direct evidence of market manipulation and concluded that the events were unlikely to recur.

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