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News Digest

Fortnightly Magazine - March 1 1999

Future issued its report to that state's governor. The report notes that while the state's rates historically have been about 10 percent less than all other states in the Northeast, its "competitive edge is eroding" as the rest of the region moves to competition. The report includes speculative data showing the state's electricity prices rising above those of the surrounding region through the next decade. "Report to Gov. Howard Dean, M.D.," Dec. 18, 1998, is available

Utility Bankruptcies. Outlining a series of technical conferences, the Vermont Public Service Board opened an investigation on whether current efforts to restructure the electric industry might push one or more Vermont utilities into bankruptcy, and what effect that might have on consumers. It noted that the state's largest utilities might face financial difficulties should they become unable to recover costs they incur to buy power from Hydro-Quebec. Docket No. 6140, Dec. 11, 1998 (Vt.P.S.B.).

Pilot Programs. Reviewing a pilot program for retail choice in electricity, New Jersey regulators rejected a bid by Monroe township (joined by the Division of Ratepayer Advocates) to shift risk of loss under the plan to the current monopoly utility distributor, GPU Energy, or the plan's designated third-party energy supplier, Conectiv.

The state board accused Monroe of looking for subsidies and guaranteed savings for the plan, which it said had not worked (it featured a shopping credit of 2.767 cents per kilowatt-hour). It advised that price risk should lie with the energy marketer or customer. Docket No. EO98080759, Dec. 15-16, 1998 (N.J.B.P.U.).

Ahead in California. Hearings and arguments were set as follows before the California PUC in several rulemakings governing electric, natural gas and water utility restructuring.

Gas Restructuring. Evidentiary hearings, Jan. 28-29, Feb. 10 and March 1-5, on the future regulatory structure for the state's natural gas industry. R. 98-01-011 (Cal.P.U.C.).

Electric Reliability. Preliminary hearing conference, March 4, on a rulemaking to develop standards for electric system reliability and safety. R. 96-11-004 (Cal.P.U.C.).

Water Utility Restructuring. Oral argument, Feb. 11, on rules and guidelines for privatization of publicly owned water utilities and treatment of excess capacity held by investor-owned water companies. R. 97-10-049

Power Markets

Futures Contracts. The Commodity Futures Trading Commission on Jan. 12 approved an application by the New York Mercantile Exchange, filed last November, to trade electric futures and options based on delivery at the western hub of the Pennsylvania-New Jersey-Maryland (PJM) Interconnection. President R. Patrick Thompson said NYMEX was looking forward to introducing the contracts during the next few months and soon would announce a launch.

Bilateral Power Exchanges. Ohio-based FirstEnergy Corp. and California-based Automated Power Exchange Inc. have announced plans to develop jointly an electric power exchange, owned and operated by APX, to allow FirstEnergy to buy and sell wholesale power within its service area.

The computerized APX exchange, expected to open by June, would provide electronic access to forward prices for electricity for hourly or daily anonymous purchases and sales, up to one week in advance of delivery.

APX and FirstEnergy also have agreed to jointly develop software that would allow certain commercial