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News Digest

Transmission & ISOs
Fortnightly Magazine - June 1 2000

Council of the City of New Orleans filed a complaint at FERC seeking amendments to the Entergy System Agreement.

The PSC and the city council alleged that benefits achieved through coordinated operation of the Entergy System would be lost once retail competition begins in Arkansas and Texas (as is planned in each state for Jan. 1, 2002).

According to the PSC and the city council, "Retail competition cannot reasonably and fairly be implemented in some jurisdictions served by the Entergy System, but not others, unless the System Agreement is modified."

Among other points, the agreement bars the signatories from selling capacity off the Entergy system without first offering the capacity at cost to the other Entergy subsidiaries. The PSC and city council said that benefits such as economy pool energy, reserve capacity, and fuel mix diversity could be lost to Louisiana consumers once capacity from the Texas and Arkansas subsidiaries is taken out of the cost allocation equation.

In fact, the Arkansas legislation (Sec. 23-19-108) requires any Entergy subsidiary in the state "to consult" with the state PUC and its staff on changes to the agreement that may be "necessary or appropriate." Also, the PSC and the city council noted that at a meeting held Aug. 6, 1999, the Entergy Operating Committee had agreed to move toward amending the agreement, and to require any Entergy subsidiary operating in a state that implements retail access "to cease participation in the System Agreement at the time such access occurs."

As of April 27, Entergy had not answered the complaint, but state PUCs from Arkansas and Mississippi had intervened. The Louisiana PSC and the New Orleans City Council defended their decision to file a complaint rather than seek an alternative dispute resolution, noting that they had met in December with PUCs and regulators from nearby states, but had been unable to reach a consensus on how to proceed.

 

Studies & Reports

Customer Switching. By the end of the year, at least two-thirds of the industrial load of the three major Pennsylvania utilities operating within the PJM ISO will have switched to competitive supply, according to recent predictions by XENERGY Inc. in its new "Retail Energy Foresight" publication.

But the consulting firm adds that many retail energy market sectors across the nation can expect to see dips this summer before resuming steady growth in cumulative switch rates.

XENERGY also predicts that switching in the New Jersey PSEG market will surpass switching for some Pennsylvania territories, jumping from 2 percent to 7 percent for residential and 18 percent to 24 percent for nonresidential customer load by year-end.

Currently, the report says, switch rates span from a low of 0.1 percent for residential customers in Massachusetts to a high of 67.3 percent for industrial customers in Pennsylvania's GPU territory.

Power Consumption Growth. Consulting firm Citizens for Pennsylvania's Future reports that vastly different rates of growth in electric usage among Pennsylvania utilities will dramatically affect the prospects for consumer savings, renewable power products, and system reliability, as the growth rates will force changes in kilowatt-hour competitive transition cost