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News Digest

Fortnightly Magazine - August 2000

FERC had ordered removal of the 3.5-MW Edwards Dam on the Kennebec River in Augusta, Maine, but under a settlement, the license was transferred to the state of Maine, which already has removed the dam. Commissioner Curt Hébert dissented, arguing again that the order should be vacated because FERC has no authority to order dam removal.

Generation Divestitures. Potomac Electric Power Co. on June 7 announced an agreement to sell its electric generating assets to Southern Energy Inc. for $2.65 billion, subject to regulatory approvals. Included in the sale are four power plants and a combustion turbine located in Maryland and Virginia totaling 5,154 MW, purchased power contracts, and other facilities. PEPCO agreed to buy back power from its former plants for up to four years for its supplier-of-last-resort commitments.

Merchant Plant Interconnection. After it consults with electric utilities in the state, merchant plant owners and operators, and other interested parties, the staff of the Michigan PSC is to file a status report by Aug. 31 on standards for the interconnection of merchant plants with the transmission and distribution systems of electric utilities, before filing a final report by Oct. 2.

Studies & Reports

Power Outages. A report by Liberty Consulting Group to the Illinois Commerce Commission found that Commonwealth Edison Co.'s electrical system failed in summer 1999 because the company had not spent nearly enough money on maintenance and necessary system improvements in prior years.

The consultants found a culture of cost cutting that was so strong that between 1992 and 1998, Edison spent $225 million less than its cumulative budgeted capital spending for the period-even though customer load continued to grow. In 1995, two-thirds of Com Ed's management compensation incentive plan stressed cost reduction, the report said.

And while the utility's own backlog of substation maintenance projects and repair work mushroomed in 1998 and 1999, it sold electrical construction and maintenance services to third parties, using its own maintenance staff, Liberty noted. See docs.asp#ComEdLibPR.

Order 2000. ZE PowerGroup was to conduct initial client meetings in July and early August for a study on formation of RTOs and the impacts that FERC Order 2000 will have on the relationships among Canadian and between U.S. and Canadian electricity participants. Participants are to include both U.S. and Canadian representatives, including utilities and transmission owners, transmission operators, power marketers, government agencies, and trade and consumer organizations. See study/rto.html.

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