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News Digest

Fortnightly Magazine - August 2000

economy of and the economic development in the state of Ohio."

Seasonal Rate Design . The Vermont board authorized electric utility Central Vermont Public Service Corp. to redesign its rates to eliminate seasonal variations, which were put in place in the early 1970s to track the higher wintertime power costs then prevalent in New England.

It said the cost differential was due to the New England Power Pool's recently terminated "70/30" rule, which weighted the annual noncoincident peak more heavily by allocating cost responsibilities within the pool.

Retail Power Prices. The Texas PUC's "strategic plan" for fiscal years 2001-2005, issued June 1, promises by 2005 to keep the state's average price of electricity below the national average for any customer class. See www.puc.state.tx.us/about/stratplan/stratplan.cfm.

Door-to-Door Marketing. The Ohio PUC directed several natural gas local distribution companies to update their retail choice tariffs to include rules governing residential door-to-door solicitations by gas marketers.

But it turned down a proposal to require marketers to wear a company-specific uniform when making sales calls.

Pilot Programs. Virginia gave its final OK to interim rules for retail choice electric and natural gas pilot programs, but stressed that the rules may require alteration to accommodate full-scale retail choice and competition.

Renewable Energy. Arizona claims to be the first state to require electric utilities to obtain a portion of their electricity via renewable resources. It adopted a mandatory 0.2 percent renewables portfolio standard (RPS) starting January 2001, to increase each year up to 1 percent by 2005 and then max out at 1.1 percent in 2007.

Residential customers would help fund the RPS through a surcharge of up to 35 cents per month per account. Nonresidential customers would pay a monthly maximum of $13, but those posting a metered demand of 3000 kilowatts or more for three consecutive months would pay $39 per month per meter.

 

Power Markets

Regional Price Caps. In mid-July, the power industry was deeply divided over the idea of mandatory price caps for electricity in various regional spot markets around the country.

  • California. Late in the evening on July 6, the board of governors of the California ISO failed to pass a resolution to lower the price cap from $500 per megawatt-hour to $250 per megawatt-hour in the ISO's markets for real-time ancillary services and for intra-zonal congestion management. It voted 12-9 in favor of the move (with one abstention), but fell one vote short of the required majority. (Earlier, on June 28, the board of governors had voted 16-4 to strengthen the price cap from $750 to $500, effective July 1 through Oct. 15. A bid that same day to cut the cap to $250 had failed by a 12-12 vote.)
  • New York. On June 30, at the direction of its board of directors, the New York ISO asked the FERC for authority unilaterally to implement temporary bid caps of $1,300 per megawatt-hour in certain markets administered by the ISO. The board stressed its "philosophical aversion to any form of price control." But it urged the bid caps as an interim solution