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News Digest

The California ISO offers a plan, but some fear that rules themselves are the problem.
Fortnightly Magazine - March 15 2001

1999 to about 45 percent by 2005.

The study described how the deficit in gas delivery capacity in turn would threaten availability of electric generation and put a premium on distillate fuel oil as an alternate fuel. For instance, the study noted that about 5,900 megawatts of gas-fired generating capacity possessed air quality permits allowing for limited use of back-up fuels. But it added that the system in 2003 likely could not make up the loss of gas delivery capacity under one of the more serious scenarios, such as a loss of compression on the Algonquin or Tennessee systems.

The study was conducted by Levitan & Associates. It examines the adequacy of the five primary interstate pipelines serving the region—Tennessee, Iroquois, Duke Energy (owner of Algonquin and Maritimes & Northeast) and Distrigas. Steady—State Analysis of New England Interstate Pipeline Delivery Capability, Jan., 2001.-L.A.B.

Michigan Power Markets. The Michigan PSC has released a status report on electric competition in that state, asserting that the existing electric transmission grid in the region is not adequate to support a vibrant competitive wholesale market in electricity, and urging the FERC to resolve the various conflicting proposals to create a regional transmission organization in the Midwest.

"In our view," says the PSC, "FERC's preoccupation with the California situation has caused it to neglect the need for an effective regional transmission organization in the Midwest."

The report concludes that electric competition in Michigan "remains in its infancy." It calls on the electric industry to expand transmission capacity and add more generating plants, but makes no recommendation for new state legislation. .-L.A.B.

Distributed Generation. Shipments of small electric generation devices, or microturbines, grew more than 300 percent last year, according to Primen, an energy market intelligence company that is an affiliate of EPRI.

"The surge in shipments last year demonstrates that the industry is leaving the research and development phase and entering true commercial markets," said Nicholas Lenssen, Primen senior director of distributed generation and author of the microturbine research.

"This may signal that the long-anticipated rapid growth spurt for microturbines has arrived, though uncertainty remains over just how big ... the industry eventually will become."

The research found that microturbine shipments grew to 1,200 units in 2000, and Primen forecasts that between 3,500 and 5,500 units will be shipped this year, providing between 200 megawatts and 300 MW of electricity. See www.primen.com.-C.J.L.

Business Wire

Calpine Corp. has signed a $4.6 billion, 10-year, fixed-price contract with the California Department of Water Resources to provide electricity to the state. The deal, one of the largest power sales agreements in the history of the independent power industry, commits Calpine to sell up to 1,000 megawatts from its portfolio of new and existing energy centers, beginning with a delivery of 200 MW in October and building up to 1,000 MW by 2004.

Tennessee Gas Pipeline Co. , a business unit of El Paso Energy Corp., has begun an open season for its Connecticut-Long Island Lateral Project, which will provide new transportation service from the company's mainline facilities in Massachusetts to Long