While NAESB and NERC struggle over the issue, North America steadily drifts toward unreliability.
Time is running out. It's been more than two years since the North...
utilities to comply with its requirements." . -B.W.R.
Meanwhile, the City of New Smyrna Beach, Florida, petitioned the U.S. Supreme Court to review an April 2000 ruling by the Florida Supreme Court that effectively banned construction of merchant power plants in that state, by finding that state law required plants to serve retail, not wholesale load, in order to win a certificate of need. -L.A.B.
Millstone Nuclear Sale. Connecticut OK'd the sale of Millstone nuclear units 1 (closed), 2 and 3 to the Dominion subsidiary Dominion Nuclear Connecticut, Inc. for $1 million, $443.4 million ($507/kW), and $853.3 million ($791/kW), respectively.
It accepted Dominion's proposal to delay decommissioning of unit 1 until 2050 (to coincide with units 2 and 3), and rejected arguments by consumer advocates that decommissioning trust funds were overfunded, thus avoiding any ruling on the proposed legal arguments that ratepayers were entitled to the excess funds. -B.W.R.
Fossil Plant Auctions. The California PUC denied authority to Southern California Edison Co. to auction off to AES Corp its 56 percent share in the 1580-MW, coal-fired Mohave Generating Station located in Nevada, even though AES would have paid about five times the estimated net book value.
According to the PUC, the sale would have placed "dependable capacity" generating at 3.5 cents per kWh outside commission control. "Changed circumstances require a rethinking past policies," added the PUC. .
Studies and Reports
Texas Stranded Costs. On Jan. 11, the Texas PUC released its report to the state legislature on competition in electric markets, offering the first updated estimate of stranded costs for Texas electric utilities since 1998, and in fact suggesting that such costs have now fallen below zero, indicating that plant market value for all state's utilities now exceeds book value.
The stranded cost update is based not on a PUC finding, but only on so-called ECOM estimates ("Excess Costs Over Market") compiled from UCOS cases ("Unbundled Cost of Service"), filed by the utilities according to assumptions mandated by the PUC, and updated to incorporate revised natural gas price forecasts.
As initially filed, the UCOS petitions identified some $3 billion in stranded costs for Texas utilities, including $1.354 billion for TXU, and $815 million for Reliant. As updated, however, the state total is a negative $742 million, including a negative $1.454 billion for TXU.
Otherwise, the report cites new state-mandated air emission standards as problematic. "The new NO x rules will present challenges in some non-attainment areas," the report states, "particularly the Dallas-Fort Worth area." And it adds that "continued reliability of service in the DFW area is a concern, because of the import constraints into the area."
The report also recommends an amendment to the state's Gas Utilities Regulatory Act so that gas utility subsidiaries of combined electric and gas conglomerates don't have an advantage (through combined electric and gas "branding") versus unaffiliated gas suppliers. .-B.W.R.
California Plant Outages. The Office of General Counsel and the Office of Markets, Tariffs, and Rates at the FERC reported that generating outages in California at plants owned by Dynegy, NRG, and Reliant appeared to stem