Fortnightly Magazine - November 15 1997

Marketing & Competing

HOW DO CUSTOMERS RESPOND TO REAL-TIME PRICING?

Even when the customer is a commercial or industrial organization, the answer can prove illusive.

Real-life responses to RTP depend on the entirety of the incentive and monitoring systems, group dynamics and individual personalities. Managers within an organization respond to RTP signals based on information and incentives that only they can know and comprehend. Only people employed by the organization are privy to these intangibles, which remain highly idiosyncratic within any organization.

Byline: 
Nainish K. Gupta & Albert L. Danielsen
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Information Technology for Utilities

IN THE DRIVE TO MATCH INFORMATION TECHNOLOGY SYSTEMS WITH THE

demands of "deregulatory" standards, utilities are investing billions in information technology (em some launching new business lines from their experience.

Worldwide, utilities are investing $20 billion; electric utilities pony up the most: $12 billion each year, according to Newton-Evans Research Co. An average U.S. electric utility will invest $43 million this year; a gas utility will invest $9 million.

Byline: 
Joseph F. Schuler, Jr.
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FERC Briefs

CINERGY MERGER CONDITIONS. FERC allows two-year deferral of prior requirement (a condition of the 1993 Cinergy merger) for Cincinnati Gas & Electric Co. and PSI Energy Co. to build a 345-kV transmission line by 2000 to link territories to guarantee central dispatch for generation. Cinergy says it can now duplicate the capacity with open access. FERC Chair James Hoecker concurs, citing "further evidence that the bulk power market is working." (Docket No. EC93- 6-004, Sept. 24, 1997)

Hydro Licensing.

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Electronic Trading: Toward an Hourly Market in Natural Gas

THERE IS MUCH TALK ABOUT CONVERGENCE.

The Federal Energy Regulatory Commission asks, "What needs to be done to enable the gas and electric markets to work together to become more integrated?" The real question is more direct: "How can the gas industry transform what is presently, at best, a daily market, with daily procedures, to an hourly or quarter-hourly electric generation business and gain benefits at the same time?"

Will the answer come from hourly gas trading and pricing?

Byline: 
Greg M. Lander
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Northeast Utilities, NRC Could Face State Probe

Connecticut's Department of Public Utility Control and Attorney General Richard Blumenthal alleged gross mismanagement of the 582-megawatt Connecticut Yankee nuclear plant in charges filed at the Federal Energy Regulatory Commission. Northeast Utilities owns 49 percent of the facility.

The plant has been shut since December 1996 and is being dismantled. The filing claimed the utility lost control of contamination and created an undocumented nuclear waste dump.

Byline: 
Lori A. Burkhart
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Electronic Trading: Toward a Mature Power Market

A MASSIVE, WORLD WAR I-era building in downtown Baltimore houses Constellation Power Source, an unregulated, wholly owned power-marketing subsidiary of Baltimore Gas and Electric Co. Upon introducing the new company in February, BG&E announced that Goldman Sachs would serve as "exclusive advisor" for the start-up.

Later, when asked to clarify the relationship between the two companies, Charles W.

Byline: 
Lori M. Rodgers
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FERC's Massey Previews Fall Electric Agenda

Commissioner William L. Massey said four issues would dominate the fall electric agenda of the Federal Energy Regulatory Commission: Orders 888 and 889 implementation, mergers, independent system operators and reliability.

Speaking on Sept. 11 at the PowerMart Power '97 conference and expo in Houston, Massey said the FERC hoped to issue a major order this fall on elements of California restructuring to ease implementation of the ISO and power exchange by Jan. 1, 1998.

Byline: 
Lori A. Burkhart
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The ULTRA Award: Honoring Leaders in Information Technology

KCPL first with meters, automation; APS second for T&D management.

IF THE 1997 ULTRA COMPETITION CAN SERVE AS A GUIDE, then perhaps the forgotten "wires" business offers the next great opportunity for new applications in information technology.

That's the lesson of this year's contest, which saw Kansas City Power & Light Co., and Arizona Public Service Co. win the top two prizes. Each company gained recognition for IT applications designed in large part to modernize electric utility distribution systems.

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Schaefer to Put Shoulder to Door on Choice Bill

Rep. Dan Schaefer (R-Colo.) insists he intends to help enact federal customer choice legislation with a certain start date. The chair of the Subcommittee on Energy and Power made the pledge Sept. 24 at the panel's 20th hearing on electric restructuring. The hearing's focus was on state and federal roles in enacting competition.

Schaefer pointed out that the Edison Electric Institute seeks to avoid a federal mandate on retail access, yet members are going back to their states to throw a wrench into deliberations on, or implementation of, restructuring.

Byline: 
Lori A. Burkhart
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Global Alliances

DRIVEN BY ECONOMIC GROWTH, INDUSTRIALIZATION and privatization, worldwide demand for primary energy could double by 2020 (em requiring one 500-megawatt power plant to be built every 3.5 days to meet that need. Much of this growth will occur in Asian countries, most notably China, Thailand, India, South Korea, and Indonesia. China alone is expected to increase electric generating capacity by 15,000 MW per year at a cost of about $15 billion annually.

Byline: 
Lori Glauser
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