Anyone on the East Coast can tell you a good snow story this winter. Like when I looked out my front window one morning and saw a four-wheel-drive utility vehicle get stuck in the middle of my street in downtown Washington. After spinning his wheels for a while, the driver got out and began walking toward Connecticut Avenue, a main DC thoroughfare.
The driver soon returned, carrying a fresh, steaming cafe latte from Starbucks in each gloved hand. He opened the door, climbed in, and gave one cup to his passenger. They sipped. The driver then turned the key, started the engine, and the jeep pulled out straight away, as if nothing had happened.
Careful readers may remember the article by Kevin O'Donnell from late last year ("Aggregating Municipal Loads: The Future is Today," October 1, 1995, p. 26) that told the story of four small towns in eastern North Carolina that joined forces to aggregate loads and explore opportunities in wholesale power markets. O'Donnell showed how towns with very small loads (1.3 to 3.8 megawatts) can still play ball in competitive markets.
On January 11, Kevin called me to report that three of the four towns mentioned in the article have now entered an energy management agreement with Duke/Louis-Dreyfus, which will serve as agent to procure bulk power for Lucama, Black Creek, and Stantonsburg. These towns previously obtained their bulk-power requirements from the Town of Wilson, NC (itself supplied by the North Carolina Eastern Municipal Power Agency). O'Donnell reports that the Town of Fountain backed out of the group. Fountain, which is supplied by the City of Farmville, lacks line crews, bucket trucks, and other maintenance resources, says O'Donnell, so it decided to stay with a local power supplier. The Wilson Daily Times (an evening newspaper) carried the story on the front page on January 11: "Three towns unplug from Wilson . . .; rates cut 30-40%."
O'Donnell continues to express amazement at the difference in attitude ("can-do" versus "go-slow") in wholesale and retail electric markets in the Old North State. He acknowledges that the state commission ranks far down the list of deregulatory activists, but feels strongly that in this case, his three rural towns showed a commitment to customer choice: "Small loads can benefit simply by acting as their own power marketers and aggregating loads." In fact, O'Donnell says that after his article came out, he received calls from several marketers looking for small-sized loads.
Many years ago, I'm told, before we had funding for the Electric Power Research Institute (EPRI), energy R&D came from appliance manufacturers vying for competitive advantage.
Robert L. Hirsch, a former EPRI vice president, has taken that lesson to heart in forming his new R&D venture, doing business as E-TEC, The Energy Technology Collaborative, Inc., headquartered in Washington, DC. I talked with Hirsch a few weeks ago about his new company.
E-TEC (formed in September 1995, with Hirsch as president) operates as an R&D brokerage company on behalf of a small group of fee-paying subscribers, generally electric utilities. It offers to procure R&D output for these few subscribing utilities, to put them a step ahead of the madding crowd. Some utilities will have; others will have not.
As scientists, engineers, or other R&D organizations offer ideas, E-TEC subscribers will peruse them, choosing only proposals that fit their needs. Groups of five or fewer subscribers will then fund the idea, which will remain confidential and proprietary to the R&D bidder and the co-funding subscribers,
according to individual contracts. It works like a
mutual fund for R&D.
I asked Hirsch whether subscriber membership might end up trading at a premium above the nominal membership fee, if any initial E-TEC projects turn out successful and attract late-joining subscribers. He said "no." He added that researchers should not be discouraged at the thought of assigning proprietary rights to utilities (em it's probably not much different from Bell Labs.
"Increasingly, interstate natural gas pipelines inhabit a twilight region between regulation and competition." That comment refers to the remarkable problem of unsold, long-term capacity rights on natural gas pipelines, and comes from an issue paper, "Future Unsubscribed Pipeline Capacity," released by the LDC Caucus. A splinter group of local distribution companies (LDCs) created out of the American Gas Association, with its own set of governing officers and board of directors, the Caucus was formed to identify and give voice to regulatory and policy issues over which a difference of opinion might likely arise between the LDC and pipeline membership cohorts within the broader association.
The paper reflects a survey of some 75 natural gas local distribution companies (LDCs) and concludes that two regions (em California and the area around Chicago ("North Central East") (em are most likely to develop a problem with unsubscribed capacity.
To that extent, the paper generally comports with a previous study of gas pipeline capacity "turnback" released in September by the by the Interstate Natural Gas Association of America (INGAA), which predicted that as much as 13 percent of interstate pipeline capacity will not remain under long-term firm contracts by 2002. Jerald V. Halvorsen, INGAA president, suggested on January 10 that gas pipelines are attacking the problem on several fronts, such as through negotiations with customers.
The LDC Caucus acknowledged that the percentage (28) of LDCs in its survey that expected to increase capacity reservations would "partially offset" those LDCs (45 percent) who anticipated reductions in capacity reservations. But it also warned readers that the first group tended to be "the smaller ones," while the respondents predicting capacity reductions are "generally the larger LDCs."
Frank Heintz, executive director of the LDC Caucus, lets the study speak for itself. Heintz, who served as chairman of the Maryland Public Service Commission before joining the Caucus in May, told me last month of "rumors on the street" that in late January or early February, the FERC would release "something" in Docket RM95-6, its investigation of alternatives to traditional ratemaking for gas pipeline transportation. And Heintz sees parallels between gas transportation and electric transmission: "Both industries ought to be looking at what happens to the other."
Articles found on this page are available to Internet subscribers only. For more information about obtaining a username and password, please call our Customer Service Department at 1-800-368-5001.