A new law could help New York utilities reduce electric rates
and improve their balance sheets.
Legislation recommended by Gov. Pataki on June 1, 1996, seeks to provide the New York Public Service Commission (PSC) with a new financial tool to address possible stranded costs as the state moves toward a competitive retail electric market.
substantial niche market
of commercial
and industrial customers that are favorably disposed to green electricity.Seven utilities across the country have launched "green pricing" programs for residential electric customers. At these utilities, up to 3 percent of residential customers pay rate premiums to underwrite the construction and use of renewable electric generation.
With competition looming, electric utilities increasingly resort to price discounts, both to retain customers and to alleviate some of the pressure to introduce retail competition. Performance-based ratemaking (PBR), which allows utilities greater flexibility in offering price discounts, is emerging as an integral component of many restructuring proposals.
However, flexible pricing can create inequity among ratepayers.
Many executives of publicly held utility corporations have written severance agreements to protect them in the event of a change in control. However, these severance packages remain vulnerable to attack by acquirers.
Two separate threats are emerging. One involves a direct attack on drafting flaws in the plan documents. The other, more subtle, threat lies in the impact and interpretation of the special "Golden Parachute" rules under the Internal Revenue Code. This second threat warrants attention.
In April, Texas Utilities announced that it would buy ENSERCH, Western Resources launched a hostile takeover bid for Kansas City Power & Light, and The Southern Co. initiated its ultimately futile bid for the United Kingdom's National Power. Eight other pending mergers involving major electric utilities have been announced during the last year. Utility managements clearly believe their future success requires merging with other utilities.
The Reason Foundation, a public policy research organization, has issued a report, Federal Power: The Case For Privatizing Electricity, recommending privatization of the Tennessee Valley Authority (TVA) and the five power marketing administrations (PMAs).
Consumer advocates, utility chiefs, regulators, and analysts offered conflicting visions of retail competition's future at NASUCA's 1996 Capitol Hill Conference.
The National Association of State Consumer Advocates ( NASUCA) conference, "Restructuring the Electric Industry: What Are the Costs and Benefits to Consumers?," was held on February 29 and March 1 in the Rayburn House Office Building. The event was co-sponsored by Rep.
Competition from Order 636 has gas customers rethinking their firm capacity options.
Just when everyone thought we had put Order 636 behind us, up pops perhaps our greatest challenge yet: the turnback (or "decontracting") of firm capacity on interstate natural gas pipelines. This phenomenon, now emerging on a few major pipelines, such as Transwestern, El Paso, and Natural Gas Pipeline Co. of America, inspires different reactions.
Electric utilities nationwide are attempting to retreat from commitments to energy efficiency (em a retreat that will benefit few customers, while damaging many. This retreat is driven by fear of retail wheeling (em that consumers will be able to shop for the lowest prices among competing entities. In turn, the threat of retail wheeling has spurred utilities to a frantic scramble to cut costs and trim rates.
PV technology combined with storage offers a cost-effective alternative to capacity additions.By John Byrne,
Young-Doo Wang,
Ralph Nigro, and
Steven E. Letendre
Until recently, both regulators and electric utilities have considered photovoltaic (PV) technology (i.e., solar cells) an unattractive
energy-supply option because of its relatively high cost. Now, however, a number of utilities have shown interest in using PV for peak-shaving.