State Legislatures

UTILITY HOUSE CALLS. Michigan Gov. John Engler (R) signed into law a bill making it a felony to impersonate a utility employee to enter private property for criminal purposes. The new law calls for those convicted to be imprisoned for not more than two years and to pay a maximum fine of $1,000, or both.

ELECTRIC RESTRUCTURING. Illinois Gov. Jim Edgar (R) signed into law an electric restructuring bill for the state. Edgar noted that concerns over the bill were addressed by the state's two largest utilities, Commonwealth Edison and Illinois Power Co.

POWER PLANT SALE. Central Maine Power Co. has agreed to

sell its hydroelectric, fossil and biomass power plants totaling 1,185-MW of generating capacity to FPL Group, the holding company of Florida Power and Light. The sale price of $846 million exceeds book value and could permit up to a 10-percent rate cut for customers by the end of the year.

OHIO/TEXAS DEAL. Ohio-based American Electric Power

Co. and Texas-based Central and South West Corp. on Dec.

THE FERC TAKES SUGGESTIONS ON THE FUTURE OF THE GAS INDUSTRY.

Earlier this year, the Federal Energy Regulatory Commission opened a discussion of issues facing the natural gas industry. Its aim? To set "regulatory goals and priorities" for the era following from Order 636, issued in 1992. %n1%n

To gather input, the FERC scheduled a two-day public conference. It asked for comments on a myriad of topics, ranging from cost-of-service rates to hourly gas pricing and services.

Open-access tariffs hold the key to capturing the gains promised by electric restructuring.

In a restructured electric industry, unbundling the cost of the wires from power generation may well prove more important than dealing with stranded costs. In fact, stranded costs eventually will take care of themselves, whether by direct recovery, indirect recovery or no recovery. Without proper unbundling, however, a restructured industry could force competitors to pay inflated access fees to the distribution utility.

The matter has drawn a lot of attention.

RTP assumes that price spikes will deter load. But how will customers behave if they've hedged against that risk?

Tomorrow's electricity industry promises a wealth of pricing options as wholesale generation becomes more like a commodity. Spot pricing marks one example. And with spot markets will come a greater need for price derivatives (em hedge contracts that will permit customers to trade or shed risk to achieve a higher degree of price certainty.

Lately I'm reading up on the new Telecommunications Act. Last week I printed a copy from the Internet and stuffed it in my briefcase. Each night on the train I give it a go and skim a few sections.

The new law unabashedly favors competition over regulation, but appoints state commissions (PUCs) to certify when that competition may be deemed effective enough to open markets. Thus, the PUCs will take at least one last shot at managing markets before they relax regulation for competitive services.

The Citizens Advisory Panel (CAP) has released its proposal to cut rates on Long Island by 20 percent, in response to New York Gov. George Pataki's call for the dissolution of the Long Island Lighting Co. (LILCO). Electric rates on Long Island are the second-highest in the nation.

The CAP plan would slash at least $1 billion from Shoreham debt, and refinance the remaining debt with bonds issued by the Long Island Power Authority (LIPA). CAP believes the $1-billion cut alone would reduce electric bills 10 percent.