Bruce W. Radford
EL NIÑO HAS STRUCK, WITH NO END IN SIGHT.
Consider that Aquila Energy, the marketing arm of UtiliCorp United, has announced a new financial derivative, known as GuaranteedForecast,sm to hedge the weather against forecasts by the National Weather Service. The new product will pay holders a guaranteed amount if the mercury strays, and Aquila touts its thermometer hedge for any of 170 U.S. cities (em be it Spokane, El Paso, Chicago or New York. Why talk about the weather when you can invest in it, in true '90s fashion?
For this heating season, however, it may be too late.
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
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.
Bruce W. Radford
AS YOU CHILL OUT IN YOUR TV CHAIR, WATCHING THE Winter Olympics from Nagano, Japan, think a moment about Kyoto, not far away, and what the climate change treaty might have in store.
On Jan. 8, federal climatologist Tom Karl announced that 1997 was the warmest year on record, with thermometer readings exceeding the mean (1961-90) by 0.42 degrees centigrade (0.75 degrees Fahrenheit). Writing in his World Climate Report, editor Patrick J. Michaels took Karl to task for reporting only half the story.
Nuclear Plant Fines. The Nuclear Regulatory Commis-
sion has proposed fines totaling $2.1 million against Northeast Nuclear Energy Co. for many violations at the company's Millstone nuclear plant in Waterford, Conn. The fine marks the largest civil penalty ever proposed by the NRC. Northeast Utilities said it will pay the fine, which it called "a necessary and important step toward bringing to closure a very disappointing and difficult chapter in the company's history." The utility said it will not pass the cost onto ratepayers.
Lori A. Burkhart, Phillip S. Cross, and Beth Lewis
CONSUMER FRAUD. The National Association of Attorneys
General, meeting Nov. 18 in Washington, D.C., to discuss electric restructuring, issued a warning to electric consumers on fraudulent schemes and abusive practices by scam artists. The warning encourages consumers to check their electric bills for unusual provider names or charges, and to avoid participating in contests that require a signature that can be used to switch an account.
RATE REDUCTION BONDS.
Phillip S. Cross
WITH DIRECT ACCESS SCHEDULED TO BEGIN ON Jan. 1, 1998, California regulators are moving quickly to set up their long-considered policies on electric restructuring. The restructuring actions touch nearly every aspect of electric regulation in the state from financing decisions and rate design to the sale of generating assets and monitoring new capital additions.
In addition, restructuring has affected ongoing regulatory activities such as the development of performance-based rate making plans and pricing and rate designs for large incumbent utilities.
Lori A. Burkhart
USE OF U.S. ECONOMY UPHELD FOR EQUITY CALCULATIONS
The Federal Energy Regulatory Commission, in seven rate cases involving interstate natural gas pipelines, has upheld a new policy on the appropriate long-term growth rate to be used in computing their return on equity. Five of the pipelines contested FERC's new policy, as announced in Opinion 396-b.
The Commission defended the rate-setting method, but decided to allow the pipelines a chance to prove why the rules should not apply to them. The contesting pipelines are: Trailblazer Pipeline Co. (Docket No.
Sharon B. Heaton
EVERYONE'S GOT AN OPINION ABOUT MARKETING affiliates. In the natural gas industry, a fierce debate has emerged, as rules are proposed to govern the relationship between utility and affiliate.
Affiliate transactions are already among the most regulated activities in the gas industry. According to the 1995-96 Compilation of Utility Regulatory Policy produced by the National Association of Regulatory Utility Commissioners, every state, except Nebraska, has jurisdiction over affiliate transactions involving a private- or investor-owned gas utility.
NEW England Power, a subsidiary of New England Electric System, promoted Lawrence E. Bailey to president. Previously, Bailey served as vice president and director of generation operations.
Former Deputy Secretary of Energy, Charles B. Curtis, joined Hogan and Hartson as the director of its energy group. Susan Tomasky, former General Counsel of the Federal Energy Regulatory Commission, accepted a position with Hogan and Hartson's energy group.
Lori A. Burkhart
The Georgia Public Service Commission has established standards for issuing certificates to marketers to compete under the state's Natural Gas Competition and Deregulation Act.
Under the standards, candidates must show their creditworthiness. To compete, a marketer must prove that its capital base or other financial resources can withstand the business and financial risk and absorb losses that might occur in providing firm gas service to retail customers.
S.B. 215, which was signed into law in April, established a regulatory framework to deregulate the gas industry.