Ahmad Faruqui and Laurence D. Kirsch
As the U.S. electric power industry unbundles, the industry and its regulators grapple with two big questions concerning the degree to which distribution services should be unbundled. First, what groups of distribution activities can separate suppliers provide? Second, which of these groups of activities should be open to competition?
Looking at the unbundling experiences of Argentina, Australia, Canada, Chile, Norway and the United Kingdom sheds light on these questions. The distribution unbundling of the U.S. gas and telecommunications industries provides additional insights.
THE board of trustees for Con Edison named James P. O'Brien general auditor. O'Brien joined Con Edison in 1972 after serving in the U.S. Navy. He will replace Lawrence F. Travaglia who is retiring.
Consolidated Natural Gas Co. named Elena C. Mola vice president, Latin America/Europe, of its subsidiary CNG International.
Siemens Power Transmission and Distribution named David Johnson vice president of its distribution automation division.
The Energen board of directors announced two promotions.
THE RESIDENTIAL MARKET STANDS AS THE NEXT FRONTIER for natural gas unbundling. In California, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, Pennsylvania and elsewhere, states have introduced pilot programs and other unbundling efforts to target residential gas consumers. %n1%n
These efforts are hardly surprising. The residential market, presently dominated by the regulated local distribution companies, appears lucrative. In 1995, the residential sector of the U.S.
George R. Pleat
MANY STATES ARE CONSIDERING THE IDEA OF opening billing and metering to competition at traditional distribution companies. %n1%n Electric utility executives can no longer assume that a regulated monopoly distribution company, or "disco," will retain control of both the "wires" function and billing and metering services. %n2%n
This new prospect raises questions: Should a disco seek to retain billing and metering as a regulated monopoly, complete with the obligation to serve all customers requesting electric connections?
Karl Stahlkopf and Philip R. Sharp
POWER DISTURBANCES COST U.S. ELECTRIC CUSTOMERS about $26 billion each year: nearly three times the anticipated annual saving from deregulation.
Competition and restructuring will only turn up the pressure, as the grid carries more low-cost power over longer distances to a wider variety of customers.
Already we are seeing a rapid rise in wholesale power transactions. Some utilities now complete as many such transactions in one day as they previously made in one week. Overall, the value of wholesale transactions has increased fourfold over the last decade.
The article "Risk and Rates for the Regulated Distribution," by Maloney, McCormick, and Tyler (Sept. 1, 1997, p. 26) was interesting. For people with the vested interests of the authors, unbundling offers the golden opportunity of reducing regulated rates without actually having a formal rate decrease. That comes about by shifting on paper as much revenue as possible from the regulated disco to the competitive genco, while of course leaving all the costs with which that revenue is associated within the disco.
AT Washington Water Power, Bobby Schmidt was appointed director of the company, and Paul A. Redmond announced his retirement as chair and CEO. Redmond started with the company in 1965. Previously, Schmidt worked as an independent trader in Chicago.
MDU Resources Group Inc. has promoted Martin A. White from senior vice president, corporate development to president and CEO. White, who has been with the company since 1991, will replace retiring president H.J. Mellen Jr.
Robert L. Goocher was promoted to president of AGL Resources Service Co. from executive vice president and COO.
Robert G. Rosenberg
G+T+D=? Why the sum of the future parts is greater than the present whole.
GENCO, TRANSCO, DISCO. IF THAT IS the future, then rates collected formerly by the integrated electric company (em with its generation, transmission and distribution functions (em will have to be determined again for each segment. One aspect of these rates (em the cost of capital (em has generated significant controversy.
Lori M. Rodgers
A state-by-state look at retail competition.
RHODE ISLAND'S CUSTOMER CHOICE PROGRAM FOR LARGE-industrial and government consumers is five months old. California consumers will see retail choice on Jan. 1. New York, Illinois, Idaho and Washington have pilot programs well under way. And a statewide pilot program was set to begin this month in Pennsylvania.
Yet retail choice may prove vulnerable in New Hampshire (em the one state that has shown the greatest commitment to retail choice.
Phillip S. Cross
To help gas customers take advantage of unbundled services, the New York Public Service Commission has authorized National Fuel Gas Distribution Corp. to modify its existing firm transportation service procedures to allow marketers to gain access to a share of utility storage capacity, for use in delivering the required volume of gas to the city gate.
In another ruling, the commission approved a similar, but less innovative storage proposal for firm transportation customers served by Central Hudson Gas & Electric Corp.