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.
THE CALIFORNIA DEBATE OVER ELECTRIC RESTRUCTURING IS now nearly four years old. And though it is nearing its final stages (the opening is now set for March 31), some of the most important questions as to how this will work in practice are just emerging.
The original bargain had called for the state's three large investor-owned utilities to vest basic control of their transmission networks in the new independent system operator in exchange for maintaining combined ownership of generation and transmission assets (and for a good level of assured stranded cost recovery).
Lori A. Burkhart, and Phillip S. Cross
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 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.
David Haarmeyer, Robert T. McWhinney Jr. and Ronald Moe
USGEN IS THE NATURAL CANDIDATE TO PURCHASE NEES' generation assets. We have a well-established commitment to the region; we have strong power plant operating experience; and we have been a leader in promoting competition and customer choice in gas and electric industries."
(em USGen President and CEO Joseph P. Kearney
In August 1997, U.S. Generating Co., an affiliate of PG&E Corp., successfully bid $1.59 billion in a competitive auction for all of New England Electric System's non-nuclear generating business (18 power plants, plus power purchase contracts and other assets).
Has rate regulation become obsolete for natural gas pipelines?
On Jan. 30, FERC will hold a public conference to review the financial health of the pipeline industry. It will ask whether its regulatory framework still works; whether pipelines can still attract new capital for investment. Does rate policy threaten the financial integrity of the pipeline industry? That very question may come before the Commission. Nevertheless, FERC need not look far for an answer. If the pipeline industry should lie at risk, the cause may go no farther than the Commission itself. In fact, FERC ratemaking policy for gas transportation service now appears to jeopardize the ability of pipelines to recover costs.
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.
IF YOU HAD TAKEN A JOB ON A STATE PUBLIC UTILITY commission back in 1928, at the average pay scale for regulators, and still held that position today, how would you have fared?
The answer: It depends on which state you worked for.
In 1928 Public Utilities Fortnightly reported an average annual salary for state PUC members of $5,092.64 ("Your State Public Service Commissioners," Feb. 23, 1928, p. 9). Salaries ranged from as low as $2,000 and $2,200 (Vermont and Mississippi), to as high as $10,000 (Pennsylvania), $12,000 (New Jersey) and $15,000 (New York).
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.