New Jersey

Gas Restructuring: Can Distributors Repeat the Success of Pipelines?

A talk with two LDCs. First, PSE&G appears content to cede sales to marketers, Second, NW Natural intends not to give in just yet.

This much is clear: Energy utilities are headed for an unbundled future.

As states from both sides of the country implement residential and commercial natural gas unbundling, require residential choice pilot programs and grapple with electric industry restructuring, competition shows no signs of slowing. To boot, some members of Congress seem eager to give competition a national push.

Gas Pilot Programs Gain Steam

Over the summer, a handful of states approved gas pilot programs that will introduce choice of supplier to residential, and small commercial customers in preparation for the heating season. The decisions welcome the expansion of customer choice to smaller users, but pay careful attention to operational details such as who controls storage and upstream pipeline capacity to performance balancing services.

New Jersey. Finding greater than expected public interest, the New Jersey Board of Public Utilities has authorized New Jersey Natural Gas Co.

In Brief...

Sound bites from state and federal regulators.

Electric Exit Fees. New Jersey board exempts General Motors Corp. from any exit fees imposed in the future to collect electric utilities' stranded costs, in connection with GM's plans to build a $2.2-million gas-fired cogeneration facility (PURPA-qualified) at its Linden auto assembly plant. GM said it had checked all laws and regulations and had found no current obligation to pay exit fees. Docket No. ET96090669, June 24, 1997 (N.J.B.P.U.).

Residential Gas Rates. Arkansas OKs settlement allowing Arkansas Oklahoma Gas Corp.

FERC Ends Summer Session Without Fanfare

No clear signal as yet from new chair James Hoecker.

The Federal Energy Regulatory Commission had a busy day on July 30, but observers will have to wait until the fall to learn of any new wide-ranging policy initiatives planned by incoming chair James Hoecker, who has now succeeded Elizabeth Moler in the top post.

The end-of-summer meeting (em and Commissioner Donald F. Santa Jr.'s last (em was marked largely by a lack of controversy.

An East Coast View: The Right Price for PJM

Locational marginal pricing, even if "complex," is well worth the benefits.

In two recent issues, PUBLIC UTILITIES FORTNIGHTLY featured editorials %n1%n on restructuring of the PJM Pool. Those two articles described proposals by the so-called supporting companies, %n2%n seven members of the Pennsylvania-New Jersey-Maryland Interconnection, to use a "locational marginal pricing" model for congestion pricing for electric transmission and to continue PJM as a "tight" power pool.

N.J. Extends Economic Development Programs

The New Jersey Board of Public Utilities has authorized Public Service Electric and Gas Co. to extend its existing economic development programs through July 1999.

The programs include construction and building credits for non-residential consumers who expand into newly leased or purchased vacant building space and increase their electric or gas energy use as a result. The program also includes an electric, off-peak employment service for non-residential customers that increase consumption of off-peak electricity as a result of increased employment levels.

In Brief...

Sound bites from state and federal regulators.

Build vs. Buy. Finding the "build" option as the cheapest alternative when two purchased power contracts expired, Florida PSC allows Tallahassee municipal electric utility to construct a 250-megawatt, combined-cycle, natural gas-fired power plant at an existing generation site. Docket No. 961512-EM, Order No. PSC-97-0659-FOF-EM, June 9, 1997 (Fla.P.S.C.).

Special Contract Discounts. New Jersey allows Elizabethtown Gas Co.

Frontlines

My electric company, Potomac Electric Power Co., has announced a joint venture with RCN Corp. of Princeton, N.J., to offer local and long-distance telephone service to callers in Washington, D.C., and nearby areas, plus cable television and high-speed connections to the Internet. With stockholder money, PEPCO would compete head-on against Bell Atlantic, which won approval from the Federal Communications Commission on Aug. 14 for its $25-billion merger with NYNEX.

Reporting the story, The Washington Post quoted PEPCO President John M.

Mid-Atlantic States Set Standards for Natural Gas Marketers

Regulators in Pennsylvania and New Jersey have taken steps to address relationships between natural gas utilities, customers, marketers and brokers operating in their respective states, announcing policies to cover such topics as fitness requirements, marketing practices and consumer protection.

One question that continues to raise concern is price arbitrage by marketers during supply emergencies that might affect service to captive residential customers.

Pennsylvania.

NJ Updates Plan to Modernize Phone Network

As it concluded its first review of an alternative rate plan for local telephone service, the New Jersey Board of Public Utilities approved a series of telecommunications network upgrades and associated network modernization program for Bell Atlantic-New Jersey.

The original rate plan, approved in 1993, had combined the promise of a modernized telephone infrastructure with rate deregulation for certain competitive services and a freeze on rates for residential phone service. (See, Re New Jersey Bell Tel.