Northeast Utilities

It's not as straightforward as it seems, says an industry veteran.

No one can foresee with a high degree of certainty how electric energy markets will be structured over the long-term. The changes facing the electric energy industry may be as profound as those upheavals we've seen in the airline industry during the past two decades. In the "good old days," a flight from New York to Chicago had one price and an electric generating plant had a regulated price for each kilowatt-hour produced.

States earmark millions to fund solar projects via system benefits charges.

Making solar power a realistic choice for electric consumers is a burgeoning issue for state utility regulators. As part of electric restructuring, regulators are trying to finance the costs of solar installations.

Key to delivering commercial, on-grid solar power to new markets are state efforts, partnered with other government and industry actions. So far, the system benefits charge, or SBC, is the primary short-term incentive to develop solar, wind, biomass and other renewable resources.

Cheryl W. Gris´e was promoted to senior vice president, secretary and general counsel for Northeast Utilities and its subsidiaries. She replaces Robert P. Wax, who left NU to return to private law practice.

Houston Industries Trading and Transportation Group appointed Patrick J. Strange vice president, physical gas trading east division for NorAm Energy Services Inc. Strange joined the company in 1995, serving as director of gas trading.

DTE Energy Trading named Dowell Hudson director, business development and wholesale marketing.

FERC

GAS PIPELINES. Noting a move toward shorter-term contracts since Order 636, the FERC on July 29 issued an "integrated package" of reform proposals for the natural gas pipeline industry: (1) specific measures in a notice of proposed rulemaking on short-term transportation (transactions shorter than one year); plus (2) an open-ended request for comments in a broader notice of inquiry. RM98-10-000, 84 FERC ¶61,985 [NOPR]; RM98- 12-000, 84FERC ¶61,087 NOI].

FERC

MIDWEST POWER PRICES. Federal Energy Regulatory Commission Chairman James Hoecker announced July 15 that as soon as the staff presents its findings, the FERC will deal with the complaints filed by Cinergy, Steel Dynamics Inc., and others asking for regulatory relief from the late June run-up in Midwest bulk power prices (as high as $7,500 per megawatt-hour), and for a price cap set at $100/MWh. Nevertheless, Hoecker advised that the FERC was in "no hurry," and that the remedies available to it were not entirely clear. Docket No. EL98-53 (Cinergy), filed June 29, 1998; Docket No.

Try this: Buy wholesale power at 3.2 cents per kilowatt-hour; sell at 2.8 cents. That's the deal in Massachusetts. No wonder Enron fled, seeing no margin for profit.

In fact, when I called a friend at a power marketing company to learn more, he said his company had given up hope and was leaving the state.

Utilities can swallow this loss, he explained. They can defer the four-mill shortfall and accrue it for billing later, like a regulatory asset. The state's Department of Telecommunications and Energy allows it.

TODAY THE ELECTRIC UTILITY INDUSTRY HURTLES TOWARD massive restructuring. This fervor is not surprising as it appears society has become convinced that market forces can work better than a centrally planned, regulated environment. This conviction draws strength from deregulation in other industries, such as the airlines, natural gas production and telecommunications.

FOLLOWING MONTHS OF SPECULATION BY INDUSTRY players, Corbin A. McNeill Jr., chairman and CEO of PECO Energy Co., has formally announced that the company will focus on nuclear generation.

The mid-April revelation didn't take many speculators by surprise.

PECO has decided to focus on generation, nuclear generation in particular. While many other companies have chosen to abandon this risky part of the business, PECO is entering it with both feet. The company believes that nuclear is where its strength and expertise lie.

IF AN INDEPENDENT SYSTEM OPERATOR OVERSEES THE TRANS-

mission grid, how much independence is too much? Should ISOs cede control over dispatch to scheduling coordinators, or market functions to a power exchange? Addressing some of these questions, a new report released in April by The Progress & Freedom Foundation criticizes a restructured electric industry built on ISOs with restricted authority.

THE Oregon Public Utility Commission named Bill Warren director of its utility program. Warren will replace Mike Kane, who is retiring. Currently, Warren serves as administrator of the electric and natural gas division of the utility program.

Michael J. Mujadin was named executive vice president of Nitrotec Corp. and president of Nitrotec's wholly owned subsidiary Nitrotec Energy Corp. Previously, Mujadin was executive vice president of Coastal Corp.'s ANR Storage Co.

Consolidated Natural Gas Co. elected Raymond E. Galvin to its board of directors.