Bruce W. Radford
Shaky merger policy finds the FERC at war with itself.
"IN HIS DELIGHTFUL ARTICLE, "THE FOLKLORE OF Deregulation," published this summer in the Yale Journal on Regulation, federal judge Richard Cudahy notes the ethereal nature of "virtual electricity." This new product, he explains,"exists only as a blip on a computer screen and will never give one a shock." "Reality," he notes, has "retreated to the money part of the system."
We could use a dose of that reality in looking at electric utility mergers.
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
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].
THERE MAY BE A LOT OF TALK IN THE ELECTRIC industry nowadays about creating a new identity to build name recognition, but residents in some parts of the country are seeing some old, familiar faces. Namely, Tom, Ben, Reddy and Willie.
For more than a decade, retired teacher Drew Wilson has taken on the persona of Thomas Alva Edison to represent Southern California Edison Co. at school assemblies, public exhibitions and fairs (see photo). Although he bears no relation to the inventor, Wilson is one of the best Edison impersonators, said SCE spokesman Charlie Basham.
John S. Ferguson
Efforts to make generation competitive have induced several electric utilities to sell their power plants. Some sales are voluntary. Some are forced by rules mandating functional segregation from transmission and distribution. Of those sales announced or completed, most have involved high-cost utilities, and all have garnered at least book value, suggesting an attempt by sellers to deal with stranded costs.
Why then, are buyers willing to pay more than book value? They must believe they can improve on cash flows - either by raising revenues, trimming costs, or both.
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
Business Wire
William Catacosinos has resigned as chairman of MarketSpan Corp., the utility formed to replace the troubled Long Island Lighting Co. Catacosinos is under investigation by the New York attorney general due to a $42-million severance payment as part of the buyout of LILCO by the New York government-run Long Island Power Authority (see Public Utilities Fortnightly, August 1998, p.28).
SCT Utility Systems Inc., signed a software and services agreement worth about $13 million with the city of Seattle for the BANNER Customer Management System.
Christopher Seiple, Albert Pearson and David Wagman
THE LIST OF COMPANIES STUNG BY RECENT ELECTRICITY. price spikes in he Midwest continues to expand, as cries for price caps grow loader. Much has been said of the dollar amounts lost and who has incurred those losses; yet few have questioned the fundamentals driving this market. Understanding what's behind the recent market uproar is the first step in deciding how well the market functions.
Regulators should be careful not to slow the restructuring process simply because of this price volatility, but they should pay very close attention to its causes.
THE BOARD OF DIRECTORS of Virginia Power elected James A. White to the position of senior vice president, human resources. White previously served as senior vice president, human resources for the investment management group of Cigna Corp. He will replace Tom O'Neil, who retires after a 33-year career with the company.
Sen. Frank Murkowski (R-Alaska) announced the appointment of Tina Kreisher as communications director of the Senate Committee on Energy and Natural Resources. Kreisher previously served as deputy director of the Washington d.c. office of Gov.
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
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.
Lori A. Burkhart, Phillip S. Cross and Beth Lewis
State PUCs
STRANDED COST RECOVERY. The Pennsylvania Public Utility Commission allowed Pennsylvania Power & Light Co. to recover $2.9 billion of a requested $4.5 billion in stranded costs, cutting a higher $4-billion allowance proposed earlier by an administrative law judge. The utility petitioned for reconsideration on June 26, after CEO William F. Hecht had called the decision "unacceptable," and noting that the PUC's written order, received June 15, appeared "even more injurious" to the company that the PUC's June 4 bench order.
Christine E. Platt and Jonathan W. Hurwitch
ACCORDING TO ONE RECENT SURVEY, MORE THAN HALF THE U.S. population now lives in states with customer choice. Moreover, industry executives expect 20 to 50 percent of these customers to choose a new electricity supplier by year end. %n1%n
With changes expected in the way electricity is generated, delivered and sold, exerting pressure on prices, what does the future hold for energy storage technologies?
After all, restructuring efforts appear most active in the highest-cost states -- those with average electricity prices running above 7 cents per kilowatt-hour.
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