Robert J. Michaels and Jerry Ellig
The post-mortems on last summer's price spikes in the Midwest are in. At least three studies of the event diverge in their conclusions:
First, on Sept. 24 of last year, the staff of the Federal Energy Regulatory Commission found the root cause of the spikes in extreme weather and unexpected outages. It observed no direct evidence of market manipulation and concluded that the events were unlikely to recur.
Mary L. Schapiro, president and member of the board of the National Association of Securities Dealers Regulation Inc., or NASDR, was appointed to the Cinergy Corp. board of directors. Schapiro will fill the vacancy resulting from the retirement of Van P. Smith, chairman of Ontario Corp.
U.K. electricity regulator OFFER (Office of Electricity Regulation) appointed Brian Saunders, Ph.D., a member of the Electricity Pool, to head the Department of Trade and Industry/OFFER team to reform electricity trading.
Bruce W. Radford
New Mexico's PUC goes down in flames.
This story has everything: politics, favoritism, a stock price crash, extortion (a long-ago crime by a certifiable nut), a utility rate case (I love'em), Ivy League economists (like moths to a flame), and finally, a last minute stay of execution, perhaps saving the utility from default on its revolving line of credit. Heck, even Enron's involved.
What's missing, however, is a clear understanding of who the good guys are.
Bruce W. Radford
As utility takeovers break new ground, the FERC ponders proposed rules, perhaps already out of date.
A year ago, when U.S. Antitrust Czar Joel Klein talked of a "window of opportunity" for electric utility mergers, he didn't predict when it would close.
And it hasn't yet.
In the 12 months leading up to January 1998, when Klein had addressed the Federal Energy Regulatory Commission through its "Distinguished Speakers" series, only the ill-timed Primergy deal had been turned down. The next year, 1998, would prove no different.
Auctioning gas imbalances offers advantages over bidding on available pipeline capacity.
In a Notice of Proposed Rulemaking issued last summer, the Federal Energy Regulatory Commission proposed a series of auctions for all unutilized short-term rights in pipeline capacity, with the most frequent auction being for transmission rights for the next day. All transporters and the pipeline would be required to release available short-term capacity rights to be auctioned. (See FERC Docket RM98-10-000, Regulation of Short-term Nat. Gas Transp.
Gregory M. Lander
Make gas pipeline rights more fungible, but draw the line at contingent bidding.
Last July the Federal Energy Regulatory Commission proposed mandatory auctions to allocate all capacity rights shorter than one year's duration on interstate natural gas pipelines. (See RM98-10-000, Regulation of Short-term Natural Gas Transportation Services, FERC, July 29, 1998.) At a technical conference held Oct.
Bruce. W. Radford
A debate on the FERC proposal to put short-term capacity up for bid.
Last summer the Federal Energy Regulatory Commission truly outdid itself. In a move that left the gas industry speechless, the FERC proposed that it would remove all price controls or cost-based regulation for capacity rights shorter than one year's duration, and instead would resort to auctions for the purchase and sale of such "short-term" rights to transport natural gas on interstate pipelines.
The reason? The FERC said it wanted to level the field between short- and long-term contracts.
Alan H. Richardson
Public power is competitive power, and that keeps IOUs on their toes.
There they go again. You know who I mean, the critics who fear us in a competitive electric utility environment, or who oppose, for ideological reasons, government involvement in the power business.
Charles E. Bayless, in his article "Time's Up for Public Power" (Public Utilities Fortnightly, July 1, 1998), offered up just the latest of these below-the-belt blows.
It's tempting to respond in kind to these critics. Why? Because they torture the facts and distort the record.
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.
Bruce W. Radford
The FERC's latest idea throws pipelines for a loop, with implications for power markets, too.
Transmission and distribution (em the business they call "pipes and wires" (em can't last much longer with rates set by cost of service. Contrary to the myth, these services deserve no special status due to their high embedded costs. They carry no intrinsic value apart from the electrons and molecules they deliver.