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.
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.
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.
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.
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.
ONE OF THE thorniest issues that the Federal Energy Regulatory Commission has had to deal with in recent years is defining the scope of its jurisdiction over pipelines on the Outer Continental Shelf. Yet the solution is relatively simple and straightforward.
Fueled by the volatile combination of perceived statutory ambiguity and significant financial gains to pipeline owners, who can convince the Commission that their currently regulated facilities are in fact beyond its jurisdiction, the OCS controversy has raged for years.
The California Power Exchange doesn't solicit separate bids for plant start-up, spinning reserve or base load operation. That can make spark spreads a bit misleading
IT SHOULD COME AS NO SURPRICE THAT THE PROSPECT OF electric competition has created a huge demand for price forecasting services. To their credit, the forecasters have obliged, supplying an abundance of tools and techniques. Do the forecasts serve the needs of those who would use them?
Some might wish to use a price forecast to assign a value to assets.
THE RUSSIAN FEDERATION WANTS U.S. UTILITIES AND businesses to know investments are welcome and that processes soon will ensure the safety of American ventures there.
Nevertheless, it appears to favor traditional, American-style utility regulation, setting rates of return and limiting profits.
The Federal Energy Commission of the Russian Federation wants to create competition wherever possible, according to Andrey F. Zadernyuk, the first chairman of the year-old commission.
FERC Commissioner Vicky A. Bailey named Robert H. Solomon as her new attorney advisor for electric matters. Solomon has been with the Office of General Counsel since joining FERC in 1988. He has held key positions such as Deputy Assistant General Counsel for Electric Rates and Corporate Regulation.
AmeriGas Propane Inc. announced the election of Richard C. Gozon as director. Gozon will replace Robert C. Forney who recently retired. Gozon is executive vice president of Weyerhaeuser Co.
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.