Lori A. Burkhart, and Regina R. Johnson
Online services are popping up - for commodity trading, retail marketing and back-office billing. But is the Web right for every application?
A recent study by Connecticut-based META Group Inc. finds that while less than 5 percent of all utility commerce will be conducted electronically in 1999, 30 percent of customer service and retail bill payments will flow over the Internet by 2004. That prediction highlights a torrent of Web activity in recent months, from power trading online to retail solicitations to electronic customer billing and payment.
News Digest was compiled by Carl J. Levesque, editorial assistant, Lori A. Burkhart, contributing legal editor, and Bruce W. Radford, editor. For continual news updates, see www.pur.com.Nuclear Power
Transmission & ISOs
Transco Independence. Granting Entergy's request for a declaratory order, the Federal Energy Regulatory Commission ruled in a case of first impression that a stand-alone transmission company ("transco") would meet the test in Order 888 for independent system operators despite passive ownership by a power producer or other market participant.
Bruce W. Radford
MIT professor Paul Joskow asks the FERC how its rulemaking will help consumers.
By Aug. 23, the electric industry had filed over 150 separate comments - nearly 4,000 pages - telling the Federal Energy Regulatory Commission what it thinks about regional transmission organizations.
All other stories pale in comparison. The commission's proposed rulemaking on RTOs would reinvent the electric transmission business. The case gives economists a once-in-a-lifetime opportunity to instruct a government agency how to design and build a market from the ground up.
PUCs turn their attention to what they can still control.
The battleground has shifted. Utilities that last year worried about winning customers in pilot programs for retail choice now face public audits on the reliability of transmission and distribution.
With rate cases in remission, no nukes on order and generation planning left to the market, public utility commissions are turning their attention to what they can still regulate. That means service quality. Nor are PUCs the only ones involved.
The state foots the bill, while northern neighbors profit from a managed power market.
California's electric restructuring plan, launched on April 1, 1998, marks one of the most ambitious attempts in U.S. history to place the state in a social engineering role. Not only was the scale of the project daunting, with implementation cost estimates running as high as $1.2 billion, but the plan places California government in control of the most minute components of the electric system.
How has the experiment gone?
Lori A. Burkhart, Phillip S. Cross, and Carl J. Levesque
Studies and Reports
Natural Gas Retail Choice. Utility affiliates hold large market shares in natural gas customer choice programs, raising questions about the extent of true competition, according to a study released on Dec. 15 by the U.S. General Accounting Office. Participation varies by region, however, according to the report, "Energy Deregulation - Status of Natural Gas Customer Choice Programs."
In Pennsylvania, for example, three out of four programs showed very high shares for utility affiliates. The Equitable Gas Co.
Dean Maschoff, James Pardikes, David Thompson, Michael Rutkowski, and Nainish Gupta
Sales prices for power generation assets in the United States during the past two years have climbed to unprecedented levels. This trend should continue. More than 20,000 megawatts of generation assets have been sold, with another 20,000 MW announced. During the next five years, it is expected that 70,000 to 140,000 MW will change hands. We have seen only the beginning of a massive redistribution of generation assets - from regulated utilities to unregulated marketers and plant operators.
In fact, the prices we've seen for generation assets may turn out to be bargains.
Carl J. Levesque
Rising projections, with few expenditures to date, paint an uncertain picture.
"In almost all cases, companies will have material events and changes requiring updated year 2000 disclosure in each quarterly and annual report filed with us."
That was the general mandate suggested by the Securities and Exchange Commission last summer in its interpretive release on the disclosure requirements for the Y2K issue.
Joseph F. Schuler, Jr.
Policymakers reflect on how it "coulda been." Nearly all insist "my state did it best."
California, Massachusetts, New Hampshire and Pennsylvania have deregulated their electricity markets. Yet they're all ironing out wrinkles. California at press time was bracing for a vote on the Proposition 9 recall petition. New Hampshire still faced federal lawsuits filed by Public Service of New Hampshire seeking to quash efforts to bring competition to the state. (See, U.S. District Court, Concord, Docket No. 97-97-JD; U.S. District Court, Providence, Docket No.
Lori A. Burkhart, Phillip S. Cross, and Beth Lewis
ISO GUIDELINES. Marking a contrast with California, but lining up with states in the Northeast, the Iowa Utilities Board has urged that independent system operators should have authority to order redispatch to help fulfill service requirements for electric transmission. That rule came as part of a set of principles issued by the board to guide the formation of ISOs in managing electric transmission systems and preventing the exercise of market power.