Southern California Edison

Sound bites from state and federal regulators.

Natural Gas Briefs

Gas Marketing Affiliates. Indiana finds no jurisdiction to regulate Proliance Energy, LLC, a brokering and energy services affiliate of Indiana Gas Co., Inc. and Citizens Gas and Coke Utility, but says it will regulate the utilities in their transactions with Proliance. Case No. 40437, Sept. 27, 1996 (Ind.U.R.C.).

Gas Regulatory Reform. Ohio proposes alternative regulatory procedures for natural gas local distribution companies. Case No. 96-700-GA-ORD, Sept. 26, 1996 (Ohio P.U.C.).

Employee Incentives.

Having decided that California's three major investor-owned utilities (IOUs) exert greater market power in generation and transmission than the IOUs had let on in detailed studies filed last summer, but finding no purpose in asking for a second round of hefty documents, the Federal Energy Regulatory Commission (FERC) has decided to explore options for mitigating such market power before approving the proposal by the IOUs (Southern California Edison Co., Pacific Gas & Electric Co., and San Diego Gas and Electric Co.) to form a Power Exchange (PX) and Independent system Operator (ISO).

Moody's Investors Service has confirmed the debt ratings of California's three largest IOUs (em Pacific Gas and Electric Co. (PGE: Sr. Secured A2), San Diego Gas and Electric Co. (SDG&E: Sr. Secured A1), and Southern California Edison Co. (SCE: Sr. Secured A2) (em following passage of AB 1890, the California legislature's restructuring bill.

Moody's says that legislative endorsement of stranded-cost recovery is a favorable development for utility creditors, but notes that ultimate recovery depends on regulatory approval.

About a year ago I stuck my neck out to predict that electric utilities might end up with stranded investment in transmission lines. I suggested that financial commodities trading-longs, shorts, and hedges-might supplant physical product movements. It's happened in natural gas, where the interstate pipelines have suffered from "decontracting" and capacity "turnback"-a phenomenon that has tended to move from West to East.

The California legislature had taken an interest in electric restructuring from early on in the debate. Through policy committees of the Assembly and Senate, it had signaled that the CPUC would need the blessing of the lawmakers before it would be allowed to pursue the ideas spelled out in the commission's Final Policy Decision. Moreover, the December 1995 decision had drawn a divided reaction. Some parties had sought relief from the outcome of the December 1995 order.

a fortunate few, opening up competitive options even

in advance

of 1998.With a fountain pen and a flourish of promises, California Gov.

Despite a recent delay, the stage

appears set for online trading

in electric transmission capacity.

THIS IS ONLY A TEST (EM FOR NOW.

But come January, if all goes well, the OASIS program will start up in real time, with customers venturing onto the Internet to place reservations for capacity on the nation's electric transmission grid.

NIPSCO wins top prize for customer information

system deemed state-of-the-art.

Runner-up Brooklyn Union melds Internet

technology with internal systems.To borrow a phrase, only three things matter in energy competition: technology, technology, and technology.

An exaggeration, perhaps, but not too far off for the three-dozen-plus electric and gas utilities that submitted applications for the 1996 Utility Leadership Award for Information Technology (em ULTRA for short.

Sponsored by PUBLIC

The California Public Utilities Commission (CPUC) has authorized Pacific Gas and Electric Co., Southern California Edison Co., and San Diego Gas and Electric Co. to guarantee notes totaling $250 million for loans to two trust funds to support the development of computer hardware and software for the state's proposed independent system operator (ISO) and power exchange (WEPEX), but commissioner Jesse J. Knight has dissented, worrying about cost control.

As noted in a parallel story ("PUC Loans Would Bolster ISO, Power Exchange," Headlines, p.

The California Public Utilities Commission (CPUC) has approved loan guarantees of up to $250 million to fund development of computer hardware and software to help the electric industry establish the independent system operator (ISO) and the Power Exchange (PX), both key components of the CPUC's proposed restructuring plan.

Pacific Gas & Electric Co. and Southern California Edison Co. each had asked for $112.5 million in loan guarantees; San Diego Gas & Electric Co. had asked for $25 million.