Calendar of Events

Sep 29, 2014 to Oct 03, 2014 | Michigan State University, Lansing MI
Oct 01, 2014 to Oct 03, 2014 | Washington, DC

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Public Utilities Reports

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Williams

Perspective

Edward L. Flippen

With benefits unclear, PUCs will "go slow."

California, New Hampshire, Massachusetts, Nevada, Pennsylvania, Rhode Island, and Vermont have given customers the right to choose their electric providers.

Other states are considering similar legislation.

In Congress, U.S. representatives Schaefer (R-Colo.), Markey (D-Mass.), DeLay (R-Tex.), and U.S. Sen. Bumpers (D-Ark.) and others have slapped bills on the table that would give choice to electric customers on a national scale.

Joules

A $35 million, 45-mile Texas-to-Mexico natural gas pipeline is set to be ready by mid-December. With a capacity of 212 MMBtu/d, the 24-inch diameter pipeline will supply the 700-megawatt Samalayuca I and II power plants, set partially to open in 1998. El Paso Natural Gas Co. and El Paso International Co. are partnered with Pemex Gas Y Petroquimica Basica in the 50-50 joint venture.

El Paso International also has signed a joint development pact with Furnas Centrais Eletricas S.A., BHP of Brazil Energy, Centrais Electricas Brasileiras S.A., and British Gas of Brazil.

Frontlines

Bruce W. Radford

Let me tell a story. A consultant I know works as the lead negotiator for a Native American tribe that sells fuel to electric generating plants. On occasion he visits the reservation to discuss business plans with the tribe, exploring various scenarios for utility restructuring.

Recently, this consultant said he found himself in the ceremonial council lodge, instructing tribal leaders on decision trees and discounted cash flows. When he finished, the younger members conferred briefly in their native language.

Pipeline Restructuring: Slicing a Shrinking Pie

Bruce W. Radford

THE FERC TAKES SUGGESTIONS ON THE FUTURE OF THE GAS INDUSTRY.

Earlier this year, the Federal Energy Regulatory Commission opened a discussion of issues facing the natural gas industry. Its aim? To set "regulatory goals and priorities" for the era following from Order 636, issued in 1992. %n1%n

To gather input, the FERC scheduled a two-day public conference. It asked for comments on a myriad of topics, ranging from cost-of-service rates to hourly gas pricing and services.

FERC Ends Summer Session Without Fanfare

Lori A. Burkhart

No clear signal as yet from new chair James Hoecker.

The Federal Energy Regulatory Commission had a busy day on July 30, but observers will have to wait until the fall to learn of any new wide-ranging policy initiatives planned by incoming chair James Hoecker, who has now succeeded Elizabeth Moler in the top post.

The end-of-summer meeting (em and Commissioner Donald F. Santa Jr.'s last (em was marked largely by a lack of controversy.

NEES to Hold First Auction

Lori A. Burkhart

New England Electric System has selected 12 companies from the U.S. and Europe to take part in an auction to supply electricity to Massachusetts and Rhode Island "standard offer" customers when retail competition begins.

Standard-offer service is set at seven years in Massachusetts and 12 years in Rhode Island. When competition begins, slated for Jan. 1, 1998 in both states, consumers can choose a new energy supplier through the standard offer.

Far From Closure: No Consensus Yet on Accounting Proposal for Decommissioning

John S. Ferguson

In aiming to make financial statements more meaningful, will FASB instead make them indecipherable?

By mid-summer, a total of 123 companies had cranked out some 574 pages of comments, detailing exactly what they thought of the accounting rules proposed by the Financial Accounting Standards Board to cover the closure or removal of certain long-lived assets. %n1%n The FASB's"Exposure Draft," issued early last year, had requested comments on eight issues. The respondents answered as requested, but also raised a host of new questions.

What's a Power Plant Worth

Jeffrey P. Price

"Spark spread" sets value, but as prices diverge from system

lambda, merchant plant buyers will be flying blind.

Many power plants will be bought and sold in the next decade. Some utilities will divest power plants as required by regulators; others will sell for strategic reasons. Most of the plants sold likely will become merchant plants, with no guaranteed market for their electric output. Merchant plant activity is already significant and growing. The value of these plants will depend on how well they can perform in an uncertain market.

Why Special Contract Discounts are Good For Electric Competition

Paul F. Hanzlik, and David B. Goroff

Professor Shepherd sees selective price cutting as anti-competitive, but even a monopolist should be allowed to compete on price.

As the electric industry deregulates, state public utility commissions are asked increasingly to allow the local utility to offer price discounts to large-load customers who might otherwise turn to other sellers. So far, nearly all the PUCs faced with this issue have agreed that such discounts are beneficial: They help retain large-load customers, who help pay the utility's fixed costs.

People

CMS Energy Corp.'s energy marketing unit, CMS Marketing, Services and Trading, hired David B. Geyer as v.p., risk management. Geyer's responsibilities include hedging, arbitrage and trading. CMS Generation Co.'s contract with Thailand's AMATA-EGCO Power Ltd., prompted the promotion of W. David Carni from operations superintendent to operations and maintenance plant manager.

Walter J. Gilbert, Volunteer Energy Corp. v.p., will head the company's newly opened office. Gilbert's added duties include special projects relating to gas acquisition, gas purchasing and marketing.

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