My business, the natural gas industry, stands at a crossroads. Unbundling and deregulation permeate the market. The next three years will see the end of many fixed, long-term supply and transportation service contracts (em the closing of an era.
In fact, natural gas marks perhaps the last commodity traded on a major exchange that remains captive to such long-term contracts. The demise of such contracts will add flexibility to gas pricing and supply management.
This evolution will accelerate with a host of changes in the way gas moves in wholesale markets.
Let's hope that by now we all prefer market solutions to government mandates. Markets are generally more efficient and equitable. Recent experiences with deregulation for airlines and telecommunications have vindicated Adam Smith's notion that the "invisible hand" can prove superior to regulation.
Unfortunately, this knowledge offers little comfort today to natural gas pipelines (em even to those companies not saddled with a surplus of transportation capacity.
The Nuclear Regulatory Commission has a five-member slate for the first time in over three years. Recently sworn in were Nils J. Diaz and Edward McGaffigan, Jr. Diaz was a professor of nuclear engineering sciences at the University of Florida; McGaffigan, a former foreign service officer, was a senior science and defense advisor to U.S. Sen. Jeff Bingaman (D-NM). William T. Russell, NRC director of nuclear reactor regulation (NRR), retired September 30. Frank J.
Ohio Edison Company and Centerior Energy Corp. announced an agreement September 17 on a tax-free, stock-for-stock merger to form a new holding company, FirstEnergy Corp., worth about $4.8 billion, based on stock prices that closed several days earlier.
The news came a month after two other merger deals were announced in mid-August: 1) Atlantic Energy, Inc. and Delmarva Power & Light Co. ($2.2 billion), and 2) Houston Industries Inc. and NorAm Energy Corp. ($3.8 billion). NorAm is the nation's third-largest U.S. natural gas utility.
Professor Peter Navarro, who teaches economics and public policy at the University of California at Irvine, writes in the Harvard Business Review (January-February 1996) that "[t]he deregulation of the electric utility industry represents an important opportunity to enhance the country's competitiveness and improve the standard of living for its citizens. ...
Madison Gas and Electric Co. (MGE) has asked the Federal Energy Regulatory Commission (FERC) not to approve the proposed merger of Wisconsin Energy Corp. (WE) and Northern States Power Co. (NSP) to form "Primergy." MGE claims that the merger would not only subject Wisconsin's electric consumers to higher prices, but severely impair competition.
According to Mark Williamson, MGE senior vice president of energy services, the Primergy merger would create market concentration in generation and transmission, resulting in market power abuses and anticompetitive conduct.
Three separate utilities have formed subsidiaries:
s The Columbia Gas System, Inc.'s new unit, Columbia Service Partners, Inc. will market new, nongas needs to homeowners and businesses, including warranty, fuel management, and gas-line repair services.
s Brooklyn Union's new gas marketing affiliate, KeySpan Energy Services, Inc., will buy and sell gas and provide transportation and related services, first to commercial and industrial customers, then to aggregated commercial and residential customers.
Peter C. Nelson was named president and CEO of California Water Service Co. Nelson also will be a director. He comes from Pacific Gas & Electric Co., where he was v.p.-division operations. He replaces the retiring Donald L. Houck.
Jack Lucido of ANR Pipeline Co. was elected to the American Gas Association's pipeline research committee, succeeding Gary Walker of Pacific Transmission Co.
The Electric Power Research Institute hired Karl G. Van Orsdol as senior manager, international relations.
Entergy Corp. has hired John A. Brayman, former president of Ameritech Corp.'s telephone industry services subsidiary in Chicago. Brayman will continue company expansion into nonregulated, domestic energy, and utility-related business as executive v.p. of Entergy Enterprises, Inc. and president of an as-yet unnamed group.J. William Holden was named Southern Electric International's v.p. for operations and development in Latin America and the Caribbean.
GE Supply, a General Electric division, promoted William C. Betke to g.m.
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