Fortnightly Magazine - May 1 1995

Using Hourly System Lambda to Gauge Bulk-power Prices

The electric power industry lies in the midst of major change, including a shift to market-based wholesale prices. Market players and regulators will recognize that competition requires a shift in thinking on key issues such as resource planning before the market is developed enough to provide adequate price information.

IEP Challenges BRPU Ruling

The Independent Energy Producers (IEP), a Sacramento-based independent energy advocacy group, has announced that it will petition for the Federal Energy Regulatory Commission (FERC) to reconsider its ruling that the California Public Utilities Commission (CPUC) violated the Public Utility Regulatory Policies Act (PURPA) by requiring two utilities to purchase power at above avoided costs (FERC Docket Nos. EL95-16-000 and EL95-19-000).


If anyone ever asks about what you read in this column, tell them you heard it somewhere else.

Of course, I don't really mean that. Let me put it another way: The FORTNIGHTLY gets invited here and there with the understanding that some things will end up in print, and others not. And while I never quote anyone if they were holding a fork or a glass, I do my best to bring back the inside story.

FERC Revamps Hydro Regulations

The Federal Energy Regulatory Commission (FERC) has approved a final rule on charges and fees for hydroelectric projects. Annual charges will now be assessed beginning on the date construction starts rather than when a license is issued (Docket No. RM-93-7-000). The rule eliminates annual charges for minor licensees (em projects of 1.5 megawatts or less (em and caps annual charges at two percent of total costs incurred by the FERC. To update its regulation, the FERC also substituted kilowatts for horsepower to determine capacity.


Sherrie Rutherford was named v.p. and general counsel of NorAm Gas Transmission, the pipeline and gas marketing subsidiary of NorAm Energy Corp. She succeeds Dale Earwood, who was promoted to president, NorAm Field Services.

MCN Corp. named Thomas J. Connelly director, investor relations. He previously was director, project finance.

Michael R. Weber was named manager, environmental affairs, for CMS Generation Co., the independent power subsidiary of CMS Energy Corp.

Paul L.

Nation's First RTG on its Way

As required under a conditional approval order issued in October, the Western Regional Transmission Association (WRTA) has filed its compliance agreement at the FERC (Docket No. ER94-1288-000). WRTA agrees to provide comparable transmission service, and has filed a transmission plan that gives individual members the right to make the final decisions on whether transmission facilities are built. WRTA has 31 members (em utilities, state agencies, and independent power producers (IPPs) (em that represent 70 percent of the transmission capabilities in the western United States.


NUGs Take the Cake

I take great exception to the presumption of Messrs. Costello, Burns, and Hegazy ("How State Regulators Should Handle Retail Wheeling," Feb. 15, 1995) that retail wheeling's "day will come." This is the oft repeated but never proven siren's song of Elcon's John Anderson and the other industrial/ cogeneration groups. The authors write: "For retail wheeling to become politically palatable, legislatures and PUCs must address the question of how to minimize the negative effects on core customers in the short term." Why?

Financial News

The financial community's focus on utility competition has been riveted on the proceedings now in progress at state regulatory commissions. The fear that something immediately damaging will come out of these proceedings seems to have diminished in recent months, and the stock market has reacted favorably. However, regulatory developments are only one of four paths leading to competition; the others are the marketplace, the legislatures, and the courts.

FERC Vindicates New York IPP Contracts

When the New York Public Service Commission (PSC) asked the Federal Energy Regulatory Commission (FERC) to reform the contract prices of two independent power producers (IPPs), Lockport Energy Associates, L.P. and Saranac Power Partners, L.P., the move triggered a call to arms from the Independent Power Producers of New York, Inc. (IPPNY). And in the pitched battle that followed, IPPNY did indeed emerge victorious. The IPPs sell electricity to New York State Electric and Gas Co.

NGVs -- Are Ratepayer Subsidies Appropriate?

According to the Natural Gas Vehicle Coalition (em a national organization of local natural gas distributors, pipelines, and equipment manufacturers promoting natural gas vehicles (NGVs) (em the U.S. government supports our country's continued reliance on petroleum-based fuels for transportation through billions in subsidies and tax incentives.