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Fortnightly Magazine - November 1 1995

Outsourcing Information Technology: One Step at a Time

David A. Miller

The challenges facing the information technology (IT) industry into the next century are significant. Yet so are the opportunities.

Pipeline Asks for Market-Based Rates

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has set for hearing a request by Koch Gateway Pipeline Co. (KGP) to charge market-based rates for firm and interruptible natural gas transportation services (Docket No. RP95-362-000). First, however, the FERC must conclude Docket No. RM95-6-000, which will delineate the circumstances under which it may approve market-based rates.

N.J. Updates Economic Development Rates

Phillip S. Cross

The New Jersey Board of Public Utilities (BPU) has approved a plan by Jersey Central Power & Light Co. to replace its existing economic development tariffs with a new "Business Enhancement Incentive" rider. The tariff revision would continue programs designed to further the building expansion and use plans of large customers by offering discounted rates, but would eliminate ineffective programs such as per-worker rebates, priority location rebates, and high energy-efficiency programs.

Flexibility: Key to Success When Outsourcing Information Technology

Paul Sweeny

In the utility industry's brave new world of deregulation, information technology (IT) (em and, specifically, "outsourcing" (em has acquired an entirely new meaning.

IT has become strategic. And important. So important that utility companies are seeking outside expertise to help them leverage technology to conduct business more efficiently, help grow revenues, and hone their edge in the new competitive world. Time has become an unaffordable luxury.

FERC to Examine MAPP's Membership Rolls

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) has set for hearing a request by Koch Gateway Pipeline Co. (KGP) to charge market-based rates for firm and interruptible natural gas transportation services (Docket No. RP95-362-000). First, however, the FERC must conclude Docket No. RM95-6-000, which will delineate the circumstances under which it may approve market-based rates.

Space Heating Discount Scrutinized

Phillip S. Cross

While approving a proposed rate discount program for new electric heating customers, the Maine Public Service Commission (PSC) has ruled that the program must meet "permanent load" requirements designed to protect ratepayers. Bangor Hydro-Electric Co. had filed proposals to market power to new electric heating customers at 5 cents per kilowatt-hour, as a temporary addition to its load requirements, with a price floor based on short-run marginal costs.

Cooperative Outsourcing: Securing Value from Information Technology

Ken Scott

As competitive pressures push utilities to look for new ways to do business, outsourcing the information technology (IT) function becomes increasingly attractive. By contracting for outside IT services, utilities can reduce costs and increase efficiency.

The decision to outsource, however, now goes beyond cost-cutting considerations. Companies are just as likely to turn to outsourcing when they want to concentrate on new business opportunities or dramatically change their overall structure.

Coalition Demands Congressional Action

Lori A. Burkhart

The Federal Energy Regulatory Commission (FERC) plans to investigate the membership requirements set by the Mid-Continent Area Power Pool (MAPP), especially as they pertain to power marketers (Docket Nos. ER94-1529-001 and 002, and EL95-77-000).

The FERC found last December that certain MAPP membership criteria are framed in terms of traditional utility attributes (em e.g., ownership of generation and transmission facilities, interconnected operation, system load and related reserve obligations (em that entities such as power marketers do not possess.

LDC Shifts Stranded Demand Costs

Phillip S. Cross

The Minnesota Public Utilities Commission (PUC) has authorized Northern Minnesota Utilities, a natural gas local distribution company (LDC), to insulate shareholders from the effects of losing a large firm sales customer by reallocating associated demand costs among remaining firm customer classes. It allowed the LDC to pass the increased costs through its purchased adjustment clause, finding that the utility was now alerted to the problem and had taken action to protect itself and its ratepayers from stranded costs caused by customers switching to interruptible transport service.

Electric Restructuring: An Urgent Proposal

Charles Studness

Technological advances in electric generation and telecommunications make utility competition both possible and inevitable. These economic forces will eventually break down the regulatory structure of the electric industry. However, public policy should play a crucial role in molding and nurturing competition.In recent months, regulators in a majority of the states have opened proceedings to study electric competition.

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