Competition, Convergence...and Cashflow?
COMPETITION, CONVERGENCE ... AND CASHFLOW? THE POWER BUSINESS IN THE NEXT 20 YEARS
APRIL 01, 1996
Fortnightly Magazine - April 1 1996
APRIL 01, 1996
FERC Investigates ISOs
The Federal Energy Regulatory Commission (FERC) on January 24 held a technical conference on independent system operators (ISOs) and power pools, as part of its electric transmission open-access Notice of Proposed Rulemaking (NOPR). The FERC's question: Is it necessary in a competitive market for utilities to transfer control over transmission facilities to ISOs, and if so, what form should ISOs take? (18 CFR Part 35, Docket Nos. RM95-8-000 and RM94-7-001).
Byline:
Lori A. Burkhart
Low-usage Customers Bumped from Dsm Program
Despite complaints from customers, the Florida Public Service Commission (PSC) has approved Florida Power Corp.'s plan to reduce incentive payments under existing load-management rate programs by one dollar, and
to limit eligibility to customers that use at least 600 kilowatt-hours. The PSC said the usage limitation would "restore the cost-effectiveness" of residential load management, which is designed to reduce peak demand, not energy usage.
Byline:
Phillip S. Cross
The Economics and Politics of Western Coal
Wyoming and Montana
are cracking Midwest coal markets,
despite local protectionism.
As pressures build steadily toward deregulation and increased competition between electric power generators, Western low-sulfur coal is emerging as the most economical fuel option for an increasing number of companies. The low cost of delivered fuel and avoidance of capital outlays offer attractive savings.
Byline:
John Q. Anderson and Jerry C. Bartlett
Pipelines Gain Rate Flexibility
The Federal Energy Regulatory Commission (FERC) has approved a policy statement, Alternatives to Traditional Cost of Service Ratemaking for Natural Gas Pipelines, giving pipelines greater flexibility to use market-based, negotiated/ recourse, incentive, and other alternative rates (Docket Nos. RM95-6-000 and RM96-7-000). Pipelines may negotiate new rates with customers, but may not negotiate services that might degrade open-access service under Order 636. The FERC is still considering what type of service flexibility it should allow.
Byline:
Lori A. Burkhart
Industry Reorg. Prompts Same at Corporate Level
The California Public Utilities Commission (CPUC) has approved a corporate reorganization plan making San Diego Gas and Electric Co. (SDG&E) a wholly-owned subsidiary of a holding company structure formed by the utility. The utility said the reorganization would provide the separation of lines of business necessary to insulate regulated utility cash flows from the volatility and risk of competitive markets.
Byline:
Phillip S. Cross
Blowing the Whistle on the Coal Train
Before the express train leaves the station, it's worth taking a look at the facts about new electric generating capacity in the United States.
Natural gas has become the primary energy source, accounting for about two-thirds of new capacity during the 1990. In contrast, market share for coal-which currently accounts for over 40 percent of all online capacity, and about 55 percent of online fossil-fuel capacity-is expected to grow only 10 to 15 percent in this decade.
Byline:
Michael Baly
FERC Begins Inquiry, Gives Guidance in "Primergy" Order
The Federal Energy Regulatory Commission (FERC) has announced that it will revisit its 30-year old electric utility merger policy (Docket No. RM96-6-000). The Notice of Inquiry (NOI), Merger Policy Under the Federal Power Act, also orders an expedited hearing on the proposed merger between Wisconsin Electric Power Co. (WEPCO) and Northern States Power Co. (NSP) to form "Primergy" (Docket Nos.
Byline:
Lori A. Burkhart
Wisconsin Uses Bidding Threat as DSM Incentive
The Wisconsin Public Service Commission (PSC) has decided to add a "performance mechanism" to its regulations governing demand-side management (DSM) efforts. The PSC found that some utilities were no longer meeting the DSM goals set in their rate cases.
Byline:
Phillip S. Cross
Frontlines
On a bookshelf behind my desk I've stacked up a few older issues of PUBLIC UTILITIES FORTNIGHTLY. Some of them go back more than a half-century. Every so often I pull down a copy to see if I can learn anything from history.
Yes, the advertisements appear quaint (Royal typewriters; IBM punch-card machines; Ditto-brand duplicators). But some of the ideas still have legs, with lively quotations from the likes of Louis Brandeis, Harold Ickes, Walter Lippmann, and Fiorello La Guardia.
Byline:
Bruce W. Radford