The debate over restructuring the electric industry has encompassed a revisiting of the traditional rate-of-return (ROR) pricing model. Parties of widely divergent interests increasingly advocate alternatives. Under the label "performance-based regulation," these new pricing models share the objective of strengthening incentives for electric utilities incentives to pursue some specified "socially desirable" outcome.
Fortnightly Magazine - May 1 1996
A new policy at the Federal Energy Regulatory Commission (FERC) makes water depth a factor in deciding whether an offshore facility is primarily a gatherer rather than a transporter of natural gas (Docket No. RM96-5-000). The Natural Gas Act (NGA) requires the FERC to regulate transportation and wholesale transactions, but exempts gathering and production. Under the new policy, a facility that operates in depths of 200 meters or more will be considered a gatherer. The FERC hopes to encourage exploration and development of deep water reserves on the Outer Continental Shelf (OCS).
Electric utilities incur indirect financial costs when they turn to unregulated generators (NUGs) to buy power. These indirect costs can lead to lower bond ratings and undermine competitive advantage, depending upon the type of contract.
In this case we analyzed the combined effects of NUG power purchases on generating and capital costs for a representative utility (Utility A) with a relatively large amount of NUG purchased power.
The Federal Energy Regulatory Commission (FERC) has set for hearing a complaint by the Municipal Electric Utilities Association of New York (MEUA) against one of its members (the Town of Massena) and the New York Power Authority (NYPA). The complaint alleges that NYPA improperly agreed to sell low-cost hydroelectric power to an industrial customer, violating the Niagara Redevelopment Act as well as a FERC license assigning statutory preference to municipal utilities (Docket No.
A few weeks ago I picked up a copy of one of those law firm newsletters, this one published quarterly by Reid & Priest, titled the Utility Telecommunications Advisor.
Although the Federal Energy Regulatory Commission (FERC) issued a December 1995 order (Docket No. CP93-258-007) giving Mojave Pipeline Co. a green light to expand into California, the planned Northward Expansion Facilities have been tabled. The reason: A three-year delay caused by jurisdictional disputes between the FERC and the California Public Utilities Commission, as well as problems involving the FERC's contract-demand reduction policy, caused Mojave to lose its projected customer base.
A Moody's report, Legal Disaggregation Threatens Bondholder Security, warns that bondholders (em previously secured by a blanket lien on substantially all of a utility's property (em may find themselves secured solely by generating assets, whose real market value may be less than the outstanding secured debt. Moody's identifies 14 companies that may spin off transmission and distribution (T&D) assets, retaining generating assets because of indenture restrictions.
The Federal Energy Regulatory Commission (FERC) has conditionally approved market-based rates for power sales by MidAmerican Energy Co., finding a lack of generation market dominance (Docket No. ER96-719-000).
In 1994, the FERC granted MidAmerican's affiliate power marketer, InterCoast Power Marketing Co., authority to sell power at market-based rates, conditioned on the submission by Iowa-Illinois Gas & Electric Co. (MidAmerica's predecessor in interest) of a tariff providing comparable transmission service.
Nearly 18 million households are strong candidates for conversion to natural gas heating. So says the
American Gas Association (A.G.A.). The AGA estimates that 7.6 million natural gas customers don't use gas for heating and about 10.2 million households lack gas service, although it is available in their neighborhoods. To maintain its heating market dominance, the industry plans to promote the advantages of gas to homebuilders as well as to existing and potential customers.
Sound bites from state and federal regulators.
Electric Restructuring. North Dakota opens investigation on electric utility restructuring, asking how direct access might affect state utility customers, given the relatively small number of large commercial users. Case No. PU-439-96-54, Feb. 20, 1996 (N.D.P.S.C.).
Gas Storage Costs.