Since the federal Court of Appeals decision in the Calvert Cliffs case over 25 years ago, no power plant may be built without a thorough socioeconomic impact statement. Yet, schemes to alter the entire supply system of a state - or even the nation - are currently proposed with only cursory attention to socioeconomic consequences.
Fortnightly Magazine - May 15 1996
Investors are taking stock
of utility exposure to price competition.The utility trade press and even the general financial press have featured the views of regulators, utility executives, legislators, and various consumer advocates on the stranded-cost question. Stranded costs easily represent the most contentious issue facing the electric industry as it moves to an era of competition.
If the new rules of electric industry competition don't permit stranded-cost recovery, the credibility of the U.S. government would be seriously undermined. Or so an executive of one of the country's largest utilities told a Senate energy panel."We just have to keep in mind we incurred these costs based under what the rules were," said Jerry Jackson of Entergy Corp. "If the government is going to change those rules . . .
Giving up today's customer to retail wheeling could help cut losses tomorrow.
Estimates of stranded investment for U.S. investor-owned electric utilities (IOUs) range from as little as $20 billion to as much as $500 billion (em more than double the shareholder equity in U.S. utilities.
TET had asserted in February that its monthly imbalance mechanism enabled shippers to game the cash-out mechanism during the recent rapid and large price fluctuations in the spot gas market.
for closure or removal of long-lived assets
will bring costs out into the open.
But is it rational?
On February 7, 1996, the Financial Accounting Standards Board (FASB) issued for comment an "Exposure Draft" of a new proposed statement of financial accounting standards pertaining to nuclear plant decommissioning and other similar legal obligations,
The Federal Energy Regulatory Commission (FERC) has conditionally allowed QST Energy Trading, Inc., a subsidiary of Central Illinois Light Co. to make sales to nonaffiliates as well as to an affiliate, QST Energy, Inc. (FERC Docket No. ER96-553-000). In turn, QST Energy would sell power in Illinois to customers located outside the service territory of Central Illinois.
Paper trading is here, introducing an element of speculation in wholesale electric markets.The electric power industry joined the commodity markets on March 29, 1996, when power futures began to trade on the New York Mercantile Exchange (NYMEX). This first tentative step in the commoditization of electricity promises the emergence of a paper market for power, which, as in the case of other commodities, will likely prove substantially broader and more complex than electricity's physical market.
The New England Electric System (NEES) has filed with the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission for authority to separate
generation and transmission, and to create a
transmission subsidiary called NEES Transmission Services, Inc. NEES Transmission has filed proposed transmission tariffs at the FERC that would give its wholesale customers, including New England Power Co.
I don't know about you, but the Internet is driving me carzy. Every week I discover a half-dozen new home pages to add to my reading list. Some may view NetscapeÔ as an investment play. I see it as drama.
As a magazine editor (em someone who gets paid to follow the news (em I feel guilty if I don't click on every link and download every file. I call it the "obligation to surf." And the problem grows worse as more government agencies post their decisions online.