Fortnightly Magazine - May 1 1996

Outsourcing Fleet Management: Boon or Bust?

To an outsourcing company, offering services to utilities to manage their motor vehicle fleets may seem like a simple economic proposition. "We can do it better and cheaper," the outsourcers say.

But it's not that easy. Thorny issues arise (em in economics, quality, administration, and labor relations. And they must be faced head on.

Few utilities today have avoided outsourcing one function or another in the effort to cut costs. Some utilities have been burned.

Transportation Banking Refined by LDC

The West Virginia Public Service Commission (PSC) has authorized Mountaineer Gas Co. to set up a method to compensate interruptible transportation customers for "banked" over-deliveries eventually used by other sales customers. The company historically permitted its transportation customers to bank excess volumes, and used the gas to reduce purchases for sales customers.

Under the new method, the company will buy current and future banked supplies at a "market determined" rate.

Leave it to the Experts

As utilities refocus resources on their core business, they are developing strategic partners to manage day-to-day support services more efficiently. Operational functions that received scant notice in the past are now identified as areas for big savings.

Transportation services mark one such area. Activities like vehicle acquisition, resale, maintenance, fueling, and routine administration are now widely viewed as outsourcing opportunities (em to reduce costs and enhance productivity.

Appeals Court Holds FP&L Immune From QF Antitrust Complaints

The U.S. Court of Appeals for the 11th Circuit has ruled that Florida Power and Light Co. (FP&L) is protected by the state action immunity doctrine from liability to cogenerators (QFs) for alleged antitrust violations. The QFs had claimed that FP&L violated federal antitrust laws when it refused to wheel their power to offsite end users.

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