Fortnightly Magazine - June 1 1996

Consumers: Cost or Benefit?

s Cherry Picking

"If we ignore history, we're doomed to repeat it. And what happened in the natural gas industry is precisely what will happen. The FERC authorized deregulation of the natural gas industry and, as a consequence, today's retail consumers (em meaning residential retail consumers (em are paying more than twice as much for natural gas as the large industrial users.

CSW Communications Become First Exempt Telco

On April 4, less than two months after the Telecommunications Act of 1996 was enacted, the Federal Communications Commission (FCC) granted the first application allowing a public utility holding company, CSW Communications, Inc., to enter telecommunications markets (FCC 96-152). CSW is now an "exempt telecommunications company." The FCC noted that the entrance of utility companies as new competitors could result in lower prices and wider choices for consumers.

Unions: Odd Man Out?


"The short answer is 'yes'. . . . Utilities think they have to cut their costs in order to compete. The easiest way to cut costs is to downsize, get rid of people . . . which means they stop doing the work. And the result is a threat to the reliability of service.

NRC Reconsiders Decommissioning Funding

The Nuclear Regulatory Commission (NRC) is considering revising its regulations on nuclear plant decommissioning funding. Under current NRC regulations, adopted in 1988, an electric utility may set aside decommissioning funds annually over the estimated life of a plant. In a deregulated environment, however, a nuclear power licensee could lose its regulated rate base as a source to fund the balance of decommissioning expenses.

Management: Merge,. Divest, or Both?

s Merger Magic

"Occasionally, yes. There are obviously some fairly easily measurable synergies in some mergers. . . . The real issue, however,

is not whether there are savings. The real issue is could those savings have been obtained without concentrating the economic power that goes with a merger?

"Generally, we've dealt with it with judgment.

In Brief...

Sound bites from state and federal regulators.

Gas Franchise Rights. North Carolina adopts new rules on gas service expansion under a 1995 state law forcing incumbent gas distributors to forfeit exclusive franchise rights in unserved territory in certain cases, but allows a two-year grace period if the utility can show a commitment to build plant needed to reach unserved areas. Docket No. G-100, Sub 70, Mar. 19, 1996 (N.C.U.C.).

Firm vs. Interruptible. Idaho OK's proposal by Washington Water Power Co.


Oliver Richard is a gas man. His career includes a stint at the Federal Energy Regulatory Commission, as well as at Tenngasco, Northern Natural Gas Co., Enron, New Jersey Resources Corp., and The Columbia Gas System, Inc. Now he's found a new calling. He wants to be an ad man.

Several weeks ago I heard Richard describe his idea for the perfect 30-second TV spot to plug natural gas. Two utility CEOs are on the golf course. "Electricity costs too much," says one. "Some towns can't get gas service," says the other.

Illinois Approves Retail Wheeling Trials

The Illinois Commerce Commission (ICC) has OK'd experimental wheeling programs advanced by two of the state's major investor-owned utilities, Illinois Power Co. and Central Illinois Light Co. Both plans focus on large industrial customers, but Central Illinois would also allow direct access for commercial and residential customers over a five-year period in five defined test areas (called "open access sites").


Michael Baly, American Gas Association president and CEO, will chair the National Energy Foundation. He replaces Richard Lawson, president of the National Mining Association. Arthur Wiese, Jr., public affairs v.p. of the American Petroleum Institute, was elected vice chair.

Attorney Karen A. Tomcala was promoted to the staff of James J. Hoecker at the Federal Energy Regulatory Commission. Previously, Tomcala practiced in the FERC's electric rates and corporate regulation section.