Ever since word hit the street last July that Portland General Electric Co. (PGE) would merge with gas industry giant Enron, the news has been rather one-sided. It's been "Enron this" and "Enron that." From reading the papers one might think Enron, with its strong reputation as a commodities trader, was buying an entire electric utility simply to take a bigger position on the NYMEX futures market.
Fortnightly Magazine - January 1 1997
Peter R. Thomas was hired from Sprint as v.p. of American Electric Power's new communications subsidiary, AEP Communications, Inc.
Central Illinois Light Co. hired Todd Severson as human resources v.p. He comes from Remco, a subsidiary of Thorn Americas.
Scott A. Neitzel, a member of the Wisconsin Public Service Commission since January 1992, has resigned. Neitzel chaired the PSC's electric utility industry restructuring committee.
Ohio Edison Co.'s board of directors elected chairman and CEO Willard R. Holland as its chairman.
The Texas PV Coalition has been formed to speed commercial availability of photovoltaic systems as a service alternative to extending utility lines. The coalition, which will be managed by Planergy, Inc., an independent energy service company, includes Rio Grande Electric Cooperative, Inc.; Wise Electric Cooperative, Inc.; Tri-County Electric Cooperative, Inc.; and Lubbock Power & Light. Funding to the tune
of $250,000 was provided by the Utility Photovoltaic Group (backed by the U.S. Department of Energy) and the Texas State Energy Conservation Office.
The Vermont Public Service Board (PSB) has issued its draft utility restructuring plan, proposing competitive wholesale and retail markets for generation with regulated monopolies for transmission and distribution (Docket No. 5854). The state's largest investor-owned utilities would be required to functionally separate their generation and distribution functions into corporate subsidiaries.The plan builds on the Vermont Restructuring Principles adopted by the PSB last May.
Retail customer choice is scheduled as early as January 1, 1998.
Taking The Long View
In today's market, with competition imminent and natural gas still cheap, nuclear generation appears dicey. The popular view tags nuclear with high costs and suspect availability, even without reaching the more fundamental issues of safety and waste disposal. One wonders: What advantages lie open to nuclear power?
Many observers see excess capacity running rampant and commodity prices falling across the board as deregulation accelerates and power flows more freely across markets and service territories.
No one needs to tell the readers of PUBLIC UTILITIES FORTNIGHTLY about the technical, economic, regulatory, and institutional obstacle course facing the nuclear power industry. All you need do is look around to see an industry struggling to live up to expectations. Some would term the nuclear outlook "grim:"
• No economic incentives to build new nuclear plants.
• No new plant orders in the United States (a modest complement of foreign orders)
• Precious few attempts to renew operating licenses; even fewer succeed.
Targeted Debt: Give the Stockholders What They Want
Too much leverage can be risky, but sometimes it's just what the doctor ordered.
One of the reasons that stockholders in Columbia Gas survived a Chapter XI proceeding more nearly intact than owners of other bankrupt utility enterprises was that the parent holding company was a secured creditor of its operating subsidiaries at the time of the filing.
Talk runs gamut from "rocket docket" to "Just go slow." A merger announcement kickstarted NARUC's annual conference last year. This year, in San Francisco, there was little difference in conference chatter. Only this time, MCI Communications Corp. and British Telecommunications Plc were the suitors, in a $20 billion corporate marriage.
Regulators had better get used to the "M" word, noted speaker John E. Hayes, Jr., chairman of Western Resources Corp.
Sound bites from state and federal regulators.
Natural Gas Briefs
Gas Motor Vehicles. Federal appeals court revokes antitrust immunity in suit by California CNG, Inc., alleging that Southern California Gas sought to dominate gas vehicle (NGV) refueling market by offering "free or virtually free" installation and maintenance of refueling facilities for NGV fleet operators. No. 95-55806, Sept. 19, 1996, 96 F.3d 1193 (9th Cir.).
The West Virginia Public Service Commission (PSC) has criticized a request by Shenandoah Gas Co. to require its residential and commercial customers to pay the lion's share of a newly approved rate increase, citing the utility's cost studies as "flawed" and its cost allocations as having compounded the error.
The company had argued that its cost studies showed that interruptible customers were already generating a 45 percent rate of return, while rates for its firm customers produced a negative return on the investment necessary to serve them.