Some states have become well-known for their regulatory or legislative initiatives on electric restructuring and customer choice. Among those drawing the greatest attention are California, New Hampshire, Rhode Island, Massachusetts, New York, and Texas.
At press time, reports were filtering in of legislation about to be introduced in Montana and North Carolina (em states that might be considered unlikely subjects for competitive initiatives.
Southwestern Electric Cooperative Inc. has notified Soyland Power Inc. it will terminate its electric supply contract and buy its full requirements from Cinergy Corp.
The cooperative said it can buy the wholesale power from Cinergy at a lower price. It is expected to start receiving electricity in April under a five-year contract. The agreement includes other services Cinergy may provide to Southwestern Electric Cooperative, such as economic assistance and new-business development opportunities.
The New York Public Service Commission has authorized Brooklyn Union Gas Co., to amend its existing business-incentive and area-development rate programs.
Brooklyn Union provides rate reductions for new or expanding businesses in 26 specified regions under the area-development program. It also has provided similar benefits for new or expanding businesses under a system-wide, business-incentive rate program.
An insider recounts the twists and turns that led to a new state law and new rights for the state's electric consumers. On Dec. 3, 1996, Gov. Tom Ridge signed into law Pennsylvania's Electricity Generation Customer Choice and Competition Act (em a historic statute that will introduce competition in the retail market among suppliers of electric generation. The act passed primarily because of strong leadership from the governor and others.
Cities throughout the U.S. contemplating take over of a privately owned utility may be more likely to move forward now that the governor of New Mexico signed legislation that has made such a prospect easier in that state.
New Mexico Gov. Gary Johnson (R) on April 11 signed H.B. 1181, which allows the city of Las Cruces to condemn property owned by El Paso Electric Co., paving the way for the municipality to take over the local electric distribution system.
"We're very pleased," said Christopher Good, a spokesman for the city. Las Cruces plans to move forward from here, he added.
While directing PNM Gas Services ( a division of Public Service Company of New Mexico) to reduce rates for gas service, the New Mexico Public Utility Commission has redesigned residential rates to reinstate the once-discredited notion of recovering fixed costs in the commodity charge.
In the same case, the commission also rejected recovery of discount costs and other fees the utility paid and a proposal by the utility to "rebundle" sales and transportation rates by end-use class.
The PUC ordered PNM to reduce gas service rates $6.958 million.
Professor Shepherd sees selective price cutting as anti-competitive, but even a monopolist should be allowed to compete on price.
As the electric industry deregulates, state public utility commissions are asked increasingly to allow the local utility to offer price discounts to large-load customers who might otherwise turn to other sellers. So far, nearly all the PUCs faced with this issue have agreed that such discounts are beneficial: They help retain large-load customers, who help pay the utility's fixed costs.
The Minnesota Legislature is poised to pass a bill that would allow the state to take full advantage of any relief granted by federal courts in pending cases over the U.S. Department of Energy's nuclear waste disposal obligations.
State Senator Steve Murphy and state Representative Steve Timble introduced the legislation, which has support in both Houses. The legislation was introduced to ensure that state ratepayers would see immediate relief if ordered by federal courts in pending cases in the next several months.
The Virginia State
Corporation Commission has authorized Delmarva Power and Light Co. to close two experimental load-management tariffs to new customers.
Nevertheless, the utility said it would continue to call upon existing program participants to mitigate system emergencies throughout the year.
One program, established in 1988, offered billing credits to customers who agreed to establish a firm service level and then curtail load to that level at the company's request during peak management billing months of June through October.
A simple formula method shows utilities exactly how much to discount prices. Electric utilities have drawn attention recently (and criticism from some quarters) for granting off-the-tariff discounts to customers deemed at risk for migration to lower-priced competitive alternatives. Typically, utilities have offered discounts to high-load customers in exchange for a long-term purchase commitment providing either more certain earnings, higher expected earnings, or both.
