Fortnightly Magazine - May 15 1997


A new study takes a look at using the benefits of electric utility deregulation to increase trade and investment between the U.S. and Mexico. Published by the Salt River Project, or SRP, and the Comision Federal de Electricidad, the study aims to help companies understand the legal and regulatory regimes of the two countries and the potential opportunities to buy and sell power across the border via high-voltage interconnections. Others involved with the study included the

U.S. Agency for International Development, Price Waterhouse and Bechtel.

Restructuring Backlash Hammers States

Electric restructuring at the state and federal levels is moving forward fast (em too fast for some. Utilities, unions, consumers and even legislators are making their opposition known by filing lawsuits to block or slow down various restructuring initiatives, from New England to Dixie to the Desert Southwest.

Rolling Back Legislation

Pennsylvania and New Hampshire already have enacted legislation to guarantee customer choice in retail electric markets. Even so, some parties are asking for a rollback.

Texas Orders Rate Cuts; Legislation Unlikely to Pass

In the first order under a 1995 law designed to increase competition in the electric wholesale market, the Texas Public Utilities Commission ordered Central Power & Light Co. to cut rates.

Meanwhile, Moody's has predicted that legislation introduced in the Texas Senate and House giving choice to small ratepayers is unlikely to pass.

Rate Cut. On March 31, the PUC ordered a $32.3-million rate cut for Central Power & Light Co. retroactive to May 1996. An additional $16.4-million rate cut must be implemented annually in 1998 and 1999 (Docket No. 14965).

"Desert STAR" May Form Southwest ISO

Nine Southwestern electric utilities are investigating the feasibility of establishing a regional independent system operator.

The Desert Southeastern Transmission and Reliability Operator (Desert STAR) would be the name of the new ISO. Initial members would include: Arizona Electric Power Co-op; Arizona Public Service Co., El Paso Electric Co., Nevada Power Co., Public Service Co. of New Mexico, Salt River Project, Texas-New Mexico Power Co., Tucson Electric Power Co., and the Western Area Power Administration's Desert Southwest Region.

Report Examines Fuel Trends

According to a new study by Resource Data International, the annual Outlook for Coal and Competing Fuels, U.S. electric load growth is accelerating, with actual utility generation growth expanding at rates comparable to the nation's real economic growth rate for the past two years.

Several electric measures suggest that in the mid-1990s, the nation is becoming more electric intensive. The 1996-1997 report suggests the nation's coal producers should see firm prices and strong demand growth in most producing regions in 1997.

In Brief...

Sound bites from state and federal regulators.

Pole Attachment Rates. Michigan PSC adopts new costing method to set utility pole attachment rates, aimed at developing competition in telecommunications services and discouraging investment in duplicate facilities by new market entrants. It cautions that changes in markets or regulatory environment might prompt a reconsideration. Case Nos. U-10741 et al., Feb. 11, 1997 (Mich.P.S.C.).

Internet Tariff Posting. New York PSC authorizes New York State Electric and Gas Corp.

Electric Lite Causes Concern at PSC

Competitive electric provider Electric Lite has drawn the attention of the South Carolina Public Service Commission with its promises of guaranteed rate reductions of 20 percent.

Electric Lite intends to compete against South Carolina investor-owned utilities for customers when the Legislature opens the market to competition.

The proposed "Competitive Power Act," if approved by the Legislature, would open the state's electric markets to competition in January 1998.

States Review Winter Gas Hikes

Two states have decided to review the high cost of gas this past winter and the effect the price hike has had on the states' gas utilities.

Florida. While granting requested rate relief on an "expedited basis" to Florida Public Utilities Co., the Florida Public Service Commission said it would conduct a prudence review of the purchased gas costs during its next scheduled PGA audit proceeding.