Fortnightly Magazine - July 1 1997

Bush Bill To Open Power Markets in Texas Dies

Texas Gov. George Bush's (R) unexpected electric restructuring legislation that would have opened markets to competition in the state on Sept. 1, 2001 has died. The proposal would have slashed residential rates by 10 percent in the next three years, frozen industrial rates until 2001, and cut small-business rates by 4 percent.

The Bush plan, released on May 5, would have guaranteed that utilities would recover all stranded investment in generation plants at market rates of return.

Parties Push DOE for Answers

In response to an April 30 federal court order, parties suing the Department of Energy over nuclear waste storage have asked the court to require DOE to submit a detailed description within 30 days of its plan to begin removing radioactive waste from nuclear power plants.

Parties to the suit (em numbering 103 (em on May 7 also asked the court for permission to escrow more than $600 million in annual payments into the fund.

Two N.Y. Utilities Submit Proposals

Orange & Rockland Utilities Inc. and Central Hudson Gas and Electric Corp. have submitted their restructuring plans to the New York Public Service Commission as part of the commission's efforts to develop a new framework for the electric industry in the state's "Competitive Opportunities" proceeding.

Orange & Rockland's four-year proposal would reduce overall rates by $37 million (Case 97034/ 96E0900). Industrial customers would pay an average electric price of 6 cents per kilowatt-hour.

ALEC Calls for Date-Certain

The American Legislative Exchange Council has adopted a resolution setting December 2000 as the federal date-certain for expediting the transition to competition in the electric power industry.

The date set in the model resolution, which state legislators can adopt, is the same deadline named in the federal bill drafted by Rep. Dan Schaefer (R-Colo.). ALEC, the largest bipartisan membership association of state legislators with 3,000 members, believes that a common timeline between federal and state governments is necessary for a seamless transition to competition.

Oklahoma Plans to Introduce Competition by 2002

Oklahoma Gov. Frank Keating has signed into law the "Electric Restructuring Act of 1997," S.B. 500, which allows customers choice of electric suppliers by July 1, 2002.

The legislation was written by state Sen. Kevin Easley (D), who originally had called for competition by 2000. The new law calls for the Oklahoma

Corporation Commission to resolve issues surrounding stranded costs.

According to Keating, "[Deregulation] should help strengthen our economic development position when we're in competition with other states for jobs."

In Brief...

Sound bites from state and federal regulators.

Gas Curtailment. New York PSC approves updated curtailment and interruption tariffs for many of the state's natural gas local distribution companies. It had asked the LDCs to develop new rules to reflect growing competition and ensure gas deliveries for core customers during a supply crunch. Case 93-G-0932, March 24, 1997 (N.Y.P.S.C.).

T & D Classification. New York PSC opens proceeding to distinguish between electric transmission and distribution facilities.

Sacremento to Allow Customer Choice

The board of directors of the Sacramento Municipal Utility District has approved the introduction of competition in its service territory. SMUD is opening up competition for 100 megawatts of power (em about 5 percent of its total load (em in its new "Direct Access Phase-In Program."

Starting in June, customers may contract with a new energy supplier. Customers could receive power from the new provider in July.

States Set Rates for LEC Interconnection Services

Signaling victory over one of the more complex issues in the move to competition in the local telephone market, regulators in Connecticut and New York have adopted rate plans for unbundled interconnection services offered by incumbent local exchange carriers.

Both states also recently approved the wholesale discount rate that the LECs must apply to existing services when offering them for resale by competitive companies. See Re AT&T Communications of New York, Inc., 173 PUR4th 274 (N.Y.P.S.C. 1996); Re So. New England Tel. Co., Docket No. 95-06-17, March 25, 1997 (Conn.D.P.U.C.).

Study Predicts Changes in Northeast

The Reed Consulting Group has released a study, which predicts that in 10 years, no more than six major companies will dominate the Northeast power market in each of the generation, wires and energy services industries.

The study also said the transition to competition primarily would affect generation and energy marketing.

On the Brink of Competition: RCG's Guide to the Northeast Power Market finds that New England and New York are setting the pace for the nation on power and fuel markets convergence.

Idaho Approves Direct Access, Electric Pricing Plot

The Idaho Pubic Utilities Commission has approved two new electric market experiments to test a market-based pricing tariff proposed by one electric utility and a direct-access pilot program proposed by another.

Market-based pricing. It authorized Idaho Power Co. to offer industrial customers, on an experimental basis, the option of purchasing power under a market-based rate schedule. Customers who contract for 5 to 10 megawatts of firm demand at one delivery point qualify for the pilot tariff program.