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Fortnightly Magazine - July 1 1997

Frontlines

Bruce W. Radford

Speaking on June 11 in Washington, D.C., at a symposium sponsored by the Institute of Electrical and Electronics Engineers, Rep. dan Schaefer (R-Colo.) was heard to say that he would have his electric restructuring bill out of committee by the end of July. He said his bill would mandate electric competition by 2000--just the sort of deadline that Texas Public Utility Commission Chair Robert Gee likes to call a "Hong Kong" clause.

Will the millennium bring the dawn of customer choice? Here we are, halfway through 1997. Hong Kong is now Chinese, but in America we are still ratepayers.

Special Report

Joseph F. Schuler, Jr.

Senate panel lobs shots at FERC's slow merger approvals.

Wall Street analysts and shareholder reps are urging Congress to help electric utilities recover stranded costs during nationwide deregulation to prevent a "cratering" of energy stocks.

One analyst recently testified that investors never expected 100-percent recovery. Another suggested that federal legislators should let states hammer out their own solutions.

But determining fair compensation state by state won't be easy, as witnesses and lawmakers conceded at recent hearings on Capitol Hill.

People

Central Vermont Public Service Corp. hired former Electrolux Corp. CFO Douglas D. Sinclair as its marketing and business development v.p. and general manager. In addition to his new position, Sinclair will oversee day-to-day activities at two power generation and technology subsidiaries. Also at CV, Robert G. Clarke, president of Vermont Technical College, and Patrick J. Martin, president of America's Customer Operations at Xerox Corp., were elected to the board of directors.

John F. Cotter, former PECO Energy Co. power trader, was hired by Pennsylvania Power & Light Co.

Primergy Merger Collapses Due to Delays

Lori A. Burkhart

The proposed merger of Northern States Power Co. and Wisconsin Energy Corp. to form Primergy has been called off because of delays by regulatory authorities at both the federal and state levels.

"After thorough consideration, we have mutually agreed to terminate our plans," said Richard A. Abdoo, Wisconsin Energy chair, president and CEO.

EEI Cities Problems With Retail Competition

Lori A. Burkhart

Two studies examine marketers and direct-access pilots. Customers seen as "confused," dissatisfied," "frustrated."

The Edison Electric Institute has released two studies that examine increased competition in electric markets. One looks at the rapid growth of the power marketing industry, while the other examines the problems encountered by the first six retail access pilot programs in the U.S.

Power Marketers.

New York Asks FERC for ISO, PX, Council

Lori A. Burkhart

New York state's electric utilities in a joint filing at the Federal Energy Regulatory Commission have called for creation of an independent system operator, a power exchange and a reliability council, termed the "New York State Reliability Council."

The proposal stems from a collaborative process and is intended to complete the transition to full compliance with FERC Order 888. It includes numerous provisions:

• New York ISO. Would control state's bulk power transmission facilities;

• Transmission Pricing.

California Oks Direct Access all at Once

Lori A. Burkhart

The California Public Utilities Commission has ruled that it will not phase in direct access at different times for different customer groups, but will allow all customers, regardless of classification or amount of electricity used, to choose their energy supplier in less than two years.

"There will be no phase-in or pilot-program period for the opening of California's electricity market. In just eight months we go from a regulated monopoly to open competition in one big bang," said John Seidl, president and CEO of CellNet Data Systems Inc.

The PUC said that starting Jan.

FERC Proposes Non-Bypassable GRI Funding Method

Lori A. Burkhart

In a notice of proposed rulemaking, the Federal Energy Regulatory Commission has posed a new method of funding the Gas Research Institute, while extending the present funding method for one year (see, FERC Docket Nos. RM97-3-000 and RP97-149-000).

The current funding mechanism allows GRI-member pipelines to discount a FERC-approved GRI surcharge, then remit to GRI only those funds recovered. The FERC noted that this mechanism threatens GRI's research, development and demonstration efforts.

Bush Bill To Open Power Markets in Texas Dies

Lori A. Burkhart

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

Lori A. Burkhart

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.

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