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Fortnightly Magazine - July 1 1997

FERC Proposes Non-Bypassable GRI Funding Method

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.

Byline: 
Lori A. Burkhart
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New York Asks FERC for ISO, PX, Council

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.

Byline: 
Lori A. Burkhart
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Primergy Merger Collapses Due to Delays

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.

Byline: 
Lori A. Burkhart
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Special Report

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.

Byline: 
Joseph F. Schuler, Jr.
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Marketing and Competing

Identifying a core competency is not as easy as it seems.

Utilities have developed a "Gold Rush" mentality. That is, they have begun to chase after the latest (em and sometimes fleeting (em opportunities, often abandoning their roots and their long-held strengths in the process. Supposedly, this first-in-market race will allow traditional utilities to remain competitive. Yet, all this racing has caused strong regional players to enter markets blindly, without the competitive knowledge or strategic underpinnings that will allow them to succeed in the long term.

Byline: 
Leonard M. Fuld, and Diane Borska
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Low-Cost Federal Hydropower Shared With IOUs

An agreement between PacifiCorp and Bonneville Power Administration will lead to an 8-percent rate cut for PacifiCorp.'s Utah Power irrigation customers in Southeastern Idaho. Impetus for the agreement came from two Idaho legislators, the governor's office and the congressional delegation.

The proposed agreement was filed at the Idaho Public Utilities Commission and also will go through BPA's internal review process. The agreement will result in payments totaling $47.7 million over the next four years from BPA to PacifiCorp for Utah Power's Idaho residential irrigation customers.

Byline: 

Lori A. Burkhart

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Public Power in a Competitive Electricity Market

Subsidies? Maybe. But how about reciprocity? Should Congress let PMAs, munis and co-ops decline open access?

Until recently, most congressional debate on utility deregulation has focused on the future of investor-owned utilities and independent power producers and marketers. Lobbyists for government-owned or cooperative-owned power companies have tried to downplay their clients or to seek exemptions.

Byline: 
Richard Munson
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California IOUs Seek Securitization

California's three largest investor-owned utilities have asked the California Public Utilities Commission to approve securitization of up to $7.3 billion of stranded costs.

The utilities would issue 10-year bonds through the state infrastructure bank starting by the end of 1997. The "rate reduction bonds" would be repaid through a stranded cost charge levied on present ratepayers. The amounts applied for are: $3.5 billion by Pacific Gas & Electric; $800 million by San Diego Gas & Electric Co.; and $3 billion by Southern California Edison Co.

Byline: 
Lori A. Burkhart
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Southern Co. Buys German Utility

Moody's on May 14 said it would maintain a negative outlook on The Southern Company's Prime-1 short-term rating for commercial paper following The Southern Company's announcement that it will acquire a 25-percent ownership interest in Berliner Kraft und Licht AG (Bewag), an electric distribution company in Berlin.

Southern will purchase a 25-percent share for $830 million, pending approval by Berlin's parliament and European regulators. A recently established consortium, consisting of Southern Co.

Byline: 
Lori A. Burkhart
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Unlikely Alliance to Bid on Plants

The Conservation Law Foundation of Boston and AES Corp. have teamed up to bid on the 18 New England Electric System power plants recently put up for sale under the NEES divestiture plan that is part of its restructuring settlement.

The unusual alliance puts the conservation group with a former industry adversary. If the alliance succeeds in its bid, it likely would close up to five of the most polluting plants to reduce acid rain and smog. Also, it would protect about 30,000 acres of land from development.

Byline: 
Lori A. Burkhart
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