Fortnightly Magazine - October 15 1997

SoCalEd Begins Plant Auction

Southern California Edison has begun auctioning its 12 gas- and oil-fired generation plants. The plants boast an operating capacity of about 10,000 MW and a combined value of about $700 million.

The auction is being conducted in two phases. The first phase began Aug. 5, when SoCalEd sent out a confidential offering memo for its five "non-must-run" plants. The second phase took place in late August, when SoCalEd auctioned "must-run" plants.

Court Dismisses Telephone "Rounding Up" Complaint

A New York appeals court has dismissed a claim for damages brought by a telephone consumer complaining that he had been defrauded by a local telephone carrier's policy of rounding up charges to the nearest whole-minute increment.

The consumer claimed that the carrier, NYNEX Corp., had "secretly and fraudulently" followed a policy of charging for phone calls in whole-minute increments only. The consumer charged the company with violation of the state's public utilities laws, common law fraud, negligent misrepresentation and false advertising.

Retail Gas Choice Ok'd in N.M.

The New Mexico Public Utility Commission has approved a natural gas restructuring plan for Public Service Co. of New Mexico.

The plan allows residential gas customers and small businesses using less than 10,000 therms per year to select gas providers; some as early as December (Case No. 2760).

According to David Warren, PUC executive director, the commission opened natural gas to competition 10 years ago, but because of various barriers, customers didn't take advantage of it. PSNM, for example, continued to charge exiting customers a $35-per-month rental fee.

Gas Transport Service Releases Storage to Marketers

To help gas customers take advantage of unbundled services, the New York Public Service Commission has authorized National Fuel Gas Distribution Corp. to modify its existing firm transportation service procedures to allow marketers to gain access to a share of utility storage capacity, for use in delivering the required volume of gas to the city gate.

In another ruling, the commission approved a similar, but less innovative storage proposal for firm transportation customers served by Central Hudson Gas & Electric Corp.

Moody's Southeast IOUs Can Compete

Investor-owned utilities serving the Southeast U.S. are well-positioned to face increasing competition, but the region's municipal joint power agencies and electric co-ops may face serious losses.

That's the finding of a Moody's Investors Service regional study, the fourth in a series.

The "Southeast Electric Break-Even Analysis" estimates $24 billion in stranded costs for the region, with cooperatives and JPAs holding a disproportionately high portion of the per-kilowatt costs.

Off Peak

Each is unique, whether big or small, niche or mass-market.

Downsizing. Deregulation. Open access. That ought to boost both supply and demand for utility consultants, as unemployed middle managers seek out new careers and utilities struggle to survive in a more competitive and faster-moving environment.

However, since consultants come in many colors, which is right for you and your company?

Diversified Monoliths

As the giants of the consulting world, this category includes firms such as McKinsey, Andersen Consulting, The Big Six consultancies, and Booze-Allen.

New York Solar Homes Get Tax Break

New Yorkers could get tax breaks of up to $3,750 for installing solar systems, beginning next year.

New York Gov. George F. Pataki signed into law on Aug. 19 the "Solar Choice Act," aimed at encouraging solar energy system investments through income tax credits. The Act also would allow residential customers to receive the full retail value of the electric generated by their systems.

PEPCO Wants Hike, Blames Merger Delay

Potomac Electric Power Co. says merger delays are costing it money and it's asking the Maryland Public Service Commission to approve a rate increase.

PEPCO says savings achieved from its proposed merger with Baltimore Gas and Electric Co. would have absorbed the increased costs. The merger would form Constellation Energy.

The rate increase would be only for the utility's Maryland customers.

Electric Competition: A Gas Booster

Restructuring of the electric industry "is not an impediment" for the natural gas industry, according to Paul Holtberg of the Gas Research Institute. Just make sure to distinguish between restructuring's evolution, or transition period, and the post-transition period, he adds.

The just-released 1998 edition of GRI's "Baseline Projection of U.S.

Gas Restructuring: Can Distributors Repeat the Success of Pipelines?

A talk with two LDCs. First, PSE&G appears content to cede sales to marketers, Second, NW Natural intends not to give in just yet.

This much is clear: Energy utilities are headed for an unbundled future.

As states from both sides of the country implement residential and commercial natural gas unbundling, require residential choice pilot programs and grapple with electric industry restructuring, competition shows no signs of slowing. To boot, some members of Congress seem eager to give competition a national push.