Fortnightly Magazine - September 15 1999
News Digest was compiled by Carl J. Levesque, editorial assistant, Lori A. Burkhart, contributing legal editor, and Bruce W. Radford, editor. For continual news updates, see www.pur.com.Nuclear Power
Transmission & ISOs
Transco Independence. Granting Entergy's request for a declaratory order, the Federal Energy Regulatory Commission ruled in a case of first impression that a stand-alone transmission company ("transco") would meet the test in Order 888 for independent system operators despite passive ownership by a power producer or other market participant.
They see utilities responding, but fear outlying areas are overlooked.
Despite reports of year 2000-readiness from virtually all electric utilities, and a promise from the U.S. Department of Energy to pressure the laggards, some customers still fear being left in the dark on Jan. 1, 2000. That view may surprise some, but it emerged clearly from the conference held in Chicago August 5-6 by the North American Electric Reliability Council, to update utilities and their customers on electric industry progress in Y2K problem mitigation.
Don't overlook impacts on power supply reliability, urges a consultant.
Messrs. Cicchetti and Long deserve a round of applause for their insightful article, "Transmission Products and Pricing: Hidden Agendas in the ISO/Transco Debate," in the June 15, 1999, issue of Public Utilities Fortnightly.
Online services are popping up - for commodity trading, retail marketing and back-office billing. But is the Web right for every application?
A recent study by Connecticut-based META Group Inc. finds that while less than 5 percent of all utility commerce will be conducted electronically in 1999, 30 percent of customer service and retail bill payments will flow over the Internet by 2004. That prediction highlights a torrent of Web activity in recent months, from power trading online to retail solicitations to electronic customer billing and payment.
Investors look at environmental ratings for link to stock performance.
While socially responsible investors have been interested in environmental performance for some time, mainstream utilities investors are looking at the issue for a different reason - environmental leaders consistently achieve better financial and stock market performance than their less eco-efficient competitors.
The crazy quilt emerging in restructured markets only impedes competition.
The enthusiasm among energy retailers has become infectious. It grows as each successive state opens its market to competition. Yet behind the promise lies a grim reality.
Retailers struggle against a tide of thin margins, high customer-acquisition costs, inconsistent rules and regulatory prescriptions for the unregulated market. With all the rulemakings and workshops, the dollars budgeted by utilities to implement retail choice rise above even the level of spending to eradicate the Y2K millennium bug.
Let customers choose their own billing format.
The information-management and transaction-cost problems facing deregulated markets are familiar to me. They describe precisely the same barriers I was trying to overcome when I founded Utility.com Inc., an entirely Internet-based energy service provider.
The Internet offers an especially powerful tool for customer service. With deregulation, customers face an enormous learning curve. Not only can they now choose their electric company, but they also must become familiar with new terminology and concepts.
Shopping credits, capacity rules and other mistakes from California and PJM.
With retail electric markets opening rapidly, why are so many getting off to a slow start? Why do suppliers abandon some markets and consumers decline to participate in others? The answer may lie in a series of disconnections between wholesale trading patterns and retail opportunities.