Fortnightly Magazine - August 1998
FOR THE FIRST TIME IN DECADES, A GROWING NUMBER of consumers are able to choose who supplies their electric power and, perhaps more importantly, where that power comes from. Evidence is mounting that this ability to exercise choice may give a long-needed shot in the arm to the deployment of renewable energy technologies.
National polls consistently reveal that between 40 and 70 percent of those sampled say they would pay a premium for environmental protection or for renewable energy, and utility company surveys reinforce those findings.
ACCORDING TO ONE RECENT SURVEY, MORE THAN HALF THE U.S. population now lives in states with customer choice. Moreover, industry executives expect 20 to 50 percent of these customers to choose a new electricity supplier by year end. %n1%n
With changes expected in the way electricity is generated, delivered and sold, exerting pressure on prices, what does the future hold for energy storage technologies?
After all, restructuring efforts appear most active in the highest-cost states -- those with average electricity prices running above 7 cents per kilowatt-hour.
THE PRICING TURMOIL THAT STRUCK MIDWEST POWER markets during the week of June 22, with allegations of price gouging and calls for a wholesale price cap imposed by the Federal Energy Regulatory Commission (see Docket EL98-53), made for good copy but has obscured what's really going on.
"In the pleadings to FERC, I saw no evidence of price gouging," says attorney Jeffrey Watkiss, who represents power marketers who have asked the Commission for wholesale market reform.
ALLYSON K. DUNCAN joined the Kilpatrick Stockton firm as counsel after having served as a commissioner on the North Carolina Utilities Commission since 1991. Prior to her appointment to the commission, Duncan served as a judge on the North Carolina Court of Appeals.
Two commissioners at the Wisconsin Public Service Commission resigned. Cheryl L. Parrino, chairwoman, resigned after 22 years with the PSC. She recently was appointed CEO of Universal Service Administrative Co. Daniel J. Eastman resigned to rejoin the private sector.
STRANDED COST RECOVERY. The Pennsylvania Public Utility Commission allowed Pennsylvania Power & Light Co. to recover $2.9 billion of a requested $4.5 billion in stranded costs, cutting a higher $4-billion allowance proposed earlier by an administrative law judge. The utility petitioned for reconsideration on June 26, after CEO William F. Hecht had called the decision "unacceptable," and noting that the PUC's written order, received June 15, appeared "even more injurious" to the company that the PUC's June 4 bench order.
NEW YORK ATTORNEY GENERAL DENNIS C. VACCO IS investigating a $42-million severance package given to former LILCO Chairman William Catacosinos, complicating the takeover of troubled Long Island Lighting Co. by state-run Long Island Power Authority.
orney General Vacco on June 8 announced he had issued formal subpoenas concerning "secret" payments made to utility executives. "The revelation of these payments ratifies Governor Pataki's actions in dismantling LILCO's power monopoly on Long Island," Vacco said.
WHEN IT COMES TO PLEASING CONSUMERS, THE electric industry can learn something from telephone companies. A recent study by Aragon Consulting Group suggests that more consumers nationwide are satisfied with their local phone service than with their electric service.
This conclusion stems from a sampling of 3,375 consumers from all regions of the country. Nationwide 65.2 percent of local telephone customers said they were satisfied with their service, compared with only 54.7 percent of electric utilities customers (see Chart 1).
DEREGULATION PRESENTS WHAT IS PERHAPS THE BEST opportunity yet for renewables to stake a lasting claim in the electricity market.
Since most energy from renewable sources still isn't priced competitively with fossil-fueled technologies, many restructuring proposals at state and federal levels include various support mechanisms intended to drive down the renewable generation costs. The initial added expense is a necessary trade-off, advocates say, for the resulting reductions in emissions and energy price volatility.