Fortnightly Magazine - May 15 1996

A Milestone Year: Power in the Commodity Markets

Paper trading is here, introducing an element of speculation in wholesale electric markets.The electric power industry joined the commodity markets on March 29, 1996, when power futures began to trade on the New York Mercantile Exchange (NYMEX). This first tentative step in the commoditization of electricity promises the emergence of a paper market for power, which, as in the case of other commodities, will likely prove substantially broader and more complex than electricity's physical market.

Byline: 
Edward Krapels and Vito Stagliano
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NEES Proposes Transmission Sub

The New England Electric System (NEES) has filed with the Federal Energy Regulatory Commission (FERC) and the Securities and Exchange Commission for authority to separate

generation and transmission, and to create a

transmission subsidiary called NEES Transmission Services, Inc. NEES Transmission has filed proposed transmission tariffs at the FERC that would give its wholesale customers, including New England Power Co.

Byline: 
Lori A. Burkhart
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Frontlines

I don't know about you, but the Internet is driving me carzy. Every week I discover a half-dozen new home pages to add to my reading list. Some may view NetscapeÔ as an investment play. I see it as drama.

As a magazine editor (em someone who gets paid to follow the news (em I feel guilty if I don't click on every link and download every file. I call it the "obligation to surf." And the problem grows worse as more government agencies post their decisions online.

Byline: 
Bruce W. Radford
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Ohio Court Overturns Price-cap Plan

The Ohio Supreme Court has overturned an alternative regulation price-cap plan approved by the state public utilities commission (PUC) for Ameritech Ohio, a local exchange telephone carrier (LEC) formerly known as the Ohio Bell Telephone Co. The court also expressed "grave concern" that the PUC had accepted a partial settlement agreement in the case without the participation of the LEC's competitors.

Byline: 
Phillip S. Cross
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People

Aquila Power Corp., a UtiliCorp United subsidiary, has hired two executives to expand its market into the western United States. Timothy J. Culbertson, from Portland General Electric, will lead power marketing in the Pacific Northwest. David L. Metz will lead power marketing in the Southwest. Metz comes from Arizona Public Service Co.Consolidated Natural Gas Co. has named Bruce E. Plichta international financial analyst and James M. Mulcahy senior financial analyst.

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Restructuring Case to Define "Cost-Based" Rate Standard

In opening its investigation of electric utility restructuring, the Utah Public Service Commission (PSC) has begun by directing PacifiCorp to submit a legal analysis of the "cost-based standard" for ratemaking, as enunciated two years ago in a state supreme court opinion.

In 1994, the court had overturned an incentive regulation plan OK'd by the PSC for a local exchange telephone carrier because it ignored statutory cost-of-service principles.

Byline: 
Phillip S. Cross
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Mailbag

Genco Risk: "Location, Location, Location"Vinod Dar's recent article, "Competition, Convergence . . . and Cashflow? The Power Business in the Next 20 Years" (Apr. 1, 1996, p. 31), highlighted some of the risks inherent in investments in new power generation plants in a restructured electric industry.

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Joules

Batavia, IL, (pop. 20,300) is studying a municipal broadband communications system that would provide high-speed data services for city businesses, homes, schools, and other customers. The system envisioned by city fathers would use a fiber-optic network extension of the municipal utility. The system would provide cable TV and telephone services, and provide a conduit for interactive data such as the Internet.
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