Fortnightly Magazine - January 15 1995

PSE&G Customers Can Shop Around for Gas

The New Jersey Board of Public Utilities (BPU) has approved a plan that will allow Public Service Electric and Gas Co. (PSE&G) to offer new transportation services to its commercial and industrial (C/I) natural gas customers. As a result of the BPU action, PSE&G will begin offering third-party gas transportation and other services to C/I customers regardless of size, amount of gas used, or alternate fuel capabilities. These customers may purchase gas directly from producers and marketers and arrange for PSE&G to transport and deliver the gas.


I am under siege. To be more precise, my company and American corporations in general are under siege. In popular media today, corporations are consistently treated as suspect at best (em and demonized at worst. If you switch off your critical faculties when you watch television or go to the movies, you're probably convinced that corporate America is out to destroy this country. In 1964, while campaigning for Barry Goldwater, Ronald Reagan framed the issue perfectly.

Indiana Authorizes Order 636 Transition Cost Recovery

The Indiana Utility Regulatory Commission (URC) has authorized Northern Indiana Public Service Co. to recover its Federal Energy Regulatory Commission Order 636 pipeline transition charges under a rate design proposal that divides the charges between sales and transportation customers. Under the approved recovery plan, the gas local distribution company (LDC) will pass to all ratepayers on a volumetric basis those transition charges related to gas supply realignment and stranded investment.

World's Largest Geothermal is Formed

After much contention, California Energy Co. Inc. and Magma Power Co., both geothermal energy producers, have signed a merger agreement that will give Magma

stockholders $39 a share, or about $950 million in aggregate value. The agreement has been approved by both boards of directors. California Energy's tender offer included shares representing a majority of the voting power of Magma as well as funding of financing. The merger is also conditioned on the approval of California Energy's shareholders.

Marketing & Competing

It was far from common just two years ago to identify an electric utility with a senior executive responsible for proactive marketing activities. Today, such people are relatively easy to find. Often they report directly to the CEO.

The waves of utility downsizings and corporate reorganizations have brought the realization that electricity will need to be sold, serviced, and strategically marketed to customers large and small.

Connecticut Ties Telecom Reform to Info Highway

The Connecticut Department of Public Utility Control (DPUC) has issued the first in a series of policy statements designed to guide reform of telecommunications regulation under a new state law calling for the promotion of an "information superhighway" in the state by adding more competition in the marketplace.

Citizens Utilities Expands in Telecom

Citizens Utilities Co. is continuing its aggressive expansion into the telecommunications business with an agreement to buy $292 million of telephone and cable television assets from Alltel Corp. However, the deal places the company's credit rating under increasing pressure.

Citizens will buy 109,000 telephone access lines in eight states, and acquire operations serving 7,000 cable television customers in four states. Alltel is a telecommunications and information services company based in Little Rock, AK.

Financial Opportunities

The utility industry is in financial transition, both in the United States and abroad. In such times, it is often difficult to pinpoint the catalyst that carries an organization through a period of change. Successful analysis of efficient market models in the past can offer an excellent indication of how "restructuring" will affect utility industries in the United States and the world. Current efforts have come about because of the growing, and projected, need for power.

New York Moves Toward Performance-based Regulation for LEC

A five-year, performance-based regulation plan for New York Telephone Co. (NYT) has been signed by the New York State Public Service Commission staff and 15 other parties. The plan calls for NYT to improve service quality, reduce prices, and foster competition in its service territory. NYT agreed to relinquish its right to file for general rate increases, but in exchange will receive increased regulatory flexibility.

The plan was negotiated over a two-year period and the PSC will review it over the next several months.

Minnesota DPS Blasts NSP Ethics

In a final decision issued December 6, Commissioner Kris Sanda of the Minnesota Department of Public Service (DPS) found that Northern States Power Co. (NSP) threatened the St. Paul Neighborhood Energy Consortium (Docket No. G,E002/CC-94-426). The consortium claimed NSP said it would withhold a contract to perform home energy audits if its Conservation Improvement Program (CIP) did not support dry-cask nuclear waste storage at NSP's Prairie Island nuclear plant.

While acknowledging the threat, Sanda found no evidence that the newly implemented bid process was tainted.