In a pair of orders issued the same day, the California Public Utilities Commission has denied requests to modify its plan for electric industry restructuring, as set out in its Final Policy Decision of Dec. 20, 1995 (see 166 PUR4th 1), but has initiated new "public service programs" to continue support for energy efficiency and low-income assistance efforts.
PUC endorses direct access, plant divestiture and limits on recovery of stranded costs. Says order will not interfere with 1990 bankruptcy plan for Northeast Utilities. The New Hampshire Public Utilities Commission has issued its final plan for restructuring the state's electric industry, at the same time announcing what is believed to be the first formal policy decision by a state utility commission that would deny full recovery of costs left "stranded" by the transition to competition.
Released on Feb.
Sound bites from state and federal regulators.
Gas Supply Affiliates. Arkansas oks plan by Arkla to continue to rely on NorAm Gas Transmission Co. (an affiliate) for the bulk of its supply requirements, but directs the utility to evaluate its supply options and to "be prepared" to shift to an independent supplier for gas inventory and capacity. NorAm agreed to "rachet-down" its price to meet third-party offers. Docket No. 95-401-U, Order No. 34, Jan. 9, 1997 (Ark.P.S.C.).
Electronic Billing. Michigan regulators approve program by Consumers Power Co.
The Natural Gas Supply Association said that electric restructuring bills proposed in Congress and by the Clinton Administration contain several provisions that could "significantly" and "unfairly" reduce the competitiveness of gas-fired electricity.
NGSA warned that utilities likely will dispatch electricity from different fuel sources in order of lowest-to-highest marginal cost, and the marginal costs of gas-fired power generally are higher than power fired by coal, nuclear and hydro.
The Federal Energy Regulatory Commission has issued its notice of a public conference on "Issues and Priorities for the Natural Gas Industry," which will be held May 29 and 30. The FERC wants to gather information to establish its regulatory goals and priorities in the post-Order 636 environment (Docket No PL97-1-000).
The FERC is requesting a broad analysis of present and future industry issues, including those deemed the highest priority for FERC action.
Calling a proposed Securities and Exchange Commission rule contrary to public policy and law, as well as a "de facto repeal of major provisions of the Public Utility Holding Company Act of 1935," the City Council of New Orleans has asked the Securities and Exchange Commission to withdraw its proposed Rule 58.
"For more than 60 years, PUHCA has shed light on the activities of utility holding companies," said Council President James M. Singleton.
Loyalty may depend more on age group than anything else.
Utilities may want to start asking their customers some personal questions.
Such as: "How old are you?"
Why? Because customer behavior may have more to do with age and other demographics than anything. For instance, younger customers compose the highest-switching segment. However, older customers tend to have more loyalty. But so too, these loyal customers are the hardest to woo from another supplier.
Do electric utilities understand how to earn profits for shareholders in a competitive market?
Here's one way to look at the problem. Gather a group of financial experts and ask this question: If a company's long-term bonds are rated AA, and yield 8 percent, what minimum return would you require from dividend yield and price appreciation to induce you to buy that company's stock?
The typical expert will say 12 percent, indicating a 4-percent premium (or spread) above AA bond yields.
Oglethorpe Power Corp. recently completed an extensive restructuring that transformed the generation and transmission power cooperative into three specialized companies better able to compete in a restructured electric market.
In addition, the company's board of directors has approved a deal that would allow Morgan Stanley Capital Group to supply Oglethorpe Power Co. one-half of its power needs for up to eight years. The deal has been presented to the 39 Electric Membership Corporations (EMCs) for final approval.
The Palm Springs City Council has approved a contract with Portland General Corp., the parent company of Portland General Electric, which specifies the roles and responsibilities of both parties as the city establishes a new utility, "City of Palm Springs Energy Services."
Last December, Palm Springs had selected Portland General to become the city's new energy services partner to help it develop a municipal utility to compete in a deregulated marketplace.