The Ohio Public Utilities Commission has adopted guidelines for mandatory pilot programs by electric utilities to aggregate customer loads.

The Massachusetts Department of Public Utilities has authorized the Boston Gas Co. to implement a performance-based rate plan that will include a price cap for monopoly services, using the "GDP-PI" measure of inflation, minus a productivity offset of 2 percent.

It also told Boston Gas to cut rates by $2.897 million but allowed the company to go forward on an interim basis with an plan to unbundle services and require customers or marketers to take manadatory assignment of a pro rata share of the company's upstream pipeline and storage capacity contracts.

Sound bites from state and federal regulators.

Residential Weatherization. Idaho allows Utah Power & Light Co. to discontinue its demand-side management program for residential weatherization, calling it "apparently no longer of much value." to customers. Case No. UPL-E-96-6, Order No. 26747, Dec. 31, 1996 (Idaho P.U.C.).

Real-time Pricing. Montana Power Co.

To predict the Clinton Administration's next step is foolhardy. And when it comes to the first federal restructuring bill, it's riskier still to rely on drafts that apparently were leaked to gauge reactions of the energy industry and media.

"There have been a gazillion versions of the bill which have been prepared," says a Department of Energy official.

FERC's New Merger Policy Applied. In the first application of its new merger policy, the Federal Energy Regulatory Commission on Jan. 15 told six Midwestern utilities that they would have to negotiate an agreement to protect ratepayers in order to form a new holding company, Interstate Energy Corp.

FERC also set for hearing limited competitive issues (Docket Nos. EC96-13-000 et al.).

My business, the natural gas industry, stands at a crossroads. Unbundling and deregulation permeate the market. The next three years will see the end of many fixed, long-term supply and transportation service contracts (em the closing of an era.

In fact, natural gas marks perhaps the last commodity traded on a major exchange that remains captive to such long-term contracts. The demise of such contracts will add flexibility to gas pricing and supply management.

This evolution will accelerate with a host of changes in the way gas moves in wholesale markets.

Competitive Power Markets

Put Capacity at Risk

Generation markets in the U.S. are about to go through a period of radical transformation as full competition is introduced to the industry. One of the largest impacts of this transformation will be the creation of a more efficient generation industry. According to a new study by Resource Data International, the drive towards increased efficiency will result in the premature shutdown of some high-cost, inefficient power plants.

Our analysis starts by analyzing the costs of every utility owned power plant in the country.

The opening of the Georgia General Assembly on Jan. 13 prompted the Georgia Public Service Commission to push for competition in the state's natural gas industry. Following a December report by the Georgia House and Senate Gas Study Committees, legislation is expected this session to open up the gas market.

That report, in effect, rejected a proposal by Atlanta Gas Light Co. to enact competition. Now AGL has a new proposal, which would transform it into a "pipes" company that no longer would sell gas to end users.

Northern Illinois Gas "reluctantly" has

withdrawn its performance-based rate proposal from the Illinois commission. Under the proposal, NIG would have compared its total annual gas supply costs against a market-based benchmark, and the difference would have been shared between NIG and its customers. Presently, natural gas supply costs are recovered directly from customers without mark-up.

NIG had filed its proposal in response to an amendment to the Illinois Public Utilities Act authorizing the commission to approve performance-based rates on an experimental basis.

The Ohio Public Utilities Commission has approved Columbia Gas of Ohio's "Customer Choice" program, which allows customers to purchase natural gas from other suppliers starting in April (Case No. 96-1113-GA-ATA).

About 170,000 customers in the Toledo area will be eligible to participate, making it one of the largest pilot programs in the nation. The utility anticipates that the program eventually will be available to all of its customers.