Southwestern Public Service Co. (SPS) and Public Service Co. of Colorado (PSCC) have entered into a definitive merger agreement to form a public utility holding company that will cover one of the largest geographic areas in the nation. Size apart, the merger is unique in that SPS operates as part of ERCOT, and the two utilities are not interconnected. A new transmission line will be built to connect the two companies.

The new holding company will have combined annual revenues of $3 billion, and assets of $6 billion.

The staff of the Arizona Corporation Commission have recommended rejection of a Tucson Electric Power Co. (TEP) proposal to form a holding company, with TEP becoming a wholly-owned subsidiary. The proposal reflects TEP's desire to pursue opportunities in the domestic and international power markets, including development of independent power projects, acquisition of interests in existing power facilities privatized by foreign governments, and construction of cogeneration facilities to serve the energy needs of large industrial customers.

A broad coalition of Minnesota electric cooperatives, municipal utilities, consumer advocates, and environmentalists has joined the debate over the restructuring of the state's electric industry.

General Public Utilities Corp. (GPU) and New Jersey Resources Corp. (NJR) have announced a pooling plan to manage the natural gas supply and capacity portfolios for up to 25 gas-fired generating stations that supply the GPU system in New Jersey and Pennsylvania. The pool will contain up to 1,100 megawatts of nonutility generation presently under contract with the GPU companies, as well as the companies' own generation. NJR will procure gas and provide other fuel-management services in conjunction with GPU system power dispatchers.

Nice Try!American Gas Association president and CEO Michael Baly's response to my article ("Electric Reliability: How PJM Tripped on Gas-fired Plants," May 1, 1995) concerning the January 19, 1994, rolling blackouts in the PJM power pool is damage control that fails. Here are the facts that Mr. Baly either ignores or distorts:

Forty percent of PJM's coal generation did not operate during the rolling blackouts. At least 80 percent of PJM's total generation where gas was the primary or sole fuel did not operate when needed.

Joseph Santaniello has been named director of management information systems for NUI Corp. He was previously director of engineering at Elizabethtown Gas, NUI's New Jersey operating division. Stephen Liaskos, formerly controller at Metallgesellschaft Corp., joins NUI as controller. Michael A. Palecki, most recently of the Florida Public Service Commission, has been named v.p. of regulatory affairs for NUI's southern division.

BICC Utility Cable Co.

And wires in the air. Together they form the interstate natural gas pipelines and the electric transmission grid. When the talk turns to deregulation, whether on the gas or the electric side, the pipelines and the transmission grid are almost always voted "most likely to." That is, to remain regulated monopolies (em with cost-of-service rates protected by the Federal Energy Regulatory Commission (FERC).

Let's have a look at that idea.

The FERC has unbundled gas commodity sales from pipeline transportation.

On a cold day, natural gas from storage reservoirs may supply as much to markets as gas from producing wells. The ability to store gas underground not only ensures reliable delivery during periods of heavy demand, but also allows more level production and pipeline flows throughout the year. Thus, some believe that the cost of storage should be spread over all gas delivered during a year, not just gas delivered from storage sites to end-use customers during the winter.

The competitive transformations of the natural gas and telecommunications industries are over a decade in the making. By contrast, competition in the electricity industry is still emerging. Special interests have defeated many proposed competitive reforms. For example, in 1988 the FERC failed in its attempt to adopt regulations to encourage competitive bidding and independent power producers (IPPs).1 Similarly, decades of forceful industry opposition delayed open access in bulk-power markets.

The restructuring of electric utilities is fundamentally a matter of national policy (em not a regulatory issue. Regulators are ill-suited to make national policy because they are conditioned to act within the limits of authority specifically granted by legislation, rather than to seek a fresh statutory mandate in response to changed conditions. Policymakers must assess political, social, economic, technological, regional, and national factors to measure the need for reform.