No clear consensus has emerged. Should regulators hold to a hard line?

Regulators have wrestled for decades with transactions between vertically integrated monopoly utilities and their corporate affiliates.

Most problems have usually involved a shifting of costs, risk, or profit, as when an electric utility buys coal from a subsidiary. On the telephone side, AT&T's equipment dealings with Western Electric and Bell Labs were always a worry for regulators.

Policymakers reflect on how it "coulda been." Nearly all insist "my state did it best."

California, Massachusetts, New Hampshire and Pennsylvania have deregulated their electricity markets. Yet they're all ironing out wrinkles. California at press time was bracing for a vote on the Proposition 9 recall petition. New Hampshire still faced federal lawsuits filed by Public Service of New Hampshire seeking to quash efforts to bring competition to the state. (See, U.S. District Court, Concord, Docket No. 97-97-JD; U.S. District Court, Providence, Docket No.

THE AVERAGE UTILITY EXECUTIVE IS A "'NAVEL-gazing'" introvert, according to Frank Ruotolo. But that executive isn't alone.

Ruotolo is president of The Futures Group, a Connecticut company that has examined how much time U.S. executives spend looking at external factors - new markets, competition, regulatory constraints - versus internal factors such as budgets, organization, and human and capital resources.

We are the world's experts on contingencies," boasted Michehl Ghent, president of the North American Electric Reliability Council, appearing in Houston on Sept. 17 at the Sixth Annual DOE/NARUC Electricity Forum. It was the very day day that NERC released its first comprehensive report on readiness in the electric utility industry in correcting computer software problems associated with the dawning the next century, which for the first time will require computers, software programs and embedded chips to the use four digits to identify the year beginning with turnover from 1999 to 2000.

THE SEPT. 1, 1998 ISSUE OF Public Utilities Fortnightly contained an article, "The Fortnightly 100," which promised to reveal America's "most efficient utilities." The authors used data envelopment analysis (DEA) to analyze historical operating and financial data for 140 utility holding companies. While DEA can be a useful tool for data analysis, used indiscriminately it can lead to misleading conclusions.

Federal Agencies

NOX EMISSIONS. Generating heavy criticism from industry, on September 24 the Environmental Protection Agency released its long-awaited final rules on nitrogen oxide emissions, outlining a plan to reduce NOx by 28 percent by year 2007 in some 22 states and the District of Columbia, with state implementation plans due by September 1999 and controls in place by 2003, to be carried out through a "cap and trade" program to buy and sell NOx emissions credits.

NATIONAL ASSOCIATION OF Regulatory Utility Commissioners (NARUC) President Jolynn Barry Butler appointed Maureen O. Helmer, chairman of the New York Public Service Commission, to serve on the NARUC Committee on Electricity. As a member of the committee, Helmer will work with other state commissioners to develop policy positions.

Steven M. Nagy joined Detroit Edison as manager, supply chain and procurement. Nagy comes to Detroit Edison from Huntsville Electronics, the electronics division of Chrysler Corp., where he served as the division's manufacturing operations manager.

ON TUESDAY, NOVEMBER 3, THREE WEEKS AFTER I wrote this column, California voters narrowly defeated Proposition 9. In case you missed it, that was the ballot initiative that would have cut off funding for nuclear power in California through securitization or any other fancy financing for stranded costs. A "yes" vote would have told utilities, in effect, to "take these bonds and shove it."

But the voters said "no," however, and I'll tell you why - even before the first ballot was cast.

In the end, Prop 9 failed for the same reason that George McGovern lost to Richard Nixon in 1972.

Evidence suggests a decision point at 6 cents per kWh, indicating that self-generation becomes a highly viable option at that price

WHAT ROLE SHOULD REAL-TIME PRICING play in a deregulated electricity market? Can it serve as an incentive to induce customers to remain loyal to their power supplier? How do customers respond to price changes carried out under RTP tariffs?

Real-time pricing programs are now being used as a proxy for market-based pricing.

CUSTOMER SERVICE LINKED THE FIVE FINALISTS OF THE 1998 ULTRA competition, with all addressing, and improving, some aspect of serving end users.

The contest winner, Florida Power & Light Co., combined old hardware with new software and other innovations - such as using the Internet - to address a problem that plagues many utilities: how to cut the number of just-paid delinquent customers who call for power reconnects.