IS TEMPERATURE THE SINGLE MOST IMPORTANT FACTOR IN how gas storage is used? Or are other variables involved? Can we answer these questions - and verify the results?
Since FERC Order 636, natural gas storage has grown into a high-profile asset in the industry. As a result, the industry has responded by changing the way it uses this storage. The exact nature of this adjustment is not apparent at a glance; one must first analyze industry data.
AS U.S. ELECTRICITY MARKETS BECOME increasingly competitive, large industrial customers will discover many new choices. These choices include the opportunity to modify the amount and timing of electricity use in response to prices that vary from hour to hour. In addition, customers can sell certain electricity services, including operating reserves and load following, to the system operator. And industrial customers with cogeneration facilities can participate fully in bulk power markets, buying and selling energy and ancillary services in response to changes in spot prices.
WHOLESALE POWER PRICES DURING THE SUMMER OF 1997 REACHED LEVELS MUCH higher than in 1996 - higher than the variable fuel costs of even the costliest units (see Figures 1 and 2). This situation has confounded many observers. Many thought, in spite of forecasts to the contrary, that markets would continue to exhibit excess capacity for years to come. They thought need for new capacity was distant and that hourly markets would not see premiums in excess of fuel costs for marginal units - the so-called "pure" capacity premium - for years to come.
The evidence is in.
UNDER RETAIL COMPETITION, AT LEAST SOME electricity customers will make purchase decisions out of concern for the environment. A variety of utility green pricing programs already target environmentally concerned consumers. Recent experience in Massachusetts and New Hampshire confirms that utilities and power marketers are gearing up for full-fledged green power marketing to differentiate their products in a competitive environment.
BY WHAT AUTHORITY CAN STATES FAVOR RENEWABLE
energy in a restructured electricity market?
Renewable resource funding marks a major point of contention in utility deregulation. Environmental groups fear that without some form of compulsion or subsidy, or both, renewable resources will not survive in an energy economy based on least direct consumer cost. However, utilities do not want to be saddled alone with the chore of carrying all renewables to market.
NOx Joke
EPA Proposal Has IOUs Fuming
Electric utilities single-handedly to reduce smog.
MIDWEST AND OHIO VALLEY STATES ARE EXPECTED to get hit hardest by the Environmental Protection Agency's proposal to reduce smog.
Ohio, for example, is home to American Electric Power, one of the biggest contributors of NOx emissions at nearly a half million pounds per year (see chart).
The EPA proposed Oct. 10 that 22 states reduce nitrogen oxide (em a key element of smog (em citing electric utilities as the main source.
The California Public Utilities Commission has approved an agreement that will resolve a multifaceted case concerning pricing of services and operation of intrastate natural gas pipeline facilities by Pacific Gas and Electric Co.
The agreement, known as the "Gas Accord," also initiated significant changes in the way PG&E operates its business by increasing competition and customer choice. To mitigate the effects of market power held by the company, the commission imposed a series of discounting restrictions on PG&E.
A cogeneration project approved by the Virginia State Corporation Commission will allow Virginia Electric and Power Co., the utility sponsor, to lease equipment to Chesapeake Paper Products Co., the project host (which will operate the gas-fired plant), and yet retain contractual rights to control certain aspects of operations and maintenance.
At the same time, however, the commission has nixed VEPCO's idea of organizing an affiliate "as an electric utility" to own and operate a pipeline lateral to supply natural gas to the plant.
Seeking to wrest control of public relations for electric competition from private "stakeholders," the California Public Utilities Commission has authorized the state's three largest investor-owned electric utilities (em Pacific Gas and Electric Co., San Diego Gas and Electric Co. and Southern California Edison Co. (em to spend $89.3 million for consumer education on electric restructuring, through mass media, mail, local outreach and a toll-free call center.
In a separate order, the PUC authorized PacifiCorp and Sierra Pacific Power Co.
The California Public Utilities Commission, citing restrictions that force electric utilities to buy and sell power through the state's power exchange, has rejected a request by Pacific Gas and Electric Co., to use energy-related financial derivatives (em futures, swaps and options, etc. (em to manage risk associated with volatility in gas and electric commodity markets.
According to the commission, the proposal by PG&E for blanket authority to employ derivatives would violate several aspects of its electric restructuring policy.