Law & Lawyers

Saving Gigabucks with Negawatts (1985)

In an age of costly electricity and cheap efficiency, smart utilities will sell less electricity and more efficiency.

Efficiency gains, if not properly managed, can quietly take away most of the present market for electricity. But they also offer alert utilities an unprecedented opportunity to control risk, improve cash flow, secure market share, save operating costs, and become once more a declining-cost industry.

California Rides the Tiger

Revolutions rarely succeed without a struggle. At the California Public Utilities Commission (CPUC), the move to restructure the state's electric utility industry is no exception. The stakes are enormous. For starters, annual revenues at the state's investor-owned electric utilities (IOUs) exceed $18 billion, making up

2 percent of California's gross state product. Competitively priced electricity is vital to California's $800-billion-a-year economy, one would think.

PoolCo vs. Bilateral Markets?

Vikram S. Budhraja

Vice President of Planning and Technology

Southern California Edison Co.

The transition to a competitive generation marketplace is underway. Customers want choices, flexibility, and competitive prices. Producers want open nondiscriminatory access to markets. Regulators want a smooth transition to the new system based on competitive efficiency, not cost-avoidance or cost-shifting among customer groups. And policymakers want a system that protects consumers without sacrificing environmental and energy policy objectives.

To Pool or Not to Pool: A Distracting Debate

The debate over the merits of pool-based markets as opposed to reliance on bilateral transactions and the invisible hand of competition began without much care taken to define the details of the bilateral alternative. On closer examination, however, we find the two approaches have much in common, being more like different pews than different churches. A further debate that emphasizes only the few differences would not inform so much as distract from solving the common problems.

Financial News

Retail wheeling has been repeatedly condemned by opponents who claim that it would cause rate discrimination between customer classes. They allege that it would unfairly reduce rates for large customers, while raising them for small ones. But discriminatory rate structures already result from the selective discounts that utilities grant their large customers.

1994--The Year in Review

We begin the new year with a recap of the major rulings issued last year by state public utility commissions (PUCs).

Electricity took center stage as state commissioners began in earnest to examine rising competition in the power generation market. The seemingly endless number of privately sponsored seminars, conferences, and reports on the issue might suggest that regulators are following rather than leading on policy.

People

H.J. "Jim" Mellen, Jr. was named CEO of MDU Resources Group Inc. He will retain his current position as president. Mellen replaced John A. Schuchart, who will continue as chairman of the board.

Robert Anderson, Montana Public Service Commission member, was elected 104th president of the National Association of Regulatory Utility Commissioners. Edward H. Salmon, member of the New Jersey Board of Public Utilities, was elected first v.p.

APPA Asks NARUC to End Rate Secrecy

In a letter to Ronald Russell, chair of the Electricity Committee of the National Association of Regulatory Utility Commissioners, Larry Hobart, executive director of the American Public Power Association, argues that investor-owned utilities should not be allowed to keep rates confidential. Hobart says that rate secrecy destroys electric industry competition and that secret sales are a form of predatory pricing barred by antitrust law. He also claims that secrecy violates consumers' right to know if they are paying their fair share of utility costs.

Rhode Island Reviews Adjustment Clause Plan Incentives

The Rhode Island Public Utilities Commission (PUC) intends to open a proceeding to consider the effect of fuel-adjustment clauses on utility incentives to reduce customer costs, finding that the passing through to customers of generating fuel costs may create a disincentive to supply-side efficiency.

The Energy Policy Act of 1992, amending section 111(d) of the Public Utility Regulatory Policies Act, requires states to consider electric utility investment in efficiency improvements at generation, transmission, and distribution facilities by October 24, 1995.

Mailbag

Privatization Knocks

The timely article on Central America and the Caribbean by Lee M. Goodwin (Nov. 15, 1994) omitted to mention the privatization potential of the region's utility systems. For example, Grenada recently privatized 50 percent of its utility, GRENLEC, and Trinidad and Tobago has privatized electric generation. These alternatives to "greenfields" project development deserve attention from U.S. developers as well. In any case, based on my experience, I would certainly echo Mr.