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.
2 percent of California's gross state product. Competitively priced electricity is vital to California's $800-billion-a-year economy, one would think.
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.
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.
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.
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.
The New Jersey Board of Public Utilities (BPU) has approved a plan that will allow Public Service Electric and Gas Co. (PSE&G) to offer new transportation services to its commercial and industrial (C/I) natural gas customers. As a result of the BPU action, PSE&G will begin offering third-party gas transportation and other services to C/I customers regardless of size, amount of gas used, or alternate fuel capabilities. These customers may purchase gas directly from producers and marketers and arrange for PSE&G to transport and deliver the gas.
I am under siege. To be more precise, my company and American corporations in general are under siege. In popular media today, corporations are consistently treated as suspect at best (em and demonized at worst. If you switch off your critical faculties when you watch television or go to the movies, you're probably convinced that corporate America is out to destroy this country. In 1964, while campaigning for Barry Goldwater, Ronald Reagan framed the issue perfectly.
The Indiana Utility Regulatory Commission (URC) has authorized Northern Indiana Public Service Co. to recover its Federal Energy Regulatory Commission Order 636 pipeline transition charges under a rate design proposal that divides the charges between sales and transportation customers. Under the approved recovery plan, the gas local distribution company (LDC) will pass to all ratepayers on a volumetric basis those transition charges related to gas supply realignment and stranded investment.
stockholders $39 a share, or about $950 million in aggregate value. The agreement has been approved by both boards of directors. California Energy's tender offer included shares representing a majority of the voting power of Magma as well as funding of financing. The merger is also conditioned on the approval of California Energy's shareholders.