Sound bites from state and federal regulators.
Storm Damage Costs. Hawaii rejects proposal by electric utility for statewide surcharge to recover hurricane damage costs. Says that "regulatory compact" requires utility to quickly repair damage and restore service to consumers in return for recovery of all prudently incurred costs. Dkt. No. 94-0097, Aug. 7, 1996.
Gas-supply Incentives. Missouri increases LDC's rates by $9.5 million.
Utilities Shut Out of Third-quarter Stock Upswing
Utility stocks treaded water during the third quarter, while most stocks nationally took flight. This lackluster quarterly performance in the utilities sector proved most prevalent in the Public Utilities Stock Index. The box score: Our index fell 43.96 points, or 1.11 percent, to conclude the three-month period at 3908.43.
In stark contrast, the Dow Jones Industrial Average powered itself 227.54 points higher, or 4.02 percent, en route to a record high of 5882.17.
As directed by the state legislature, the New Hampshire Public Utilities Commission (PUC) has issued a preliminary plan to restructure the state's electric industry.
The West Virginia Public Service Commission (PSC) has criticized a request by Shenandoah Gas Co. to require its residential and commercial customers to pay the lion's share of a newly approved rate increase, citing the utility's cost studies as "flawed" and its cost allocations as having compounded the error.
The company had argued that its cost studies showed that interruptible customers were already generating a 45 percent rate of return, while rates for its firm customers produced a negative return on the investment necessary to serve them.
The Pennsylvania Commonwealth Court has upheld a ruling by the state Public Utility Commission (PUC) permitting Equitable Gas Co., a natural gas local distribution company (LDC), to recover costs associated with a switch from pay-as-you-go to accrual accounting for post-retirement benefits other than pensions (PBOPs) under Statement of Financial Accounting Standards 106.
The state's Office of Consumer Advocate had appealed the decision, claiming that in approving a nounanimous settlement the PUC had failed to determine whether the utility needed the cost recovery to achieve a fair ra
In two recent rulings, the New York Public Service Commission (PSC) has authorized electric utilities to call upon ratepayers to help cover losses from rate discounts and write off sunk investment in nuclear power plants. Ratepayer contributions in each case will come through incentive clauses by which revenues or losses are shared on an 80-20 basis between customers and company stockholders.
Rate Discounts. In one case, the PSC allowed Niagara Mohawk Power Corp.
Residential Pilot Programs:
Doing,
Dealing?
Customer choice and electric restructuring may appear synonymous to regulators, but for utilities "choice" means "market share."
THERE WERE 19 PILOT PROGRAMS
planned or underway in the United States by the end of November, involving some 500,000 customers in all classes. The goal? To test competition in retail electric markets.
In the residential class, pilots were operating in Illinois, New Hampshire, and New York. Massachusetts expected to roll out its pilot by January 1. Pennsylvania was planning an April startup.
Options, that is, as they pass the nationwide median in long-term pay incentives (em more than their counterparts at transportation or industrial firms (em but still less than execs at automotive and consumer companies.
Among CEOs (chief executive officers) at consumer products companies, industrial concerns, and transportation firms, top executives at energy companies can now boast of long-term pay incentives accounting for some 44 percent of their overall annual pay packages.
Load Aggregation:
The Wolf at the Door?
Of course, there's nothing to stop a utility from aggregating its own customers.
WHAT, EXACTLY, IS LOAD "AGGREGATION?" Is it a threat, an opportunity, or merely a sales tactic?
Actions taken in California, as well as in pilot programs across the country, place customer aggregation on the leading edge of efforts to pull native load from electric utilities.
Ironically, present-day utilities already "aggregate" their customers (em albeit into a single group.
Incumbent monopolists won't command high premiums
if newcomers can rebuild capacity from scratch at a cheaper price.
At first glance, many of the nation's regional markets for wholesale electric generation appear monopolistic. In some of the 18 regional power markets we have identified, the leading companies account for 75 to 90 percent of the area's generating assets. In other markets, where the concentration problem does not yet seem as pressing, mergers and acquisitions threaten to raise levels of concentration of ownership in generation.