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Why Applicants Should Use Computer Stimulation Models to Comply With the FERC's New Merger Policy

Models can overcome a key oversight (em

that both supply and demand affect competition.

This past December, the Federal Energy Regulatory Commission (FERC) issued a policy statement describing important changes in how it will evaluate proposed mergers under the Federal Power Act's public interest standard. These changes should lead to significant improvements (em not only in the evaluation of mergers, but also for other matters that affect market power, %n1%n including industry restructuring and market-based pricing.

Byline: 
Mark W. Frankena and John R. Morris
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State Take Lead in Telecom Reform

A federal court blocks FCC's "TELRIC" cost rule, but some states endorse it anyway.

With the Federal Communications Commission (FCC) having lost a major court battle last fall, the state public utility commission (PUCs) have taken the lead in the deregulation of local telephone service promised a year ago when President Bill Clinton signed the Telecommunications Act of 1996 (the "Act").

Some states have opened generic investigations; others have chosen to proceed case-by-case in individual arbitration proceedings.

Byline: 
Phillip S. Cross
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In Brief...

Sound bites from state and federal regulators.

Natural Gas Briefs

Gas Marketing Affiliates. Indiana finds no jurisdiction to regulate Proliance Energy, LLC, a brokering and energy services affiliate of Indiana Gas Co., Inc. and Citizens Gas and Coke Utility, but says it will regulate the utilities in their transactions with Proliance. Case No. 40437, Sept. 27, 1996 (Ind.U.R.C.).

Gas Regulatory Reform. Ohio proposes alternative regulatory procedures for natural gas local distribution companies. Case No. 96-700-GA-ORD, Sept. 26, 1996 (Ohio P.U.C.).

Employee Incentives.

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States Sue After DOE Says It Won't Act on Nuclear Waste

A group of 40 state agencies has joined with 33 utilities and the Nuclear Waste Strategy Coalition (NWSC) to file a lawsuit in federal district court after the Department of Energy (DOE) reported that it would not comply with a federal court mandate to accept high-level radioactive waste for permanent storage as of January 31, 1998, and begin removing such waste from temporary storage at some 73 power plants in 34 states.

The D.C. Circuit had ruled against the DOE last summer. (See, Indiana-Michigan Power Co. v.

Byline: 
Lori A. Burkhart
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WSCC Endorses Mandatory Protocols

The Board of Trustees of the Western Systems Coordinating Council (WSCC) has endorsed a new reliability compact that would require mandatory compliance and enforcement of established electric system reliability protocols in the Western U.S.

WSCC said it is taking a leadership role in overhauling the existing "voluntary" reliability management process and replacing it with a new framework to strengthen the roles, responsibilities, and authorities of WSCC and the North American Electric Reliability Council (NERC).

Byline: 
Lori A. Burkhart
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California Puc Sets PG&E Transition Charge

The California Public Utilities Commission has approved an interim competitive transition charge (CTC) for Pacific Gas & Electric Co. (PGE), effective until the PUC adopts a permanent, industry-wide CTC.

PG&E would collect the charge (39 percent of the current bundled rate) from any customer existing its system before January 1, 1998, the start of electric competition in California.

PG&E spokesman Tony Ledwell said less than a dozen customers had indicated they would attempt to leave the PG&E system early.

Byline: 
Lori A. Burkhart
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Consumer Group Asks SEC To Stop Southern Co.'s Asia Move

A Georgia-based consumer advocacy group, the Campaign for a Prosperous Georgia (CPG), has asked the Securities and Exchange Commission to halt a move by The Southern Company to use up to 100 percent of its retained earnings for a $2.75 billion acquisition of 80 percent of the Asian utility company, Consolidated Electric Power of Asia.

Among other claims, CPG wants the SEC to reconsider an April 1996 decision that granted an exemption to The Southern Company from the provisions of the Public Utility Holding Company Act (PUHCA).

Worries in Congress.

Byline: 
Lori A. Burkhart
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CILCO Introduces Competing Ideas For Illinois Choice

The Consumer Choice Partnership, backed by Central Illinois Light Co. (CILCO), has unveiled a set of "principles" to send to Illinois legislators in hopes of encouraging legislation to bring electric competition in Illinois as soon as possible, for all customer classes, with limited recovery of transition costs.

CILCO is the state's only major utility not to back a bill introduced last November (proposed by the Illinois Coalition for Responsible Electricity Choice) that would phase-in retail choice through 2005.

Byline: 
Lori A. Burkhart
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Backers of Transmission Line Would Win Capacity Rights

Massachusetts-based New England Electric System (NEES) plans to sidetrack possible opposition by offering first rights to firm service on a proposed 25-mile electric transmission line to any potential users who will support the line during its permitting phase.

The new line, a 600-megawatt, high-voltage, direct-current (HVDC) submarine transmission cable from Connecticut to Long Island, would begin and end on utility property, requiring no new land takings and presumably raising few environmental issues.

Byline: 
Lori A. Burkhart
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People

Jay P. Lukens, formerly a principal at Energy Market Economics, Inc., was hired by The Economic Resource Group, Inc., as managing director and principal of the company's new Houston office.

Edison Source tapped Aram G. Sogomonian, a former executive at Enron Capital and Trade Resources as its new corporate risk management v.p. Sogomonian was Enron's director of risk analytics and asset price, and also has worked at Unocal.

Larry Grossman, a senior v.p. at Cassidy & Associates, was retained by the Council on Superconductivity for American Competitiveness as executive director.

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